Investing is a great way to make your money work for you. Here's a few things to consider doing before you make the jump into the sharemarket.
It’s fair to say that interest rates are lower than Novak Djokovic’s reputation right now, so it’s not surprising that more than 1 in 5 Aussies want to invest more in 2022.
And while investing is a great way to make your money work for you, there are a few things you may want to consider doing before you make the jump into the sharemarket.
Before you invest in the sharemarket, you should have a hefty safety net of cash to help you in the case of an emergency, like a busted car or an unexpected medical bill.
While you can take your money out of most investments, it can often take a few days, and you’ll generally pay a fee to do so. But, having an emergency fund means you have access to cash immediately to pay for an unforeseen expense.
Generally, it’s a good idea to have three month’s worth of pay in your emergency fund before you invest. However, there’s no hard and fast rule.
If you have high-interest debts like a pay-day loan, a personal loan or a credit card bill, you may want to pay these down first before you start investing.
Think about it…it doesn’t make sense to earn a smaller interest on your investments than you’re paying on your debts, right? So, it’s a good idea to have minimal debts before you start your investing journey.
It can be hard to choose an investment strategy if you don’t have investing goals. So, you may want to ask yourself some basic questions before investing, like:
These can help guide your investment decisions.
What the hell is an ETF? Or an NFT? Shares? Dividends?
These are all investing basics that you should understand prior to actually investing. You don’t need to have a full finance degree to get in the share market, but you should know enough about investing to make informed decisions.
So, do your research. Read the financial news, listen to podcasts, follow Instagram accounts. And, if you think you need to, engage a financial planner to help you make the right investment decisions for your financial situation.
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