Answers to all of your questions about starting to invest in the stock market.
Don’t know anything about investing? This blog is for you.
The stock market is one of the best paths to building wealth. If you know the basics, investing early can be one of the most profitable decisions of your life.
But we know it can seem confusing…
Insights from the pros.
Grain is teaming up with wealth advisors and financial pros across the country to answer the questions we’ve all had about starting to invest in the stock market.
To answer the next question in our series, we asked RCM Wealth Advisors, a full-service wealth and asset management firm based in Chicago (SEC Registered Investment Advisor. Legal disclosure at bottom).
How much money do I need to start investing?
Mike Cavanaugh — Founding Partner & Principal
Start with what you’re comfortable with.
Unless you are the benefactor of a trust or independently wealthy, the answer is you need to start somewhere and you should start with what you are comfortable with.
There are other considerations (commissions, fees, etc.), but think of it this way, the money you invest will start working for you once you invest. Then the old adage about compounding interest kicks in. Don’t dig a hole for yourself by not starting now.
George Tkaczuk — Portfolio Manager
Start with whatever you can afford.
You should start investing with whatever you can afford and with money that you do not need tomorrow, next week, or next month. If you need the money next month, then you are better off putting it in the bank.
This is not a get rich quick scheme. There will be times when your investment may head south. It is a fact that markets are volatile. But over the long-term, the US stock market provides handsome returns as long as you do not need the money tomorrow.
Mike Tosaw — Investment Advisor
Invest as much as you can while still being able to pay your bills and have a reasonable lifestyle.
I’ve been around for many years, and I’ve yet to meet any older person who says that they wished they would have blown more money.
However, you only live once. And if you obsess about saving every penny, you’ll miss out on a fulfilling life. I suggest finding the right balance that works for you.
Brendan Walsh — Investment Advisor
The two biggest factors are someone’s emergency savings and budget.
First, everyone should have a rainy day fund for situations that hit your stress levels and your wallet — a car repair, losing your job, having a new child, or replacing your daughter’s broken Frozen Blu-ray.
The rainy day fund may vary from 3-6 months of runway, but the key is that you feel comfortable, keep the level steady, and don’t have to constantly wipe out the entire fund and start from scratch.
When you ask for a specific dollar amount, I’m going to throw the question back to you — “How much are you saving each month?” Use Mint or a family Excel sheet to figure out a solid monthly dollar amount without affecting your lifestyle. No first step is too small.