8 Best Investments for Beginners

If you’re a beginning investor looking for ways to make your money grow, you’re not alone. Going it alone when learning to invest is a tried-and-true path. But everyone has to start investing money somewhere.

Before you start investing in the market, it’s a good idea to have some cash on hand in an emergency fund or checking account. Here are some options to consider.

Best Investments for Beginners

Many financial experts recommend you establish an emergency fund first before investing money in the market. That way, unexpected events won’t derail your daily budget. Lastly, emergency funds provide incredible peace of mind. Life is easier when unexpected repairs or doctor’s bills don’t cause financial stress.

1. Emergency Fund

If you have cash on hand, it’s best to keep it in a checking account (and not under your mattress.) Much like the credit bureaus report how you handle credit, an organization called ChexSystems keeps track of how you handle checking accounts.

2. Checking Account

Savings account withdrawals used to be regulated. In the past, you could be penalized if you withdrew money from your savings account more than six times per month. However, this changed during the pandemic. For this reason, it’s best to check with your bank if they charge fees for savings account withdrawals, so you’re informed.

3. Savings Account

High-yield savings accounts are similar to checking accounts, but they offer a slightly higher interest rate. This means you can potentially earn more than your regular bank account, which is why it’s essential to compare the rates offered by different banks before opening a new one.

4. High-Yield Savings Account

The most common retirement plan employer’s offer is a 401k. A 401k is a type of retirement plan that allows you to put away money before it gets taxed and invest it.

5. Retirement Plans – 401k

Another type of retirement plan is called an individual retirement account or IRA. An IRA is a type of retirement plan that lets you save up to $6,000 per year (or $7,000 if you are above age 50.)

6. Retirement Plans – IRA

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