There are 5 single steps to follow if you want to get a clear picture on how to invest your money in a better way.
These 5 steps were mentioned in the previous post which you CAN FIND HERE. So if you want to see that post before this one then feel free to do so.
1) Give your money a clear goal
Figuring out how you want to invest your money starts with determining your investing goals both for now and later.
Try to find out if your goal is a long term goal or a short term goal. And if you have found out the answer to that then move to step 2.
2) Decide how much help you want
In this step you start learning about how to invest and whats the best strategy for you.
In this one you should also figure out if you want to hire professional help you with your investments or if you want to do your investments alone.
3) Pick an investment account
Here you need to find out what kind of investments you want to do. Are you interested in retirement accounts ? normal investing accounts? Bonds ? Funds?
But know that some accounts offer tax advantages just like retirement accounts.
4) Open your account
After you have chose what kind of account you want to have, the next step in this one is to choose an account provider. The two biggest options are 1) An online broker and 2) A robo-advisor.
An online broker will allow you to self-manage your account. And it will be a good choice for you if you want a large selection of investment options or who prefer to be hands-on with account management.
A robo-advisor in a portfolio management company uses computers to do much of the work for you. Together with managing and building
a portfolio based on your risk tolerance and goal. This one however have annual management fees for the service. These fees are between 0.25% and 0.50%.
But you have also other options to choose from, these two I’ve mentioned are only the two most popular once in the investing world.
5) Choose investments that match your tolerance for risk
This one is all about figuring out how to invest your money. This whole step is about your goals in investing and the willingness to take on more risk in exchange for higher potential investment rewards.
If you can tolerate a lots of risk then you should probably go with Stocks and Real Estate.
But if your risk tolerance is low then you should probably go with mutual funds and bonds.