Joey Feste Explains the Right Time to Start Investing
There are many preconceived notions about what investing looks like, conjuring up images of professionals in suits on the stock exchange room floor. However, Joey Feste — the Senior Managing Partner of KM Capital Management believes that investing is much more accessible than most people realize. He stresses the importance of developing positive financial habits prior to investing, such as regularly putting money away every month, budgeting out your expenses, and cutting out any excess. Once you have a little bit of money to play with, you can start to invest.
Joey Feste believes the answer to ‘When should I start investing?” is quite simple: as soon as reasonably possible if all of your high-interest debt has been paid off, and you’ve built an emergency fund to provide a minimum of three months of basic income should you lose your job. Joey Feste also suggests considering what you are planning on doing with the money you invest. If you are planning on using it as a down payment for a house, for college tuition, or retirement, your investment choices and strategies will change accordingly. If you are planning on using the money sooner rather than later, consider a conservative account for your money, versus long-term financial goals, which allow you to choose riskier investments.
Employer Match Program
A great way to get started is with an employer match if it is available to you. You may need to speak to your HR representative to see if your company offers an employee match, but it is a highly effective means to maximize your funds. Some companies, for example, will contribute an amount equal to 3% of your salary into your 403(b), and after that, they would match the first 3% that you put in, which is a great way to start putting money away. Another effective strategy is the ‘cookie jar’ approach. When it comes to saving money, it is less useful to focus on the goal, and more useful to focus on systems and strategies, for example, putting away 5% of every paycheque into a savings account.
Remember to Keep it Simple
Once you’ve saved enough money to feel comfortable investing, Joey Feste has a few starter tips. First and foremost: keep it simple. Investing is a skill like any other, and will take time, dedication, and patience. You can start with robo-advisers to make investing as simple and accessible as possible. No prior investment experience is required and it is east to set-up. Their automated intelligence tracks your investments in the background, allowing you to pay lower fees in the process. Some of the most popular and well reviewed are Wealthfront, M1 Finance, and Betterment. Want to get more ‘hands-on’? Joey Feste suggests putting your money in low-initial-investment mutual funds.
Mutual Funds
Mutual funds are investment securities that allow you to invest in a portfolio of stocks and bonds through a single transaction, making them perfect for new investors. However, it is important to note that many mutual funds require a minimum of between $500 to $5000. Some mutual funds will waive those minimums as long as you invest a minimum of $50 or $100 every month.
Lastly, Joey Feste explains that when it comes to choosing the right time to invest, don’t compare yourself to anyone else. Make investment decisions that align with your income, savings, level of debt, and overall financial security.
