Investing money, or putting it aside for the future in a form that will appreciate, is always a good idea. Investopedia points out that you should make sure your money works for you by earning interest while you’re not using it. There are certain events that provide compelling opportunities for building your portfolio, and it’s useful to keep these instances in mind. Here are three of the most common events which should definitely have you exploring your investing options.
When Your Salary Increases
You’ve developed the habit of budgeting to match your previous paycheck. When that paycheck gets bigger, you have a choice — either increase your spending until you use up all the extra money or continue your existing habits and invest the surplus. Daily Finance advises that the best response to a pay raise is to forget you ever got it. In other words, simply apply the new excess to an interest-bearing account, and keep on living at the same level that you have been. And if you want to earn even more money toward your investment, use a site like TD Ameritrade, which offers free trades for 60 days and up to $600 off.
When Your Employer Matches Your 401(k) Contributions
Putting money away for retirement is generally a prudent choice, and there is a wide array of investment options from which you can pick. However, if you are lucky enough to have an employer who matches your 401(k) contributions, this is free money, and you absolutely need to set aside the funds to take maximal advantage of the offer. No amount of interest can equal the profit you will see from those matching contributions, so do the math and work out how much will give you the greatest benefit from this investment program — even if it means you carry lunch to work instead of going out to eat.
When a Chunk of Money Falls Into Your Hands
It does happen sometimes — an inheritance may come your way, or perhaps you have the chance to sell a rare collection of early comic books or an extremely valuable antique that you scored at a yard sale. No matter how you receive the extra money, it is above and beyond your monthly budgeting needs. If you’re living within your means already, you can afford to take at least a portion of that windfall and invest it wisely. You may want to splurge and have fun with some of it, but you’ll feel better in the long run if you also invest a portion for the future.
Investing can take many forms, depending on your resources and the state of the economy. You may wish to put money into stocks, bonds, mutual funds, an IRA or even into real estate or precious metals. The Securities and Exchange Commission points out that, “For most people, the only way to attain financial security is to save and invest over a long period of time.” Keeping this in mind, it’s important to take advantage of special investment opportunities when life presents them to you.