Invest Like a Boss: Smart Strategies for M.others in 2024

The financial landscape is constantly evolving, and for m.others, 2024 presents exciting opportunities to build wealth and secure futures. Maybe you’re in a position to invest now, or perhaps you’re waiting until after the kids are out of their expensive private pre-school. Regardless of your current state, it’s a great idea to explore various avenues to invest your money.

Building a Strong Foundation

Solidify Your Financial Goals. Dr. Christine Benz, Director of Personal Finance for Morningstar Investment Management, emphasizes the importance of setting clear goals. In Morningstar Investment Management she states, "Do you aim for retirement, a child's education, or a dream vacation? Knowing your 'why' will guide your investment choices".

Emergency Fund First! Before diving into investments, ensure a safety net. Financial expert Jean Chatzky, author and financial expert, recommends an emergency fund covering 3-6 months of living expenses. This provides peace of mind and prevents selling investments during market downturns.

Traditional Investment Strategies

Retirement Planning is Crucial

Before investing in other forms, max out contributions to employer-sponsored retirement plans like 401(k)s. Maxing out your employer-sponsored 401(k) offers a powerful punch for your retirement savings account. First, you'll benefit from tax-advantaged contributions. This lowers your taxable income for the year, potentially putting you in a lower tax bracket. Secondly, many employers offer a matching contribution, essentially giving you free money on top of your own contributions. This extra boost, compounded over time, can significantly accelerate your retirement nest egg. After this is done, consider Individual Retirement Accounts (IRAs) for additional savings.

Diversification is Key

Economist Laura Jones from American University stresses diversification. "Spreading your investments across asset classes like stocks, bonds, and real estate reduces risk and offers long-term growth potential," she explains. Mutual funds are a great go-to as they provide instant diversification, allowing you to own a basket of stocks or bonds with a single investment, reducing risk compared to picking individual companies. Mutual funds also come with professional management meaning experienced fund managers handle the buying and selling within the fund, saving you time and research. Mutual funds often enable automatic reinvestment of dividends and capital gains, accelerating your wealth growth over time. You can check out companies such as Vanguard and Fidelity for options.

Exploring New Horizons

Once you’ve taken the necessary steps to make investments you can become an Impact Investor. An impact investor is someone who makes investments with the purpose of generating a positive social or environmental impact alongside a financial return. These investors are looking to put their money to work in a way that benefits both their wallet and the world.

Impact Investors may be interested in companies developing renewable energy solutions or creating educational opportunities in underprivileged communities. From environmental sustainability, social justice, or gender equality, you can support companies focused on what aligns with your values through impact investing funds.

You can also consider venturing into alternative assets like real estate investment trusts (REITs) or peer-to-peer lending platforms for potentially higher returns, while acknowledging the increased risk profile. Real estate offers several advantages for m.other investors. It can provide a steady stream of passive income through rent, a hedge against inflation as property values tend to rise over time, and potential for significant capital gains when selling the property. Remember, in 1974, the Equal Credit Opportunity Act (ECOA) was passed, which finally allowed women the ability to open bank accounts, apply for credit, and commit to mortgages without a male co-signer. Before the ECOA, financial institutions could technically refuse loans to unmarried women or require them to have a male co-signer.

Investing in Yourself

Knowledge is power. Enroll in online courses, attend investment workshops, or seek guidance from a financial advisor to build confidence in your investment decisions.

Invest in Your Network by connecting with other m.other investors through online communities or local events. Share experiences, learn from each other, and build a support system.

Remember, investing is for the long-term and is a marathon, not a sprint. Stay disciplined and don't panic-sell during market fluctuations. It’s also important to assess your comfort level with risk. Aggressive investors may seek higher returns with potentially greater volatility, while conservative investors may prioritize stability.