Three Easy Strategies to Start Investing in Your Personal Development
If you see things the way I do, you’d know that hindsight always makes understanding past choices easier, especially when it comes to money matters. Instead of dwelling on past financial mistakes, we should concentrate on building a strong financial future. That’s why the saying “there’s no time like the present” is so true, especially when it comes to planning and investing for future security.
1. INVESTING IN THE FUTURE
When people talk about investing in themselves, they often think about securing their financial future first. As we grow older, we realize that time isn’t always on our side, unlike what we believed when we were younger. That’s why the smarter, more experienced version of ourselves knows how crucial it is to start investing early.
A sensible step toward ensuring future financial security is setting up the right investment accounts. The three common types outside of workplace plans are Roth IRA, Traditional IRA, and general investment accounts.
ROTH IRA
The right account for you depends on your personal situation. I opted for a Roth IRA with Betterment, a well-known robo-advisor that’s cost-effective. They also manage account rebalancing, which was a big help for me when I was just starting out with investments.
A Roth IRA is a great option for self-employed people like me because you pay taxes on your contributions now, avoiding taxes on withdrawals during retirement. I prefer paying taxes now while I’m earning, rather than when I’m retired and might have fewer income sources. However, keep in mind there’s an annual contribution limit, which was $6,000 in 2020, or $7,000 if you’re over 50.
ANOTHER INVESTMENT ACCOUNT
In addition to the Roth IRA, I opened a general investment account with Acorns. This service rounds up your purchases to help you save and invest, which is perfect for anyone who finds it hard to consistently set money aside.
I started with Acorns Lite, costing $1 a month, instead of their Acorns Personal package at $3 a month. My Roth IRA and desire for another investment account influenced my choice. Like Betterment, Acorns takes care of diversification and rebalancing for you.
2. KEEP A CHECK ON YOUR NET WORTH
While investment accounts are a great start, monitoring your net worth is also crucial to see your financial growth. A few years back, when I was working on becoming debt-free, I found Personal Capital, a user-friendly platform to track net worth.
Setting it up might be time-consuming because you need to connect all your accounts, but once that’s done, it gives you a clear picture of your finances. Watching your net worth increase month by month is not only rewarding, but any progress is a sign of financial achievement.
3. LIFE INSURANCE
Life insurance might be an uncomfortable topic, but it’s something you shouldn’t overlook, especially in today’s uncertain world. My spouse and I talked about it for years and recently decided to go forward with it.
Choosing the right life insurance policy depends on your personal needs. For a straightforward term policy, Bestow Life Insurance is a good starting point. Their application process is easy, and you get a quote for your premium in just minutes.
While life insurance isn’t a direct investment in your future, it’s a critical step to securing your family’s future in case anything happens.
SUMMARY: INVESTING IN SELF
In short, you can start investing in yourself today through a few key ways. Some essential methods to consider are:
– Setting up investment accounts
– Consistently checking your net worth
– Getting a solid life insurance policy
If you diligently follow these steps, your future self will thank you for being financially savvy. What unique methods have you found for investing in yourself?
