It’s (Almost) Always the Right Time to Start Investing for Retirement

The word investing often triggers visions of hedge fund managers and big bank executives. It reminds us of countless stories of corruption and fraud. Or of the epic collapse of the stock market in 2009, of lost pensions and depleted retirement funds. It’s an activity reserved for the privileged, the wealthy, and the powerful. All of these misconceptions have made many people skeptical of investing, especially Millennials.

The Millennial Generation tends to be anti-establishment when it comes to their money, which is why so many tech companies are developing apps to try and reach them. Millennials are facing a unique set of circumstances that make saving, and in turn, investing, very difficult. They’re strapped with hundreds of thousands of dollars in student debt, they live in world of constantly changing technology, they’re skeptical and confused about investing, and they think they need large sums of cash to start.

An Easy Way to Start Investing

While each of these obstacles can be overcome, I think the need for cash is most easily debunked. The first and most simple way to begin investing is to make sure you are enrolled in your employers’ retirement plan. People don’t always associate their retirement account with investing; however, it’s an easy way to have your money automatically taken from your paycheck and invested in the market. Another great part of investing with your employer is that they will pick your investment options for you so you don’t have to do much thinking or stressing out about what to pick.

Many Millennials are abstaining from these contributions in order to make payments on student loans, as they are crippled by their immediate need for cash and feel like they can’t afford even small contributions to their retirement funds, and as a result are missing out on a huge opportunity to get invested early.

Size Doesn’t Matter with Investing

While the advent of new technology does have many downsides, it has also made the investing landscape much more competitive, forcing minimum cash requirements down. There are a multitude of apps dedicated to simplifying investing for Millennials, and each has its own unique requirements. For example, it is possible to begin investing with as little as $5 using Stash. Like other investing apps, Stash uses a questionnaire to determine your risk preferences and time horizon. Stash then provides a list of recommendations, but the users do the actual investing.

Drive Wealth is a site that requires no minimums to start investing and even allows you to purchase fractional shares of stocks so that you don’t have to worry about not having enough money to own one company in particular. Another great feature to Drive Wealth is that they allow you to open a free practice account so you can test drive the investing process on your own without jumping in with real money.

For those who follow the stock market more closely and want to make their own decisions, Robinhood, is a good option. As long as you have the money to purchase one share of stock, you can join, and there are no fees or commissions. Acorns uses a system called “round-ups.” If you spend $8.50 on breakfast, the app would round this to $9, and 50 cents would be contributed to your investment account.

Size Still Doesn’t Matter

If an app is not your cup of tea for investment options, you can still use just about any traditional firm, like Vanguard or Fidelity to start investing on your own. If you are using your investments for short or medium term goals, you should consider a brokerage account for your investments or if you have a longer term goal, then you would want to invest in a traditional IRA or a Roth IRA. You can open up any of these for free with most investment firms and get started with a simple transfer from a bank account.

You could buy individual stocks for the price of a share of stock or you could buy numerous stocks or bonds when you buy one share of an ETF (Exchange Traded Fund) or Mutual Fund. Many of these are available for around $10 to $20 a share, and in many cases you can automate your transfers to these accounts or these investment options so you don’t even have to think about your investments on a daily basis.

It’s Never Too Early or Too Late to Start

Investing is an important aspect of any healthy financial plan, and not starting early can hurt you in the long run. However, just because you may have skipped the 401k contributions for a few years, or you’ve been putting all your cash towards paying down debt, doesn’t mean you can’t make a small change to get you on your way!

First and foremost, have an emergency fund. I would encourage everyone to make sure they have some cash to fall back on before investing. If you have an emergency fund (6-8 months of expenses in cash), then it’s time to get to work! It doesn’t take $50,000, or $10,000, or even $1,000. You can start today with next to nothing. By committing to making small contributions your investments will grow each year, and help you achieve your goals! You work hard to earn your money, when you invest it, you make your money work hard for you.

It’s (Almost) Always the Right Time to Start Investing for Retirement is written by Shannon McLay, Founder and CEO for

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