Investing Basics for Beginners

Thinking about investing but feeling a bit lost? Don't worry! This guide is here to break it down for you in a simple way. Whether you're working full-time and don’t have much free time or you're just curious about growing your money, you'll find the basics you need to get started.

Why Invest?

Investing helps your money grow over time. While keeping money in a savings account is safe, it doesn't earn much interest. Investing can give you higher returns and help you build wealth for the future. Starting young is especially beneficial because it gives you more time to benefit from compound growth and ride out the market's ups and downs.

Employer-Sponsored Investment Plans

Employee Stock Purchase Plans (ESPPs)

Some companies let employees buy company stock at a discount through ESPPs. This can be a great way to invest in your company and benefit from its growth. Just remember to diversify and not put all your money into one stock.

401(k) Plans

If you have a full-time job, your employer might offer a 401(k) plan. This is a retirement savings plan where you can invest a portion of your paycheck and have your taxes deferred. Many employers also match your contributions, which is like getting free money!  And on top of that your contributions can be deducted on your tax return!

Life Insurance

Many employers offer life insurance as part of their benefits. While life insurance isn't typically an investment, some types, like whole life or universal life insurance, have an investment component. They build cash value over time, which you can borrow against or withdraw.

Health Savings Accounts (HSAs)

If you have a high-deductible health plan, you can save money in an HSA for medical expenses. The money you put in is tax-deductible, and you don’t pay taxes on it when you use it for qualified medical expenses. Some HSAs also let you invest your funds, helping your balance grow over time.

Recap

Investing might seem a bit scary, but it doesn't have to be! You're already making a smart move by learning about it. By using options like ESPPs, 401(k)s, and HSAs, you can start growing your money over time. Whether you're saving for the future or just trying to build some wealth, starting now will set you up for success. So go ahead, take that first step, stay curious, and watch your money grow!