Early education and educators teach grade school students about finance at an early age in mathematics to learn the differences between needs and wants. When they become young millennials, most of them know about saving, but little knowledge about how to increase their saved cash.
If you are letting your money control you, it is time for self-discipline and to expand your investment and financial knowledge. For first-time investors, it is wise to plan for the future by making smarter decisions in spending, enabling you to consider how to become an accredited investor someday.
Requirements to Qualify As an Accredited Investor
SEC (Securities Exchange Commission) set forth the standards for investors to qualify as an accredited investor, as described in the 1933 Securities Act, Rule 501: Regulation D. Millennials who are entrepreneurs and plan to raise funds will need to register their accredited investors. If you have over $200,000 in earned income for two consecutive years out of a three-year period, you meet one of the SEC requirements. Married millennials must have a joint income of over $300,000.
Another requirement to qualify as an accredited investor is to have a net worth of over $1 million. This rule applies to individuals and married couples. SEC disqualifies the inclusion of real estate properties used as assets for primary residences in the net worth total. Learn more information about SEC compliance and regulations for investors and publicly traded companies in the trading markets on the Securities Exchange Commission website.
Why Create Financial and Investment Plans?
Amid the COVID-19 pandemic in 2020, more young people explored the securities and cryptocurrency markets, but some lost money considerably. One reason is because of misinformed advice and lack of experience, primarily. Financial planning is the beginning of you taking control of your money by setting realistic goals and creating ways to save and live within your means financially.
First, identify your saving goals and develop an investment portfolio with resources to build wealth. Most advanced investors learn the importance of diversifying their portfolios to minimize risks and to protect their assets. They include different investment options and instruments, such as bonds, precious metals, commodities, currencies, mutual funds, and equities.
Benefits of Financial and Investment Planning
- Provide financial freedom and the ability to secure your family’s short-term and long-term goals financially
- Useful as guides to keep track of your spending and generating income to help manage your earned money more wisely and efficiently
- Render insight and understanding of your goals and objectives and how to reach the desired goal
The best benefit of all is gaining control of your life, including your finances. You will need to set up various accounts with a bank, credit union, and/or an investment brokerage company or firm. If you earn additional income to save, stock investments may be the solution. Investors purchase stocks to earn a considerable profit. Some of them may sell shares quickly after they reach a determined amount of gain from a stock to place in a college fund or invest in real estate properties for ongoing revenue.
Three Tips That Can Help You Save for Future Investments
1. Reduce Your Spending and Eliminate Unnecessary Expenses
Review your expenses and select those that are wants and eliminate them from your spending list. The money you spend daily and weekly on wants can go into a savings account for you to build enough capital for investment. Once you save enough money for emergencies and investing, it is time to find a brokerage firm or broker to select securities for investments. You no longer have to live from paycheck to paycheck.
2. Join Your Employer’s Retirement Program
If you work for a company that offers a retirement plan, such as a 401K, join the program. You can decide how much money your employer can deduct from your paychecks during each payment period. Some employers match their employees’ contributions, starting at 50% up to 100%.
3. Educate Yourself
While you are saving, educate yourself using SEC and other reliable online sources to learn the risks involved and to protect you from financial losses. Investments and emotions do not mix well together; therefore, you need to adapt to self-discipline that will enable you to gain control of your finances. Start by creating a financial plan and an investment plan to build wealth for financial freedom.
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