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Are You a New Investor? Keep These Personal Finance Tips in Mind

One of the most important ideas at the heart of successful investing involves the idea that everything you do needs to begin with a plan.

What, exactly, do you hope to accomplish? Where do you see yourself in a year? Five years? Ten years? How much can you afford to invest today, versus how much you'll be steadily ramping up over time? How much money can you afford to lose?

The answers to questions like these will help you put together a plan that makes sense for you, not for anyone else. As the old saying reminds us, "Rome wasn't built in a day." In this context, it means that you need to understand that you're looking at a potentially long journey ahead of you and the only way to make sure you arrive at your intended destination is to put a plan in place today that you can stick to.

While that is a crucial best practice for new investors to follow in particular, it is ultimately just one of many. If you're getting started in the world of investing and want to make sure that your journey gets off on the right foot, there are a number of important things to keep in mind.

It's Not About Tips or Speculation

One common issue that a lot of new investors in particular often run into involves the "romantic" aspect of it all. That is to say, they see in television or movies how an "overnight success" can be had simply by running into the right person at the right time. You know a friend, who knows a friend, who heard from a guy about a great investment tip that is sure to be the "next big thing."

Sometimes, these tips may legitimately pay off, often in small ways. But usually, they wind up doing a lot more harm than good.

The same is true of the idea of speculation. It's not about looking for the "next big thing" that just hasn't paid off quite yet. Don't go looking for only those investments that offer incredibly high returns, spreading your money around a myriad of them in the hopes that one pays off enough to cover any other losses you sustain. Investing isn't about finding the cure for cancer before anyone else, or about any other opportunity that sounds too good to be true.

It's about investing.

Don't speculate. Don't chase tips. Invest with an eye towards the future and if you follow that straightforward best practice and put it at the heart of the majority of the decisions that you're making, you truly cannot go wrong.

Understand How Much You're Investing

One of the more straightforward aspects of investing that a lot of new investors in particular don't think about until it's too late involves how much money they should be putting into this new enterprise of theirs. Obviously, the total amount of money you can conceivably spend will vary depending on your financial situation.

But as a rule of thumb, most people start out trying to invest as a way to begin saving for retirement. If they happen to make more than that, terrific - if they can accomplish even just that simple, realistic goal, it's all the better. As a result of that, you would want to invest roughly 10% to 15% of your income every single year.

Again, depending on your financial situation, that may sound like an unrealistic proposition in the short term. But as you build momentum, little by little, it does get easier.

Other people invest for more specific goals - like they're saving up to buy a house, or they want to take the vacation that they've always dreamed of. In that case, you would adjust your investment expectations accordingly. You wouldn't necessarily adjust your strategy, but you would still build a plan around whatever actionable goal you're trying to accomplish.

Time is Money

Investing your money is the key to unlocking its potential and building wealth. Otherwise, with time you risk losing purchasing power as prices rise faster than inflation due to the depreciation of your savings - leaving future payments worth less in today's terms.

Making the most of your finances requires understanding time's role in wealth. The concept of "time equals money" is popular for a reason: it can help you compare different investment and financial opportunities, guiding your decisions rather than ruling them out entirely. Harnessing this insight gives savvy savers an edge when looking to secure their future prosperity.

If you want to see how your money can grow based on your time horizon, check out this suite of financial calculators.

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Get to Know Prestige Accounting Services Group (previously Prestige Wealth Accounting Group)

Offices in Flemington, NJ and Califon, NJ

Our Mission: At Prestige Accounting Services Group (previously Prestige Wealth Accounting Group), we are on a mission to redefine the tax experience for individuals and small businesses. With a focus on personalized service, strategic planning, and expert guidance, we aim to empower our clients to succeed financially with confidence and ease.

Expertise in Action: With a wealth of experience and a team of dedicated professionals, we specialize in individual and small business tax preparation. While we excel in all areas of taxation, our passion lies in serving the unique needs of small business owners in New Jersey. We understand that small business taxation requires specialized knowledge and attention to detail, which is why we go above and beyond to ensure our clients receive the guidance and support they deserve.

Tailored Solutions for Every Client: Whether you're a high-net-worth individual seeking comprehensive tax planning or a small business owner in need of accounting and bookkeeping assistance, we have the expertise to meet your needs. Our team takes the time to understand your specific situation and develop customized solutions that align with your goals and objectives.

Why Choose Us?: What sets us apart from other New Jersey tax firms is our commitment to excellence and innovation in the field of taxation. We don't just prepare tax returns; we provide strategic insights, proactive planning, and actionable advice to help our clients achieve their financial goals. With a team of two CPAs, an EA, and an ERO, we have the expertise and resources to deliver exceptional service and results.

Your Success is Our Priority: At Prestige Accounting Services Group (previously Prestige Wealth Accounting Group), we measure our success by the success of our clients. We are dedicated to building long-lasting relationships, providing unparalleled service, and helping our clients thrive in today's ever-changing tax landscape.

We can't wait for you to experience the Prestige Accounting Services Group (previously Prestige Wealth Accounting Group) difference.

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