I am 32, single, debt free, have 6 months of living expenses saved in an HYSA, meet my employer match for my 401k, and after my monthly budget I have an extra 2400 left over each month.
I am considering putting 1k a month into a mutual fund my BIL suggested (he is a wealth manager with 20+ years of experience and is very successful at what he does).
But I’m having a hard time pulling the trigger because I am afraid of the risk. Ppl who have invested what are your thoughts? Anyone regret it?
Posted by cmanster
5 Comments
There is almost no risk. You’re going to retire in 25 years or so. Look at any 25 year old spread of the S&P500. It always goes up in the long term.
Investing requires a long term buy and hold mindset. If you are investing in low risk mutual funds from reputable companies with a 10 year hold period or greater you’re going to be successful. I’m guessing that your bil’s recommendation is going to meet that criteria. The key is going to be whether you can handle seeing the number go down, because it’s going to happen. As long as you don’t sell the dip, you will be successful.
The biggest risk you can make is doing nothing at all and missing out on opportunities. However, if you’re that worried, then start smaller; don’t do a $1,000 but rather maybe start with $500. The fear will hopefully pass once you gain experience and understand the financial product better. Also, yes… you definitely should be investing some of your money but you should start at a rate that you’re comfortable with. For example, I started out with as little as $100 a month because I was so nervous.
>I am considering putting 1k a month into a mutual fund my BIL suggested (he is a wealth manager with 20+ years of experience and is very successful at what he does).
Him being successful does not necessarily imply that his investment recommendation is good for you.
Invest! In the long run, the stock market goes up.
You should be saving at least 15-25% of your income for retirement. You can’t afford not to invest responsibly for retirement or inflation will seriously hurt your future finances.
Getting started with investing isn’t necessarily as complicated as you may think. Depending on your income and tax bracket look into contributing to a Roth IRA. If relevant open a Roth IRA at a discount brokerage like Fidelity or Vanguard. Target date funds can be completely set it and forget it for those in their 30s. https://investor.vanguard.com/investment-products/mutual-funds/profile/vttsx Note that the expense ratio of VTTSX is .08%. You will want to ask your BIL about the expense ratio of the mutual fund he recommends.