Newbie needs advice

This topic contains 1 reply, has 2 voices, and was last updated by  Andrew Savikas 10 months ago.

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    I just learned I’ll be receiving an unexpected tax refund! I’d like to try my hand at investing. I’ve never done any investing on my own – I’ve only used employer 401Ks and IRAs (which my son-in-law set-up for me). I don’t have any idea where to start. Please advise!


    Andrew Savikas

    @chris Welcome! Congrats on the tax refund, though I’ve always found it a tad bittersweet to realize those refunds mean I gave an interest-free loan to the government..

    Your question is quite broad, and without knowing more about your particular circumstances it’s probably worth a reminder to be sure your overall personal finances are on strong footing before getting adventurous with alternative investments. But assuming that you don’t have any consumer credit debt (like car loans or credit cards, which you’d want to pay off first), that you’ve got a healthy emergency fund (3-6 months of living expenses), and that you’re on track with retirement savings, then if you’re looking to put a small portion of that refund into investing, then there’s certainly a lot of interesting options out there.

    You mentioned you’re a “newbie”, so early on your focus should be on learning and education rather than shooting for a big return. And before doing anything with that money, it’s important to know what your goals are. Why do you now want to try investing? Are you looking to grow long-term savings? To generate stable cash income? To speculate (ie, gamble)? To support a specific business or brand (a la Kickstarter)? It’s also important to consider how soon you may want (or need) the money.

    Here’s some posts from the blog you might find helpful:

    While this site focuses on crowdfunding and alternative investments, someone in your situation may also want to look at the new crop of “robo-advisors”, like Betterment, Wealthfront, and Hedgeable, which offer low-cost ways to quickly build up a diversified portfolio based on your savings goals and time horizon.

    As someone just starting out, you may also want to seek the advice of a professional Financial Advisor. And from experience, I’d highly recommend the great book “All Your Worth” as an accessible overview of simple strategies for saving and investing.

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