How a Mother Should Talk About Money with Her Daughter by Aja McClanahan

Author:Aja McClanahan
Language: eng
Format: epub
ISBN: 9781621537434
Publisher: Allworth
Published: 2020-01-21T16:00:00+00:00

How to Get Started as a Newbie Investor

Before we dive into how to get started, I should clarify that if you invest in your 401(k), or if you have real estate, a small business, or you just have a few dollars in a few simple stocks, you should consider yourself an investor. That’s all it takes.

Let’s say you have done none of these things. You haven’t put money away in a 401(k) or any other type of retirement account. You don’t own any real estate and you’ve never purchased any stocks. Unfortunately, you haven’t yet started your small business. Despite this, you can still become an investor relatively easily.

As mentioned in the savings section, the lowest hanging fruit to start with would be investing in your employer’s retirement plan. That could be a 401(k) or 403(b) or even some flavor of an IRA.

According to the U.S. Census and the National Institute on Retirement Security, 57 percent of US workers have $0 in employer sponsored retirement plans.2 This means there are millions of people who have the option to become investors, usually in a tax-deferred manner, that simply don’t.

As we saw in a previous chapter, even when people do invest or amass assets, women end up having less money and assets than their male counterparts. The great news is that we can teach our daughters and other young women in our lives to become investors through employer-sponsored retirement savings plans.

Because you contribute from your paycheck, oftentimes with pre-tax money, it’s probably one of the best things you can do to become an investor. It’s not an investing option any of us should ignore!

Once you cover that base, you also have additional investing options. You can open a brokerage account with a discount broker like TD Ameritrade, E-Trade, or Vanguard. These accounts are free to open and simply charge a fee for every trade you execute (that is, buying and selling).

Once you open your account, you can simply transfer money from your bank account to your brokerage account so that it is funded and ready to purchase investments like stocks, bonds, mutual funds, or ETFs (exchange traded funds).

Now because this is not a book that is solely about investing, I’m just going to drop some terms here and you’ll have to do the work to find out what some of these things mean and get knowledgeable on your own. If there’s something you don’t understand or are not familiar with, take notes to look them up later and understand them as investing concepts.

I think this is a great activity that you can do with your daughter. If you don’t know what an exchange-traded fund is and why it might be a better alternative to mutual funds, both mom and daughter can learn together.

After all, there’s nothing more powerful than showing her, firsthand, that it’s okay to pursue something that you don’t fully understand, sometimes with fear in your heart and doubt in your mind.

Lastly, one of the most wonderful developments of the

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.