Many of us do not think of ourselves as investors. We may have created a budget and watch our spending; we may have savings accounts—or even a checking account that earns interest – but we may not have begun investing our savings because we haven’t mentally crossed the line from being a saver to being an investor.
However you may be an investor even if you don’t think you are. For example, if you have a 401k retirement account that is invested in some mutual funds, you are an investor. If you have a whole life insurance policy that has an investment product component, you are an investor. The first step to becoming an investor is realizing that you can be. It’s about seeing yourself as an investor – and then taking a closer look to realize you may already be making investment choices with your money.
Investing matters because it is a good way for your money to work for you. The only way you will have the ability to achieve your life goals over time - including financial security for retirement - is to save money and then invest money.
Today we all face more financial decisions than in the past. We used to have one job over our entire work life and pension plans that took care of us when we retired. Now we are often responsible for our own financial security in retirement—and we are living longer so our money has to last longer. We also have more ways to save and invest now. Investment options may be harder to understand. People who are scared of the idea of investing may think they don’t know enough to even get started. The state of financial markets and the economy also affect investing. Market swings and economic downturns can cause some people to be even more afraid to invest.
This section provides information on basic investing concepts and can help you learn about investing and get started even if you have never considered yourself an investor. The section explains some of these concepts—and more--in greater depth and detail.