Saving and investing can seem like basic ways to make sure you stay financially stable, but there can be a lot more options out there than you may initially think. There are different ways of investing that can be better suited for different lifestyles. Mutual Funds and ETF’s can both be good ways for you to start investing, but saving money can still be just as important.
What is a Mutual Fund?
Mutual Funds can be a way to invest in the stock market with less risk than may be encountered when buying individual stocks. When you invest in a mutual fund you are putting your money into a large group portfolio where it is combined with other people’s investments. This gives you an opportunity keep your investments diverse while still having your money in a centralized location. Unlike stocks, mutual funds can generally only be trading during specific times of day, usually after market hours.
What is an ETF?
An ETF can be very similar to a mutual fund with a few important differences. Unlike a mutual fund, an ETF trades like a stock. This means that you can have more control over what happens with your ETF’s when you buy or sell them. ETF’s can still have many of the benefits of low-risk that can come with mutual funds. By being mindful about which ETF’s you invest in, you can potentially make money with very low risk.
How Do You Save Money?
After you have weighed the options of ETF vs mutual fund and decided which one best fits the way you want to invest, you can begin to put money into the market. The next big money question can be how to save the money you don’t invest. It can be important that you don’t invest all your money and that you keep emergency funds as well as plenty of money for short-term spending available and easily accessible. This can be done by keeping savings in a bank account that is separate from your checking account.
By choosing the best bank you can find to hold your money you can save on monthly fees. If you find yourself being constantly tempted to use the money in your savings, you can put hold it in a separate bank entirely to help make it harder to use for non-emergency situations.
Get the Most out of Your Money
By finding a balance between saving and investing you can help ensure that you can remain financially stable. While investing can come with some risks there are ways to minimize it and help you get the most out of what you put in.
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