If I Were to Start Investing Today, I'd do THIS

As we start a new year, you may be over the New Year resolutions, but eager to make good choices that your future self will thank you for.  As a new investor, there’s so much information out there, it can be overwhelming to know where to start.  With the benefits of hindsight, if I were to start my investing journey today, I’d do these things to get off on a good footing 

Get Organized

First things first, I'd get organized. I'd set up different accounts for my financial needs. One for my salary and paying bills, one for my emergency fund, one for discretionary spending and a brokerage account for my investments. Keeping things separate to help me stay on top of my finances.

Automate, Automate, Automate

Next, I'd automate EVERYTHING. I'd set up automatic transfers to my high yield emergency fund savings account, my investment account, and to automatically pay off my bills. This takes the stress out of remembering to move money around and ensures that I'm consistently saving and investing.

Tackle Debt

I'd also take a close look at my high interest debt. If the interest on my debt is higher than what I can expect to earn from the stock market (average return is 7% annually), I'd prioritize paying off that debt first. It's a smart move to get rid of expensive debt before diving into investments.

Maximize Benefits

To make the most of my financial benefits, I'd chat with my HR officer at work. They can help me maximize my savings by taking advantage of tax-advantaged retirement accounts and ensure I’m taking advantage of any company match. Plus, I could explore pre-tax deductions for things like travel, childcare, and even gym memberships. And don't forget about employee share plans - who doesn't love getting company shares at a discount?

ETFs

When it comes to investing, I'd focus on index ETFs (Exchange-Traded Funds). These funds allow me to own a piece of the market without having to pick individual stocks. I'd diversify my investments with a broad market index ETF, an international index ETF, and an emerging markets index ETF. And for some extra income, I'd target dividend-paying index ETFs and reinvest those dividends over time.

Crypto & Blockchain

I’d allocate a proportion of my investments to blockchain and crypto assets.  I’d put time into learning about this new eco system and understanding the overall value proposition, so I could get my feet wet as the value of digital assets continues to grow.

Protect what I’m building

Lastly, I’d consider appointing a financial Power of Attorney, someone who could step in and manage my finances if I were hospitalized, or unable to make financial decisions myself.  This would ensure that someone I trust could make the right decisions if I were unable to. 

Today’s Takeaway:

So, there you have it, my investment game plan! By following these steps, I‘d be on my way to starting my financial journey on the right foot. Of course, you'd create a plan that fits your needs and with these ideas, you have a starting point to work from. Happy planning - your future self will thank you for it!

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The content of this newsletter is strictly for educational purposes and does not amount to professional advice. It's not a substitute for independent financial advice from a professional who can advise on your circumstances and individual situation.