Investing 101: What Every Investor Should Know

Here at Lasso, we love to partner with top industry experts to bring you the best investing insights each week. This piece was co-authored by Nik Schuurmans, CFA, President and Partner at Pure Portfolios.

Everybody could use more money – and when it comes to your big goals like homeownership or retirement, even more than just a little extra would be nice, right?

In fact, one recent study showed that 76% of Americans had at least one big financial regret, including not starting their retirement savings sooner. But sometimes saving just isn’t enough to reach your goals – and that’s when it’s time to turn to investing. 

Why Investing is Important

You’ve put in the extra hours, started up your side hustle, and sold your unused junk on eBay – but even after all that hard work, you’re barely making a dent in your savings goals – what gives?

The answer is in what you’re doing with all that extra dough you’re making. If it’s just sitting in a bank account, you might be making less money than you think, thanks to historically high inflation rates. Cash (in your savings account) lost 4.7 percent of its value in 2021 alone (ouch). 

The best way to combat the inflation boogeyman? Investing. 

We all know that investing comes with risks, but did you also know that the stock market has delivered an average annual return of about 10% for the last century? Those returns don’t just offset inflation rates, but can also passively grow your money (no extra hours at work required). 

The proof is in the data pudding: saving money is great, but you’re more likely to reach your financial goals with a solid investment strategy. 

5 Things Every Investor Should Know

Beginning your investment journey can be overwhelming – who do you turn to for help? How much money do you need to get started? One Google search for “how to begin investing” and you’ve got literally millions of results, all with conflicting advice. 

That’s why we’re cutting through the investment fog to bring you our top five investment 101 tips and strategies – knowledge every investor should know to make the most of their investments. Let’s get started. 

1. Start Today 

Our number one tip? Get started. 

Time in the market is the best weapon to have in your arsenal. That 10% annual return we mentioned earlier is worth a lot more over several decades than it is in one year alone. Even if you only have a small amount to begin with, you can begin investing. Remember, consistency plus time is the recipe for success. 

2. Identify Your Goals

Are you saving for retirement? A new house? An emergency fund?

Having clear intentions will pave the way to creating an investment strategy aligned with your goals, while also keeping you motivated along the journey. Take some time to write down your short-term and long-term goals – the more specific, the better. 

 3. Figure Out Your Pain Points

Remember that risk we talked about earlier? It’s worth your attention, too. 

As you’re identifying your goals, you should also think about your pain points. What amount of risk are you comfortable with? Would a 20% loss in six months send you worrying out the investment door, or would you be fine with riding out the market’s volatility?

Clearly identifying an acceptable range of investment outcomes will help you create and stick to a long-term investment plan. 

 4. Get Expert Advice When Necessary

You might think that financial experts are reserved for the Warren Buffets of the world, but you don’t actually need to be wealthy to be an investor. 

With new, innovative applications, nearly anyone can sign up for an investment app, transfer money, and invest with just a few dollars. 

And if you’re looking for advice along the way, professional advisors can help you develop an individualized plan tailored to your specific needs. Just as there is a range of investment strategies, there is also a wide range of financial advisors out there – take your time and shop around until you find someone that really clicks.

 5. Optimize Your Game Plan

Another great way to utilize a financial advisor? Optimization.

Beyond creating a savings and investment plan, an advisor can also help you find ways to optimize your taxes, spending behaviors, and risks to get even more bang for your buck.

Begin Your Investment Journey with Lasso

Are you ready to start investing toward your financial goals? Want to connect with industry experts to make the most of your financial plans? Lasso is here to help – download the app today to set your savings goals, invest your money, and anonymously meet with financial advisors.

Featured Co-author

Nik Schuurmans founded Pure Portfolios to share his passion for finance directly with people. When he’s not creating top-notch content for clients or sharing his knowledge right in the classroom, you can find Nik golfing, coaching, reading, and spending time with his family. 

 

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