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What Is Investing and How Can You Get Started?

Posted on July 16, 2020

Have you ever heard the phrase “Make your money work for you?” If you have, you’ve likely been given some sort of investing advice to go with it. The stereotype of investing is to trade in the stock market, with the possibility of earning a huge amount of money or lose it all in a single day, but that makes investing seem daunting.

While the stock market is a type of investing, there is so much more to it than that. For those wanting to get invest and put their money to work, we’ve got some ways to dip your toes into it.

First, What is Investing?


young couple looking at a laptopInvesting is anytime you put money into something with the expectation of earning a profit later. It’s not just the stock market, it’s anytime you earn extra money from your existing finances. There are many ways you might already be investing. This could include a savings account that earns interest, your retirement 401K, or even your home.

Investing is a way that you can steadily grow your finances without putting in direct effort. Whether it’s a slow growth over years or a quick return, investing is a good way to increase your regular income.

There is one important rule for investing everyone should know. The higher the risk, the higher the reward. Riskier investments tend to pay out larger, but could also lead to not getting a payout at all. Less risky investments come with a smaller profit but are safer. It’s good to have a variety of low and high risk investments to earn a steady stream of money.

Get a Retirement Investment Started


old man in suit holding moneyOne of the most common types of investment that most people have is an Individual Retirement Account (IRA.) It’s a great way to save up money for retirement and many employers offer extra benefits to their employees with a certain type of IRA called a 401K that the employer will match contributions to. If you don’t have a 401K or an IRA already, you should get started right away.

With contributing money regularly to the account, it earns interest by being used to purchase stocks and bonds that pay out later. IRAs grow from both regular contributions and profits earned off of investments, giving you extra control over how much your investment pays out later in life. Pioneer offers IRAs to our members to those looking to  start saving money for retirement.

Learn More About Pioneer IRAs!

Buying Stocks and Bonds


Similarly to your IRA fund, you can directly purchase stocks and bonds to make investments. Whether you pay for somebody else to make the purchases for you, joining several people to make larger investments, or do it yourself, working the stock market can be very rewarding.

Before getting into it, you should do plenty of research about buying stocks and bonds. Stocks and bonds come with varying levels of risk, with the stocks more likely to drop and rise very quickly in value, while bonds are much more stable and low risk, but come with a lower payoff. But the stock market is very complex and should only be approached with knowledge and a plan.

A Higher Yield Savings Option


Many financial institutions, including Pioneer, offer a limited term savings option for their members. At Pioneer, they are called Term Certificates, but other institutions call them Certificate of Deposit (CD.)

These are a great tool for saving money and earn a larger level of interest. With a Term Certificate, you are placing your money into a specific account and are unable to touch it until the set term period is over or pay an early withdrawl fee. In reward of this commitment, the interest rate is higher than a standard savings account. It’s also a low risk investment, meaning your chance to losing your money is low.

Learn More About Term Certificates!

Member Benefits
IRA Term Certificates
  Savings Account

 

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