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6 Steps to Investing for Retirement

Investing for retirement doesn’t have to be complicated.

When you take that first leap into working from home, one of the scariest new ideas is paying for your own retirement. You need to move beyond saving and if you haven’t already started investing, it’s time to get serious.

Don’t hold yourself back just because you’re an investment beginner (especially if you’re starting after your 20s. Read through some tips for beginners and create a plan for this exciting venture.

1. Establish an Investment Budget

The first step in safe investing is to understand how you’re spending your money. Track all of your monthly expenses and don’t forget to factor in expenses that only pop up once or twice a year. Figure 20 percent of your expenses and use that as your savings and investment goal.

Don’t forget to clean up your credit, with a goal of eliminating credit card debt and other loans. Finally, establish an emergency fund and keep it healthy.

2. Choose a Trustworthy Expert Advisor

You have a lot of options, such as an investment advisor at your bank or a customer service agent from your local brokerage firm. You may even decide to talk to your neighbor who has been successful at investing, if you’re absolutely sure you’ll get good advice.

Your goal here is to get information about resources and tools to help you make your own investment decisions. For example, you may learn the pros and cons of a tax-free savings account and decide that it’s comparable to the retirement savings plan you had before working for yourself.

3. Begin With a Goal in Mind

Many beginning investors start with companies they love, such as their favorite cellphone company or the corporation that provides jobs in the community. If you have several years between now and retirement, this tactic may work fine for a while. On the other hand, if you want to save enough for a large purchase, you’ll want to invest more aggressively.

A look at popular international investments may open up a new world of possibilities.

4. Diversify Your Investments

International millionaire, Sjamsul Nursalim of Indonesia, established himself financially in coal, property, and retail, and he also invests in real estate, owns portions of several store brands, and invests in tires for cars and motorcycles. What can you learn from this expert? Put some of your money into a sure thing and risk a percentage of your investment capital in more serious areas. For example, you could start with a 401k or an IRA and work your way into foreign stock or individual stock investing.

5. Make Automatic Investments

Consider setting up a regular payment system with a certain amount of money going into stocks or funds. Consistent investments allow you to buy more when prices are low and continue to invest when prices are high.

If you’ve started early, you’ll have plenty of time to ride out the ups and downs of the market. Establish a habit of rebalancing your portfolio once a year. Use this time to update your goals and to decide on an asset allocation that suits your current risk capacity.

6. Continue to Educate Yourself

There’s plenty of information available through financial magazines and seminars. Look for articles about investing strategies, blogs that cover your investment opportunities of choice, and follow the success of millionaires around the world.

Don’t make the mistake of informing your investment decisions based on TV spots. These blurbs tend to present current bits of information, leading to short-term thinking. On the other hand, you could monitor social media, watching for popular trends and trying to invest ahead of rising trends.

Working from home requires a lot of hard work and dedication to your financial goals. Put your mind at rest in at least one area of your life by establishing a long-term investment and retirement plan, using these steps and continuing to learn more about financial opportunities.

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