Make your money work for you.

By Jenny Hoff

Money is a wondrous thing. It can buy you food, shelter and entertainment, and it can, in a sense, reproduce. When you use your money for more than purchases and also invest it, you are giving your money the chance to grow more money.

OK, so now that you’re convinced you need to get in on this action, here are some first steps you should consider taking.


The more you can invest, the more you’ll be able to earn through compound interest. Pam Friedman, an Austin-based certified financial planner with Silicon Hills Wealth Management, suggests to start investing once you have a six-month emergency fund in your savings account. Then make investing a priority. Think of it this way: If a new tax of 10 percent were suddenly imposed, you would figure out a way to pay it. Consider this a tax that is going to set you up in retirement, so find the money in your budget to invest.


If your company offers a 401(k) plan in which it matches your investment up to a certain amount, make sure you participate. Sign up for whatever amount you can spare through your work, ideally enough to get the maximum match from your company, and that money is immediately deducted from your pay every month, pretax. If you’re self-employed, there are also solo 401(k)s that can afford you the same tax benefits.


Do not pick stocks. This is a losing gamble, and in the long run, you will not make as much money as you would with an index fund, which will allow you to own a little bit of all the major companies. One of the cheapest and easiest ways to get into the stock market is through Vanguard, through which you can invest in the Vanguard Total Stock Market Index, among others. While an index fund won’t deliver an incredibly high return in the short term, in the long term, it will grow your money much more than if it were sitting in the bank. When investing, Friedman notes it’s also important to stay the course. “Allow your investments to achieve their intended purpose, whether that means needing the money in three or 30 years,” she advises. In other words, don’t take your money out as soon as there is a dip in the stock market. Let it ride the waves.


Depending on how complicated your financial situation is or what your goals are, it might be worth it to hire a financial planner or seek out a financial advisor. However, look for a fiduciary, which means this person is legally obligated to act in your best interest. Additionally, there is a multitude of apps you can use to build a portfolio, set dream goals and figure out your budget. The most important step is just taking one, and doing so as quickly as possible. The earlier you can start investing, the more money you’ll make in the long run.

“Women tend to retire with two-thirds the money of men, even though we tend to live longer,” Friedman says. “Investing must be a priority in women’s lives.”

Investing in the stock market isn’t exclusive to the wealthy. In fact, the younger you are, the better position you’re in. Example: You have $10,000 to invest one time and plan to take the money out when you’re 60. Here’s how much you’ll get back from that same $10,000 investment, with a growth rate of 8 percent (slightly below the historical average), depending on the age you were when you invested it:

Invest at 40: $49,000 | Invest at 30: $109,000 | Invest at 20: $217,000


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