Investing can feel like an inaccessible endeavor that is reserved for those with vast amounts of disposable income. Movies like The Wolf of Wall Street have created vivid, but inaccurate, sensationalized images of investing. This has impacted how individuals perceive their ability to participate in the market.

In fact, 33% of Americans say the main reason they don’t invest is due to a lack of funds and 44% of American consumers say they don’t feel confident in making good investment decisions. Some of the most common misconceptions around investing continue to be that it requires significant capital, advance knowledge or immediate participation in the stock market. However, investing isn’t this opaque overly difficult process, otherwise no one would do it.

Today, investing is more accessible than ever. Investing can take on different forms, but has no one-size fits all approach. For those that haven’t started, it’s never too late to begin. Understanding what investing is, the most common risks, and where to look for resources is the key to getting started.

How and where to start

One of the most common questions out there is, “What can I do with $100?”  Whether it’s extra money from a paycheck or a sizable tax return, investing doesn’t require a large commitment, just a starting point.

When thinking about investing it’s really about wealth building for the future and that means investing in yourself first. For most, that all begins with a savings account. Prioritizing financial stability and creating discipline lays the foundation of any great strategy. Having funds set aside for emergencies, unexpected life events or even just a financial cushion will go a long way. Sometimes it’s as simple as setting aside a small portion of each paycheck into a savings account.

As individuals begin to build a stable foundation, investing can expand into a few different avenues that don’t have to take place within the stock market. This could be continuing growing savings through money market accounts, which are similar to a savings account with higher interest, or certificate of deposits (CD’s), where funds are set aside for a fixed period in exchange for a steady return.

Over time investing can grow to include options like mutual funds or employer sponsored retirement plans like a 401K, which tend to become the bread and butter of retirement savings. While many individuals don’t begin thinking about retirement until their 30s, increasing contribution levels even gradually as soon as possible can be a strong place to start. It’s important to remember that investing is long-term. It’s a marathon not a sprint and consistency drives results.

Risks to consider

For those that are ready and want to start dipping their toes into the market, it’s important to understand certain risks. It can be easy to fall into common patterns whether you’re new to the market or a frequent investor. Understanding and identifying individual risk tolerance is key to long-term investments strategies. Some of the most common mistakes and risks that can limit growth include:

• Looking for the “hottest” investment, whether that’s penny stocks or trending opportunities. In reality, your odds of hitting a homerun on the first try is unlikely. Investing is about consistency not shortcuts. The market likes a slow and steady approach.
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• Concentrating on only one investment: Putting all your eggs in one basket limits opportunity and increases risk. The more you can diversify across the board the more opportunities for potential growth with less volatility.
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• Reacting to market shifts: Market fluctuations sometimes cause panic resulting in individuals pulling their money out too soon. Nearly 40% of those who withdraw from the market during downturns wish they hadn’t. Whether you’re starting with $250 or $1 million, this is something you should plan to hold for the next 2 -15 years or more because historically markets have grown over time.
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Maintaining a realistic expectation, diversifying investments and committing to a long-term mindset can make a significant difference in overall outcomes.

Things to remember

Good investing is finding ways to pay yourself first through consistency and patience. Learning as you go also builds confidence. Visiting your local credit union, talking to a financial advisor, or exploring resources online can help build confidence. Even getting familiar with basic terminology or looking at how financial avenues and tools work can go a long way in making informed decisions.

It doesn’t matter your age or how much money you have, the most important thing to remember is to start.

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Andrew Lewis is a financial advisor with Osaic Institutions, Inc., in Fresno, located at Noble Credit Union. His career began over a decade ago in professional roles that vary from business development and high net worth account management to advisory roles and supervision in the financial services industry. He is currently a registered financial advisor at Osaic Institutions, Inc. and servicing the Fresno, Selma and Madera areas of California.