Questions to ask yourself before Investing (Beginners)

When should I start?
You should begin investing as early as possible due to the powerful effect of compound interest (Min. age 18). Losing even one year of market participation can lead to drastically different account values in the end. Not only does starting later decrease the effect of compound interest on your account value but, starting late also nearly guarantees you are going to be further behind others who began investing before you. Not only in terms of your net worth but, things such as your retirement account value and the age that you will able to retire will be pushed back or the amount of money you will be living on will be decreased. However, you should never invest money that you will need in a short time period or money you will be needing for a non negotiable expense you have coming up. The simplest way to think about this is to ask yourself; Can I afford to lose this money? 

How much can I afford to invest?

One question to ask yourself before you start investing is: How much can I afford to invest? This question is important for numerous reasons. One reason you should always consider this question when starting out is due to having more and more opportunities available to you as your initial investment amount increases. For example, you could put $100 dollars into a Robinhood account and receive a free share of a random stock by using a referral link. Your 1 free share can range in value from $5-$500 dollars.  You could even receive your 1 free share with an initial investment of $5 dollars. However, you wouldn't be able to invest in a crowdfund real estate platform such as Fundrise, until you reach a minimum investment of $500 dollars. 

What are my goals?
Another thing you should consider when starting out is what do you wish to achieve with "said investment?" Do you plan to hold this investment until retirement? Do you just want to hold it until your account value becomes high enough for a downpayment on a new house? Considering your timeline for the investment as well as your main goal will help to prevent panic selling in times of market Volatility, help to prevent selling when you "need the money", and ultimately allow you to make the most money from your investment possible in your particular situation.