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The secret’s out: You can’t save your way to wealth. To build true wealth for yourself, you need to invest.
Welcome to your home base for wealth-building. Check back here weekly to money up with Marie Claire and boost your net worth. Throughout your journey, let these two points serve as your North Star:
- The best time to start investing is ASAP—right after building an emergency fund and paying off high-interest debt.
- When it comes to picking the right retirement plan, one is better than none.
You don’t need an MBA in finance to start investing. But you do need a plan, says Alexa von Tobel, founder of LearnVest, founding partner of Inspired Capital and a certified financial planner. Here are four steps to help you get started.
1. Ready to invest? If you're already building a strong emergency fund, and are able to pay your monthly bills and high-interest debt (like school loans), then you are in a good place to start investing.
Kiplinger generally recommends that you have at least enough in a cash reserve to cover your expenses for six to 12 months.
2. Build your base. Your emergency fund is your short-term safety net, and your 401(k) plan or IRA is your long-term safety net. If you're tending to both buckets, then you can afford to take risks in the stock market.
Most experts recommend starting with mutual funds, which let you diversify and reduce risk by investing in a lot of different stocks. But this is just one of many investment options.
3. Know your options. Depending on your current earnings and savings, hiring a financial advisor could be a lucrative move. “In short, a financial planner takes your goals and the full picture of your assets, and establishes the appropriate amount of risk that you can have across these investments to be able to protect yourself for today while achieving your goals for tomorrow and decades out," says von Tobel.
If you are not ready to pay advisor fees, you can look into robo-advisors or the best investment apps for beginners; these platforms automate the investing process, and thus, make it more affordable and accessible.
4. Educate yourself. Own your decisions. No matter the path you take toward wealth today, you absolutely want a firm grasp of all the decisions made on your behalf. This way, you can have full agency over your financial future once and for all. It starts with understanding the basics: the five main types of investment accounts and the four types of investments.
Remember that wealth education and wealth-building will not happen overnight. Take steps to routinely educate yourself at the right pace, and think of investing as a long-term game toward financial literacy, financial independence, self-made wealth, property ownership—and, perhaps, an early, worry-free, and fabulous retirement.
Start your Money Up journey with Marie Claire, and check back here weekly for new guides, tips, and refreshers.
Know your foundations. It all starts with understanding the basic asset classes.
Invest in what you know.
A four-step action plan to help you decide whether you need a financial advisor—and how to find someone you trust.
Know the risks and whether you're in the right place to invest.
The risks and benefits of investing in crypto, what the heck it is and how to get started.
If you’re in a financial place where investing makes sense, here are 10 apps that come recommended by personal finance experts.
Tanya Benedicto Klich is Senior Editor at Marie Claire where she manages the Money & Career section. She also oversees profiles of female founders, funders, executives, innovators and more. Tanya was previously a Lifestyle Reporter for Forbes and Features Editor at Entrepreneur Magazine, and a former on-air reporter for NY1 News.
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