Knowledge = power. Are you giving 100% to reducing your debts and improving your financial situation? Have you made enough of progress so you can see the light at the end of the tunnel? Maybe you even have all your debts paid off? If so, then give yourself a pat on back! You deserve it.
Reducing and eliminating debt is a key step in the long path towards financial independence but what is the next step? Investing money which will produce future income is the next step. At some point, you are not going to be able to work anymore – or more likely you won’t WANT to work anymore but how will you survive? Some workers have good pensions they can rely on, the rest will have to rely on Social Security and their own investments for their income. One of the keys to investing is knowledge – it doesn’t matter whether you are planning to do all your own investing or turn things over to a financial advisor – the more you know, the better off you will be. Even a little bit of knowledge will go a long way. Nobody cares about your investments as much as you do so you better know what is going on. Regardless of your debt/investment situation it is critical that make sure that you are familiar with investing basics – at the very least you don’t want to let anyone take advantage of you!
I’m still paying off my debts but I would like to start investing for retirement as well.
If you feel you have a good handle on your debt repayment plan, especially if your debt load is getting light, then it might be an idea to start saving for retirement as well. The problem is that if you have been really, really focussed on wiping out your debt then you might not know anything about investments and how to get started. You need to start learning about investments now.
I’ve paid off my debts and I now want to start investing – the problem is that I don’t know where to start.
First of all – don’t panic or make any quick decisions. Continue to save as much money as you can and just keep it in a high-interest bank account. Once you figure what to do then you can start your investment plan. There is no rush! The most important thing to do at this stage is to start learning about investments now! Books, blogs, friends, relatives – learn as much as you can.
I’m working very hard on paying off my debts and I think the idea of investing while I have debts is really dumb!
In that case, keep going with the debts – nothing wrong with that strategy! However, while you are beating down the debt monster – how about spending a little bit of time learning about the next step of investing? Even if you are years away from making your first investment then do yourself a favor and spend a little bit of time each week to learn more about the next phase of your financial life.
Remember: Knowledge = power.
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I'm just an average mom, trying to live a frugal life and get out of debt. I write about things that have (and haven't) worked to improve my family's financial situation. What works for me may or may not work for you, and you should always consult a financial advisor before making important financial decisions.
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