by Dana George | Published on Aug. 19, 2021
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You don't have to know what you're doing to get started. You just have to be willing to learn.
The old adage "we're our own worst critic" certainly applies to financial planning. We look around and believe everyone (but us) knows what they're doing. We forget that no one starts as an expert. We're all beginners -- at first.
If you're looking to open a retirement account but aren't quite sure what you're doing, you're in the right place. Here, we'll cover where to open a retirement account, what to look for in a good brokerage firm, and how you can build your financial savvy a little at a time.
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Simply put, a retirement account is intended to accumulate (and grow) the money you need to meet your financial goals in retirement. The earlier you start, the more time your money has to grow. But if you're late to the game, that's okay. You can still take steps to make your retirement more comfortable.
Money in a retirement account is invested in companies of all types via different financial products. Some are riskier than others (stocks), and some are designed to allow your money to grow with little risk (treasury bills). The trick with a retirement account is to diversify your investments. That way, when one investment hits a rough patch, other assets can keep your portfolio afloat. Another argument for diversification is that riskier investments tend to earn more interest over the long term, while safer investments earn less.
Your investments grow due to the power of compound interest. As long as you opt to reinvest your earnings, after a while you're getting paid interest on the interest you've already earned.
Let's say you want to buy stock in Allied Flowers. Rather than go directly to the company to purchase stock, a brokerage firm acts as a middleman -- someone to purchase on your behalf. Once you let them know what you want, they buy and sell your investments.
Find the best stock broker for you among these top picks. Whether you're looking for a special sign-up offer, outstanding customer support, $0 commissions, intuitive mobile apps, or more, you'll find a stock broker to fit your trading needs.
Better yet, some brokerage firms offer an incredible array of educational materials for people just getting started as investors.
Here are a few worth having on your radar:
There is no one-size-fits-all brokerage firm for beginners. That's because we all have different learning styles and preferences for the way we do business. While one investor may want to do everything on their own, another may want to talk to a professional who can answer questions.
The following steps can help you focus in on the best brokerage firm for you:
Like learning to swim or drive, learning to invest for retirement seems big and intimidating. The more you wade in, though, the less scary it feels. Once you begin to watch your money grow, the more your confidence grows. After a while, you'll wonder why you were ever nervous about getting started.
Over the long term, there's been no better way to grow your wealth than investing in the stock market. But using the wrong broker could make a big dent in your investing returns. Our experts have ranked and reviewed the top online stock brokers - simply click here to see the results and learn how to take advantage of the free trades and cash bonuses that our top-rated brokers are offering.
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