Life-Changing Skill #2: Investing in the Stock Market
Many women (and men) aren't taught much about money growing up, so they naturally think that investing is complicated and way too risky. However, that's absolutely not the case. Investing is essential to your future and it's also a core aspect of self-sufficiency and self-confidence. Trust us, if you can feel like you've mastered the market, you'll feel like you can accomplish anything.
Many Ways for Women to Invest in the Market
There are multiple ways to invest in the stock market. You can do the research yourself, you can pay someone to do it for you, or you can practice a combination of the two. There are positive things to be said for both. Still, the Utterly Fabulous Network team is an advocate of the do-it-yourself-with-expert-advice method. After all, financial professionals aren't any kind of guarantee of success and no matter how well your stocks perform, they get a cut. Yuck.
Perhaps the easiest way to take this approach is to invest in mutual funds and index funds. Mutual funds are made up lots of different stocks, usually that are tied together by a common theme (tech stocks, blue chip stocks, Pan-Asian stocks, small business stocks, etc.). When you buy a share of a mutual fund, you're buying a tiny share of each of the companies this mutual fund has bought into. You're automatically diversified. Even if one stock in the mutual fund tanks completely, you won't feel the full brunt of this. Index funds, on the other hand, mirror the market. If you're not interested in beating the market--it historically earns a 10 percent return annually, anyway--then index funds are the easiest and most goof-proof way of making your money work for you without a ton of effort or market-watching.Starting Your 401k
The easiest way to get started may be to open a 401k through your workplace. 401ks are typically opened and managed through an investment brokerage like Fidelity. You'll probably have a wide range of mutual funds to choose from, but you may also have some basic lifestyle options to choose from. For example, you can choose "high growth, medium risk" as your target and the company will pick the mutual funds that match your needs. It's that easy--there's no reason not to start investing. If you don't have a 401k, it's not a problem. Go to an online brokerage company like eTrade or AmeriTrade and open a Roth IRA. You can often start with as little as $100 or so.You'll be able to invest in mutual funds, index funds, and regular stocks through this account. This mix is totally up to you. Again, if you want to get started but don't want to get in over your head with research, stick with index funds.
Once you've mastered these investing basics, you can start to take more control of your money. If you find a company that you think is destined for big growth, research their past performance, their management team, their earnings, their debts, and consider investing in them. You'll be amazed at how easy it is for regular people to invest, especially with free advice from companies and groups like The Motley Fool. The market isn't as mystifying or complex as you have assumed--regular people can manage their own portfolios without devoting their lives to the process.
Your Bottom Line Is the Bottom Line
We can't emphasize enough how important it is to become comfortable with investing. Even if you feel that money isn't that important in your life, you're not in control until you control your money. For better or worse, the money you invest today (or don't invest) translates into future security and financial freedom. When you know where your money is going, how much it's earning, and how much you'll have in 50 years, you've taken positive, concrete steps to ensure your future happiness. The giant confidence boost you'll get in return is just one more bonus of becoming a capable investor, so get cracking today.
Discover the Seven Fab Skills:
Seven Life-Changing Skills to Learn: Introduction
Life-Changing Skill #1: Sewing on a Button
Life-Changing Skill #2: Investing in the Stock Market
Life-Changing Skill #3: Tellling a Great Joke
Life-Changing Skill #4: Creating a Signature Dish
Life-Changing Skill #5: Getting to the Point
Lifestyle Fashion and Beauty Relationships Fitness and Health Money and Finance
Travel Food and Entertaining Site Map
İUtterly Fabulous Network 2006-2007. All Rights Reserved. Email webmaster@utterlyfabulousnetwork.com.