Next, you invest the entire $105 at the same 5% return for another year.
In other words, the amount you gained helps you earn even more.Įxample: Let’s say you invested $100 at 5% return for 1 year. Once you know your risk tolerance level, you can look into company stocks that fit your style and goals.Ĭompounding is a process in which you take the returns from the investment and re-invest it. Thanks to Schwab, you can find your risk tolerance level here. This is the key! Not everyone is the same, and hence you need to cater your investment choices based on your risk appetite. So, the million-dollar question – If you are just getting started, where should you invest your hard-earned money?Īs a millennial who experienced the 2008-2009 Global Recession, I was somewhat clueless and skeptical.īefore you take a deep dive, I’d suggest you carefully read and understand the below 3 key aspects of investments: These days, automated robo advisors can predict market moves and provide suggestions to align your portfolio with economic and market conditions. Over the past couple of decades, there has been a significant shift in not only the investing options available but also in the way we invest.Īrtificial intelligence is now beginning to play a role in investment decisions and recommendations made by many experts and industry gurus. You get the point – I was very skeptical about trusting some one else with my money!Īs the years went by, I have also heard countless folks asking similar questions.
– How can I trust a big bank or an investment firm with my money? – In the event, an institution commits fraud, what happens to my investments? – What are the best investments for a beginner? Back in my 20’s, I used to have a lot of questions regarding money/investments to the tune of: