Taking the first step in investing can be an exciting journey. However, what many fail to realize is that there are certain prerequisites that must be met before you begin learning more about how to grow your money. When your finances aren’t in order, it can be difficult to grow your wealth in an efficient way. If you’re looking to invest but have not yet delved deep into your money and financial education as a whole, here are some tips on how to clean up your finances and prepare for investing in the future.
1. Get a better overview of your finances.
Long before you begin considering investing your money, it’s important that you know where you stand financially. After all, there’s no point in investing if your spending habits exceed your ability to save or if you have lingering debt that still needs to be paid off. But where are you supposed to begin? Here are a few tips that’ll help you get a better overview of your finances.
- Develop a new and improved budget: Living without a budget or using an old budget can be a great way to get off-track financially. Set aside time now to come up with a new budget that reflects your income, your vital expenses, and what you may wish to spend money on monthly. A budget will help you determine how much you have in your bank account to invest after everything is paid off.
- Figure out what debts you have, if any: When it comes to investing, paying off debt is the most urgent task to take care of. Do your due diligence, assess your current debts, if any, and come up with a realistic payment plan to help you clear these as soon as possible. If you’re behind on payments, reach out to an agent that can help you figure what options you have at your disposal.
- Look for any expenses you may have overlooked: Some expenses come into our life without warning. For example, if a loved one recently passed away, you may end up handling some of their debts like their reverse mortgage loans. Fortunately, as it is with most debts, there are ways to ease the financial burden of these types of expenses. For example, if you’re dealing with the above, you could reach out to a company that’ll provide you with the loan necessary to deal with the reverse mortgage loan that your loved one took out from reverse mortgage companies. Remember, if there’s a debt you need to pay, there’s almost always a solution to help you get through your debt.
With a summary of your finances, you’ll be better equipped to begin investing when the time’s right. If you’re having difficulty getting a handle on your finances, don’t hesitate to speak to a financial counselor who can help you project your expenses and figure out how much debt you owe.
2. Figure out which types of investments are safest for you.
Perhaps you’re someone who has no outstanding debt. If this is the case, you may be asking yourself which investments are the most appropriate for you. Some types of investments that are perfect for those just dipping their toes into the water include:
- Opening up an interest-bearing savings account or a retirement account like a 401(k) (to help you prepare for the future and grow your wealth slowly)
- Investing slowly over time through an application that does the work for you
- Exchange-traded funds
- Mutual funds (especially exempt-interest dividends that help you save more of the money you make from your investments)
- Investing in a savings bank account that gains mild interest over time, although these may have monthly payments of management fees
Put simply, if you’re interested in investing but want to play it safe and focus on growing your wealth over time, the suggestions listed above will help you get started without exposing you to risky investment vehicles.
3. Look into alternative investment opportunities.
Beyond the traditional investment opportunities above, you may also wish to consider investing in alternative investments. Alternative investments are investments like real estate that fall outside traditional asset classes like stocks, bonds, and cash. Although alternative investments do come with their fair share of risk, they’re vital to helping you diversify your portfolio and boosting your potential of making more money over the short-term (rather than just investing to earn interest over time).
But where do you begin investing in such assets? One excellent platform to turn to is Yieldstreet. Yieldstreet is an alternative investment platform that offers you help in growing your wealth by providing you with access to short-term, passive-income yielding investment opportunities that are best suited for you. With a focus on lower premiums, risk mitigation, and ease-of-use, Yieldstreet is a platform that’s perfect for investors of any experience level. If you’re interested in learning more about this platform before joining, simply look at Yieldstreet reviews to get a better idea of what their investment managers have to offer new investors. If you’re looking for financial services that are clearly explained and investment platforms that even a new investor can easily take part in, Yieldstreet can offer you all the best of an experienced investment company alongside a personalized investment experience.
Investing is an important part of your financial journey. However, investing without being properly prepared can be detrimental to your financial health. To ensure that you’re ready to invest, use the guide above to prepare your finances, learn more about what opportunities may be best for you, and how you can get started when you are in the right position to.