How to Decide if Your Finances Are Ready for Investment

Most of us know we need to invest our money. Inflation is a sneaky little monster that threatens to shrink our savings as time goes on, and investing is the only way to beat it. The problem is, how can we tell if we’re ready to invest?

The answer that is you’re ready to invest as soon as you’re motivated to invest.

There are so many misconceptions on investing that I’d have to write an encyclopedia to list them all. But one of the most damaging misconceptions is the idea that you need a lot of money to invest for it to be even remotely worth it.

I’m here to tell you, it’s not true.

Any money you invest is money that can potentially grow. And $50 here or there put into an investment is a lot better than $50 spent on dinner and drinks out because you felt like it wasn’t enough to do much else with.

So, on the question of when you should invest, the short and simple answer is always right now.

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The Beginner’s Guide to Investing

It’s so simple. Investing, I mean.

Don’t believe me? I don’t blame you.

I’ve been a financial writer for years and have tackled important topics like debt payoff, budgeting, and handling the emotional side of finances. But even with all that, there was one topic I would always avoid: investing. As far as I was concerned, investing was far above my proverbial paygrade.

You see, as a personal banker and someone with debt, I learned a lot about budgeting and saving and paying off debt. But I never got to investing. It seemed too complex, too intimidating. I knew I needed to do it, but figured I’d just be in the Roth IRA only game until or if I could ever learn how to handle the stock market.

I also wanted to make sure I only wrote about topics I confidently could help people with. And since there are people who work for years to get investing right, how could I ever know it well enough to help others? Unfortunately, in my efforts not to steer anyone wrong, I effectively made sure that I never learned a thing about this very important topic.

Until now.

There’s no sense in talking about budgeting and paying off debt if you don’t also talk about how you can then grow your money. There’s no sense in stuffing your mattress with cash to protect it from stock market fluctuations. And there’s no sense in avoiding a topic because it seems scary. So, I did what I should have done a long time ago: I talked to a professional.

The best thing I learned? Investing is simple. I took pages of notes on how simple it was – because I had so many questions to prove that it wasn’t simple. But when I returned to my notes, guess what? They pointed to how simple investing really is.

It’s all about beating inflation. And anyone can do it.

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Do You Know What NOT to Focus On?

When seeking out financial advice, we seem to be bombarded by experts and people who call themselves experts saying they know exactly what we should do.

As they dole out their platitudes that pay little consideration to our specific circumstances, we can get overwhelmed with a feeling of there being so much (too much) to focus on…

I guess I must pay off all my debt using the xyz method while also saving _% of my income while also cutting all my expenses while also contributing to my retirement while also…

The thing is, it’s a lot harder to reach our goals when we have too many to strive for at one time. Focus is the real game changer when it comes to achievement – but it’s not easy to decide what to focus on when everyone’s telling you they know best, but they all have different answers.

That’s why it’s sometimes easier and more productive to think of what not to focus on. Cut the wheat from the chaff and forget about the rest. Here’s how you can determine which financial advice you’re getting is the wheat – and which is the chaff.

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Understanding the Cause and Effect Behind Your Financial Actions (and Inactions)

Do you ever feel like your financial circumstances are out of your control? Like they’re just happening to you?

Do you always feel like your financial circumstances are happening to you?

Whenever we’re knee deep in circumstances we’re not sure how to resolve, it’s easy to feel like our lives our careening out of our control. Every additional bump in the road makes the situation feel that much more impossible and we’re left nearly paralyzed with fear. It’s in these scenarios that we forget the most important thing:

Even in the most difficult of circumstances, we have control. We have the ability to decide how to move forward – in fact, we have the ability to move forward. But not until we recognize the very important fact that we always have a choice.

Even if the path is hard, even if the path is slow, you can decide what direction to go in. That’s why it’s so important to understand the active role you have in your finances – and the cause and effect of your actions and inactions.

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Financial Planning is All About Balance

There are a lot of absolutes being thrown around the personal finance world:

Avoid paying off debt so you can put money into investments.

Avoid investing until you can pay off debt.

Don’t worry about retirement until you’re debt-free.

Start saving for retirement yesterday.

And so the list goes.

No matter what financial question you have, there will be at least two experts telling you opposite ways to solve your problem – and both will say that their way is right.

Here’s the thing: there’s no right or wrong way to do things in personal finance. What makes sense for you won’t necessarily make sense for me. Why? Because even if our balance sheets look the same, our circumstances do not. When it comes to taking financial advice, the best thing to do is focus on what makes the most sense for your finances and finding the balance within that.

So, if you really want to have your personal finance questions answered, then what you need to do is seek wisdom and seek balance.

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