First-Time Investor Tips

According to the consulting firm McKinsey & Company, women are opening new investment accounts faster than ever before. If investing piques your interest but you don’t know where to start, there are many educational resources online. One such resource is Ellevest, a women-focused investment platform. HerMoney Media is another great finance website for women. There’s also a trove of podcasts that help make money and investing understandable (check out our money podcasts article here).

Before diving in, the experts stress the importance of getting your financial house in order. First, figure out your budget — it’s hard to invest if you don’t know your money situation. Then, focus on paying down debt, especially debt with higher rates, like credit cards.

“You don’t have to get 100% out of debt,” says Jennifer Ridley Hanson, CFP®, director of wealth planning of SlateStone Wealth LLC, “but you need to get a handle on it. You don’t want to start investing and then pull money out to pay bills.”

Also, start building an emergency fund to cover unexpected expenses. Ridley Hanson says “conventional” financial advice will tell you to have funds to cover six month’s worth of expenses — which is great if you can achieve that — but in her experience, that’s not doable for most people. She recommends starting with one month’s worth of expenses in savings, and try to build up to three months.

Once you’re ready to start investing, partner with a trusted investment professional who is a fiduciary to act in your best interest (this is a question you should ask when interviewing advisors). Once you start investing, automate it with a monthly direct banking transfer to your investment account, says Beth Norman, CFP®, AWM, managing director – financial advisor with RBC Wealth Management.

“Inertia has a way of carrying us through to start a big goal, and setting up auto-pay allows you to harness momentum. If the payment is automated, then you have to do something to change it or manually stop it,” says Norman.

Another option you can consider for investing: a robo-advisor. A robo-advisor is an automated financial advisor that provides wealth management services with little to no human intervention. Ridley Hanson isn’t opposed to online platforms and robo-advisors like Fidelity, Schwab, Vanguard and others — but there are caveats.

“It might be something you dabble in if you understand the risks,” says Ridley Hanson. “But for your ‘serious’ money — future [and] family goals — put that in the hands of a professional.”

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