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On The Money –
A Financial Wellness Series
On The Money –
A Financial Wellness Series
Getting Started
Types of Investments
Investing on Your Own vs. With a Professional
A Word on Micro-Investing
The good news is that you don't need much money to begin investing. But before you get started, make sure to consider:
1. What’s your goal?
Are you saving for retirement, a down payment on a house, your kid’s college, or something else?
2. What’s your time frame?
How long will it be before you need the money? This will influence your investment choices.
3. How much risk will you take?
Some investments are riskier than others, but they also have the potential for higher returns.
Some investments are low-risk and allow you to quickly access your money if emergencies come up. But it’s important to remember that low risk doesn’t mean no risk. On the other hand, some investment types can offer a bigger return but carry more risk, may need more guidance, and should be considered part of a long-term plan.
These kinds of investments will usually hold your money for shorter periods of time but will also typically offer lower returns. They’re generally easy and safe but earnings could be outpaced by inflation.
Learn more about Redstone’s high-yield savings and certificates; we talk about micro-investing below.
These investment types offer a balance between growth and stability. Investments are typically made in businesses that are established with a history of consistent earnings. They’re good for people who will accept some risk for potential growth.
Not sure what the difference is between these types of investments? They’re explained here.
A high-risk investment offers the potential for high returns but can also carry a significant risk of loss.
They are typically highly volatile and are better suited for people with a long-time commitment and wanting high growth potential.
The decision of whether to manage your own investments or work with a professional depends on your individual circumstances, goals, and preferences. If you have the time, interest, and discipline to learn, going solo can be rewarding and cheaper. But if you’re busy, uncertain, or just want peace of mind, a professional might be worth the cost.
You don’t have to be a professional to be successful. However, managing your own investments requires time and effort to research and monitor your portfolio. Plus, you’ll need to do your homework to understand some fundamental principles and guidelines.
Savings: low to no fees with many self-service platforms
Control: you make the decisions when you want
Ease: online platforms and apps make investing accessible to anyone
Mistakes: without proper knowledge you may make errors or decisions based on emotion
Limited Resources: certain tools and platforms are reserved only for professionals
Time Commitment: research and education can take more time than you have
Working with a professional can be a game-changer, especially if your financial situation is complex or you want to grow and protect bigger amounts of money. And it may be worth partnering with one to give you peace of mind that your money is handled by someone who fully understands investments. Learn more about the different types of professional advisors here.
Expertise: they know the ins and outs and can spot opportunities or pitfalls easily
Time Savings: they do all the work, so you don’t have to
Strategy: plans are tailored to you, and they’ll be level-headed in times of volatility
Fees: between paid percentages or commissions, that’s less money in your pocket
Less Control: you may feel out of the loop if you like to be hands on
Quality: not all pros are equal – consider their experience and track record
Micro-investing is a way to get started with investments through online platforms or apps without needing a lot of money. It’s low risk, builds discipline, and allows you to start without overcommitting. You can put small amounts of money into investments and over time that adds up.
Automatically rounds up purchases to the nearest dollar and invests the difference.
Allows you to buy a piece of a share of stock – great for investing in expensive stocks.
Set up recurring investments and have your portfolio managed according to your risk tolerance.
Do your research first to find an app or online platform that you feel comfortable with. A simple internet search for “micro-investing apps” or “fractional share investing” will give you many results to choose from. Helpful hints: Pay attention to user reviews and ratings to get a sense of the app's reliability and user-friendliness. Also, remember to look for any fees associated with using it.
Investing may seem complex but it’s simply about your risk tolerance, timing, and commitment to a strategy. It’s not about getting rich quickly but consistently growing your wealth over time. Starting with the basics, staying informed, and remaining patient is key to successful investing.
These products are not Insured by NCUA or any other Government Agency, are not guaranteed or obligations of Redstone Federal Credit Union, are not deposit products and may involve risk, and may lose value.
Next month in our Financial Wellness Series: Saving for Big Life Events
Return to our Financial Wellness webpage to learn and discover more on your own through our partnerships with Zogo and BALANCE.
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