How College Grads Start Investing (Part 1)

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How college graduates can get started investing, part one.

If you just graduated college, first off, congratulations and as you’re creating a massive “next steps” to-do list, that might include landing your first grown-up job, moving to a new stomping ground or creating a budget, you’ll want to add one thing: investing! Start small and start now! Get a jump on investing you’re young and this benefits you in several ways.

First, time is on your side and through compound interest your money will grow quicker over time. Let’s say you invest the max you can into a Roth IRA, which is $5,500, each year for 10 years. So, from when you’re 21 to 31 years old, you invest $5,500 a year. If you earn an 8% return on your money, by the time you’re 65 you will have earned $1.2 million.

Start small! You don’t even need a lot to get started. Here are a few simple ways: Micro Investing. These days you can invest via micro investing apps such as Stash or Acorns. All you need is $5 to open an account. Note this Stach charges $1 for accounts with balances up to $5,000. If you’re opening an IRA is $2 for account balances up to $5,000.

Another option to invest in ETFs or exchange-traded funds. ETFs are a type of security that tracks a basket of assets, index, commodities or bonds. Because you’re investing in a bunch of stocks versus a single one, you’ll enjoy the benefits of diversification.

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