Is It Time for Me to Start Investing?
Not retirement investing. Just… ordinary investing.
At the beginning of October, I started making income projections through the end of the year and realized that I am likely to end 2016 with roughly $9,000 in my savings account, in addition to $5,500 in a Roth IRA. (I’ll also have around $40,000 in the 403(b) retirement account that I haven’t touched since 2012.)
What Am I Going to Do With My Increased Income?
At what point do I take some of that money out of savings and start putting it in something that’s likely to yield a higher return?
I had been thinking about this question even before GABY DUNN’s most recent Bad With Money episode, but it was kind of perfect to hear “What Is A Stock?” right around the time I was thinking “how do I start investing outside of retirement accounts?”
Dunn interviews Sallie Krawcheck of Ellevest, who says that anyone who is out of debt (like me!) should be putting as much as 10 percent of their income into ETFs or mutual funds. Which… I could do, actually. It would be really reasonable, at this point in my financial life.
There are two big sticking points with investing, of course; first, you could lose all your money (gasp!) but I’m assuming that buy-and-hold is a decent enough strategy here. Diversify, ride out the market downturns, all of that.
The other sticking point for me is fees. How much will it cost me to put my money in, and how much will it cost me to take my money out, if I need to pay for something that my emergency fund doesn’t cover? What about all of the other fees? (I saw that John Oliver segment.) If I’m only investing a few thousand dollars every year, how much of my return will those fees eat up?
I don’t know the answers to these questions, but I think it’s time to start learning them.
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