Grow your money faster by investing in mutual funds. Credit: Colourbox
Entering the stock market can seem overwhelming, but if you're looking for a way to grow your money, it's a better option than sticking it all in a bank account. Saving is still an important long- and short-term strategy, but investing is a great way to supplement your financial future.
"If you put all your money into a savings account, you're going to earn very low interest. Whereas if you take that money and put it in a stock mutual fund instead, you're going to see a return that's much higher and faster," says Debra Borchardt, a market analyst at TheStreet.com.
And the good news is you don't need to have a lot of money saved to start. "There's no magic number to start with, but you can do it for as little as $50," says Borchardt. "People think you have to have thousands of dollars saved up to invest, but you really don't. The way you do it is you start small and build it up."
As with anything that involves the stock market, there is always a risk, but Borchardt says the key is not to make emotional decisions and riding it out for the long haul. "In the long run, most people do well in the market. It's when you jump in and out when you hurt yourself," she says.
When you're ready to start investing, the first step is to educate yourself. Sites like Investopedia.com break it down and put everything into layman's terms. It isn't even necessary to meet with a financial adviser. "I think sometimes that intimidates people," Borchardt says. Her advice is to use an investing app instead, like Motif Investing or SigFig, which are preferred by the editors at Money magazine.
Once you have taken these initial steps to invest, check up on your stocks about every six months. Then, you can see how they're doing and if you are able and want to invest more money, you can. The most important thing when you're considering investing is not to be intimidated. Even if you know very little about the stock market, you can still make a profit.