Investing might feel like a world reserved for financial experts, but the truth is that starting early can make a big difference in building wealth over time. For young adults, learning the basics of investing is an essential step toward financial independence and security. At Piscataqua Savings Bank, we’re here to break down investing into simple, easy-to-understand terms and provide practical tips for getting started.
A is for Assets: Stocks, Bonds, and Mutual Funds
When people talk about investing, they often mention stocks, bonds, and mutual funds. Here’s a quick guide:
- Stocks: When you buy a stock, you own a tiny piece of a company. If the company grows, your stock’s value may go up. Stocks can be exciting because they often have higher growth potential, but they can also be riskier.
- Bonds: Buying a bond is basically like lending money to a company or government. In return, they pay you back with interest. Bonds are generally steadier and less risky than stocks.
- Mutual Funds: These are like team investments. Your money joins with other investors’ money, and together it’s used to buy a mix of stocks and bonds. It’s a built-in way to spread out risk and still aim for growth.
Think of these three as the starter tools in your investment toolbox. You don’t need to know every detail right away, just knowing they exist gives you a strong starting point.
B is for Budgeting Before Investing
Before you start investing, it’s important to have a budget and an emergency savings fund. Young adults often underestimate the power of having a financial cushion.
By setting aside money for living expenses, short-term goals, and unexpected costs, you can invest with confidence, knowing that your essentials are covered.
C is for Compounding: The Magic of Time
Here’s where young adults have a huge advantage: time. Compounding is when your money earns interest or profits, and then those profits start earning more on their own. The earlier you start, the more time your money has to grow.
Even small amounts, say $25 or $50 a month, can add up in a big way over time. The earlier you start investing, the more you benefit from compounding, a key reason why it’s never too early to get started.
How to Start Investing (Without Getting Overwhelmed)
- Set clear goals: Are you saving for a home, retirement, or a future adventure? Knowing your goals helps determine your investment strategy.
- Start small: You don’t need thousands of dollars to begin. Regular, small contributions can grow over time. Consider setting up automatic contributions to your investment account.
- Learn as you go: Read articles, watch videos, and ask questions. The more you know, the more confident you’ll feel.
- Mix it up: Don’t put all your eggs in one basket. A mix of stocks, bonds, and other investments can reduce risk.
Where Piscataqua Savings Bank Can Help
While investing can seem overwhelming at first, you don’t have to navigate it alone. Our Trust & Investments Department is here to provide personalized guidance, answer questions, and help you make smart choices with your money. Whether you’re just starting out or looking ahead to bigger goals, our team can help create a plan that fits your life.
And for the youngest members of the family, our Kids’ Bank makes learning about money fun. It’s a hands-on way for children and teens to practice saving, understand the basics of finance, and get excited about building their own financial future.
Your Future Starts Now
Investing isn’t about being perfect or knowing everything, it’s about taking small, consistent steps that pay off over time. By understanding the basics, setting goals, and taking advantage of compounding, you can build a strong foundation for your future.
Whether you’re just starting your first job or planning for the next big milestone, Piscataqua Savings Bank is here to guide you every step of the way through expert investment advice, personalized wealth management, and fun, educational programs for the next generation of savers.
The best time to start investing is today, your future self will thank you.
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