How To Get Started Investing

You know you’ve been putting it off for too long and now you’re ready —you’ve decided to start investing. There’s just one small dilemma, you’re already sleeping under your desk, you eat most of your meals out of cartons and you don’t have a clue where to squeeze a few minutes out of your jam-packed schedule to do the research you know is necessary to make sound investments.

And the proliferation of advertisements that bombard you —hawking this mutual fund or that stock-trading website don’t help either. They can make you feel overwhelmed and unable to make an educated decision about where to invest your money. Stashing cash under your mattress is starting to look pretty good.

If you’ve heard it said that you have to spend money to make money, well the same rule applies to time. You’ve got to spend time to make money. Your first step should be to take a deep breath and acknowledge the fact that even the experts don’t have enough hours in each day to keep tabs on all the financial news and options out there. Make a commitment to start off simply. Here are some suggestions to help you get started on the right foot and some to help you keep track of your investments once you get going.

Here’s the “spend time” part. Before you dive in, spend at least a half-hour, at some point each day, to educate yourself about investing basics and vocabulary. And don’t be afraid to ask questions, even many veteran investors don’t know the difference between an index fund and a growth fund. Good books for beginners are The Complete Idiot’s Guide to Investing Like a Pro by Edward T. Koch and Debra Ellen DeSalvo (Macmillan) and The Millionairess Across the Street by Bettina Flores and Jennifer Basye Sander (Dearborn Financial Publishing). Rest assured that this preliminary research will pay off handsomely once you begin to invest.

In the spend money to make money category, it’s a good idea to talk with a certified financial planner who can help you focus on your long and short term investment and lifestyle goals. A professional advisor can help point you towards the best investments to meet your goals and save you the time of having to figure it all out for yourself. For instance, if you plan to buy a house in the next three years, your planner can help you decide whether the best road to that goal is to invest in safe stocks and funds like blue chips and index funds, to take the risk that might lead to significant gains from the more volatile technology stocks, or to get the best of both worlds with a mutual fund that contains a mixture from each category.

If you’re seriously short on time you may want to consolidate your investments under one roof with a central asset account, which incorporates stocks, mutual funds, CDs, bonds, checking and savings accounts, credit cards, and mortgages under the roof of one financial institution. With a central asset account, you can keep track of all of your investments and financial accounts in one easy-to-follow monthly statement, and the financial institution does all the paperwork for you. Plus, you receive just one 1099 each year detailing all of your investment income and interest. And that makes it easier for you at tax time.

You can save time and follow through on your commitment to investing by taking advantage of automatic deposits and withdrawals. Sign up to have the amount of your choice automatically deducted from either your paycheck, checking or savings accounts and have the money electronically deposited into a mutual fund or another investment vehicle. Speak to your bank or payroll supervisor once and you won’t have to think about it again.

Join an investment club where you and other investment-minded people can learn about a variety of stocks and bonds together. Sharing the research workload with club members saves you time. And the discipline involved in the ongoing research, regular investments, and frequent meetings can help you compartmentalize the investing part of your life so that it doesn’t take over the rest of your life.

Learn an accounting software program like Quicken and use it to keep track of all of your investments, automatic deposits and withdrawals. You can even download your monthly central asset account statements directly into the program. You’ll be able to access the information quickly and you’ll always know where to find it.

Once you settle on an investment strategy, forget about it. Of course, you should carefully review your monthly statements, but try to resist the constantly tinker with the contents of your portfolio. Not only will you be spending more time than you want to, but you’ll also be forking over more money on brokerage commissions and other fees than you might realize. Instead, consider picking one new investment a week—or month—to research and buy.

Keep in mind that investing is only one aspect of your financial life, and an even smaller part of your overall life. If you can hold onto this perspective—while you continue to learn and maintain your investment strategy— you’ll be able to keep tabs on your growing portfolio and still have a life as well.