Investing for Beginners: The Basics

The basics of how to invest your money.

Investing doesn’t have to be complicated. Here are the basics of investing for beginners.

Often, people will put off investing their money because it seems too complex or think that it requires a large starting sum. But this doesn’t have to be the case. Here’s a basic guide for those who are new to investing—and it doesn’t require a large bankroll.

Determine your investment strategy
Are you investing for a long-term goal, such as retirement, or for something a little closer, like buying your first home? Are you ok with making riskier investments, which can yield greater returns, or does the thought of a market slip give you the cold sweats? Do you want to be actively involved in managing your investments or would you prefer a more passive role? The answers to these questions will help determine if you should invest in stocks, mutual funds, or bonds—and if you should hire a fund manager or broker, or go it on your own.

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Featured Community: Lake Eola Heights, Orlando, FL

The Lake Eola Heights Historic Neighborhood Association, (LEHHNA), was formed in the mid 1980's by a group of residents who wanted to rescue homes from demolition and preserve the original residential character of the area.

In the 80's, private restoration of buildings had already begun and the "turn around" was under way. The City designated the neighborhood as The Lake Eola Heights Historic District in 1989. With input from the residents, this ordinance was instrumental in identifying and protecting the homes and buildings.

The City and State provided and continues to offer several programs and incentives to encourage preservation and restoration of homes and buildings, (ad valorum tax deferral). In 1991, Lake Eola Heights became the first residential historic district in Orlando to be placed on the National Register of Historic Places. The neighborhood was also the recipient of the 1998 Florida Trust Neighborhood Award.

LEHHNA continues to be pro-active in the support of preservation and compatible new development.

In addition, LEHHNA works aggressively with The City on traffic abatement and was the first Orlando neighborhood to install roundabouts.

Read More About: Lake Eola Heights in Orlando, FL

Retirement Savings: What is a Roth IRA?

Roth Ira
Is a Roth IRA conversion right for you?

The IRA rules around income limitations for converting Traditional IRA money to a Roth IRA have changed. Learn more about the Roth IRA conversion changes and how they might benefit your retirement savings.

When funding your retirement savings, it’s a good idea to diversify, using the various retirement investment options available to you. And now, those with high incomes are able to take advantage of the benefits of a Roth IRA, thanks to changing income rules around converting money from a Traditional IRA to a Roth IRA.

What is the difference between a Traditional IRA and a Roth IRA?
The most basic difference between these two individual retirement accounts has to do with when you pay taxes. With a Traditional IRA, money you contribute may be tax-free while money you withdraw in retirement is taxed. A Roth IRA is the opposite—money you contribute is after tax and money you withdraw in retirement is tax-free. This, along with other differences, can make it valuable to have both of these retirement savings accounts as part of your overall retirement plan.

Read More About: Is A Roth IRA Conversion Right For You?

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Retirement Savings: What Is A 401K

What is a 401K?

How does a 401(k) work? What are the benefits of having a 401(k) plan? Learn more about the 401(k) to see if it should be a part of your retirement plan.

Of all the various retirement investment options available to workers, the 401(k) is probably the most well-known. The 401(k) plan, named for the section of the Internal Revenue Code which authorized the use of the plan in 1978, is a retirement plan offered through an employer.

These plans gained popularity among employers in the 1980s as an alternative to pensions and are equally popular with employees thanks to their portability, employer matching contributions, and increased control over how money is invested.

How Does a 401K Work?
Contributions are automatically deducted—before tax—from an employee’s paycheck, which makes it one of the easiest ways to increase your retirement savings. Employees select the percentage of pay they want deducted from each paycheck and funds are automatically deposited into the employee’s 401(k) plan. Account holders are able to choose from a range of investment options within the 401(k), which are composed of stocks, bonds, and money market investments.

Read More about: What is a 401K?

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Retirement Savings:What Is an IRA?

What is an IRA?

How does an IRA retirement plan work? What are the benefits of having an IRA? Learn more about IRAs to see if it should be a part of your retirement savings.

So you’ve got a 401(k) through your workplace and are actively contributing. Good for you! But when saving for retirement, it’s a good idea to take advantage of additional retirement investment options as well. Another way to boost your retirement savings is to open an IRA, or Individual Retirement Account.
How does an IRA retirement plan work?

Unlike a 401(k) plan, which you may be able to open through your employer, an IRA is a retirement plan that you open on your own through any large financial institution. Typically, IRA providers offer a broad range of investment options—including mutual funds, stocks and bonds—so you can diversify your retirement portfolio to best suit your needs.

Like a 401(k) plan, dollars can be invested either through a Traditional or Roth plan. The biggest difference between the two has to do with when your investments are taxed. With a Traditional IRA, you pay taxes when you withdraw your funds in retirement. (However, in some cases, your contributions might be tax free.) The Roth IRA is the opposite—contributions are made with after-tax dollars but withdrawals made in retirement are tax-free. For both plans, you can begin making qualified distributions at age 59½. (With a Roth you must also have had the account for five years.)

Read More About: What Is An IRA?

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