Money is a major source of anxiety for a lot of us—even those of us with pretty good incomes. About 65% of middle-class families report that they’re struggling financially.
Investing can be one way to get more power out of your dollar. The potential rewards of investing may be higher than simply saving money, since you may be able to grow your wealth faster. That said, investing also comes with risk. If you’ve never dived into investing before, you may feel unsure where to begin learning about the right strategy for you, or question whether you’re ready to invest at all.
You don’t need to be an expert to start investing. Reviewing your goals and choosing an investment strategy might be your first steps if you’d like to test the waters.
Investing can help you reach your financial goals in several ways and can be much more effective than relying on savings alone.
Most of the time, when we talk about “saving” for retirement or putting money into “college savings,” we’re actually talking about investment accounts. Retirement accounts like 401(k) plans, 403(b) plans or IRAs work by investing your contributions. A 529 plan or Uniform Gifts to Minors Act (UGMA) account are even more options for investing, generally on behalf of your kids or dependents. While you can opt to save purely by keeping money in the bank, you are likely to miss out on important tax advantages and growth potential if you do that.
A small, steady amount of inflation may be a good thing in a healthy economy because it’s an indicator of economic growth. But in terms of personal finance, it means your dollars have less purchasing power over time.
As of July 2025, the average bank savings account interest rate was 0.58%. This is not enough to keep up with most historical inflation rates. Although the stock market fluctuates, the historical trend is an annual return of around 10%. That suggests following a sound investment strategy may help you stay ahead of inflation long-term.
By investing some of your money, you open up the potential to grow your investment more than you could if you just popped those funds into a savings account. You can also reinvest your returns to get further growth, meaning you gain earnings on your earnings. This compounding growth may help you reach your financial goals faster, or reach targets that would probably be very difficult to hit through income from your job alone.
Your readiness for investing depends on multiple factors. Your current finances, priorities, risk preferences and knowledge about investing can all impact what feels right for you.
If you’ve never invested before, you might be attracted to investing approaches that help you balance your risks, or simply entrust your money to a professional. Here are just a few examples:
Retirement accounts through an employer, such as a 401(k), may come with a company match, essentially giving you extra money toward retirement. If you’re looking for additional ways to build a retirement fund, consider an individual retirement account (IRA). An IRA may offer a wider range of investments than your employer’s plan.
If you aren’t sure how to choose your own investments, you can always hire a trusted financial advisor that can assist you in building an investment portfolio. Of course, you’ll always want to vet these individuals to make sure you’re working with someone you trust.
The stock market fluctuates, so almost any investment will go through times of gains and losses. A common investing mistake is to get nervous about losses and sell too early, rather than waiting for the market to recover, which could lead to the investor potentially missing out on market increases. A buy and hold strategy is built on patience over time, trusting that the long- term result of keeping your investment in the market for years or even decades will potentially lead to gains.
“Buy low, sell high” is common advice that’s at once straightforward and surprisingly challenging to follow. It can be difficult to spot when a low price means amazing growth potential, or a company on its way to failure. Similarly, the question of when “high” is high enough to sell can be confusing. Finding the top or bottom of a market is even hard for professional investors, too.
Dollar-cost averaging works by investing on a schedule—so sometimes you’re investing when the price is low, and other times when it’s higher. This strategy helps average the price of your investment overall and can help counter the rise and fall of the market. Dollar cost averaging does not ensure a profit and doesn’t protect against a loss in declining markets.
You may be interested in more active approaches to investing. For example, you might choose your own mutual funds or exchange-traded funds (ETFs) and set your target allocation for yourself. Working with a financial advisor can be one way to set up a well-balanced investment structure. You might prefer to continue the plan on your own after that, or check in with a professional occasionally.
Some investors are interested in trying their hand at playing the market or choosing individual stocks. Some people look for companies they believe are undervalued or seek out those with innovative offerings that may grow faster than the market average. Investors may follow particular industries or keep up with developments in certain parts of the world to spot potential investment opportunities. While these strategies can be viable, it’s also worth noting that more than 90% of the time, stock-pickers lag behind the market in the long run. Some experts recommend a more hands-off approach through index investing instead of trying to juggle individual stocks yourself.
Generally, investments offering higher-than-average potential growth often come with extra risk, as well. Your risk tolerance and interest in keeping up with the company and its surrounding industry may be important factors in whether some of these strategies feel like good options for you.
Thinking about saving for college, or contributing to your kids’ future? Minors can’t open their own investment accounts, but you can open a custodial account on your child’s behalf. A UGMA is one example of a custodial account, and it can be quicker and simpler to open than a trust. Any funds in the account belong to the child, and the adult managing the account has a fiduciary responsibility to manage the money in the child’s best interest until they come of age.
One significant benefit of investing for your children is time. Kids may have well over a decade before they’ll need the money you’re socking away, meaning lots of opportunity for their investments and earnings to grow. When you start early, even small actions you repeat consistently over time can turn into a meaningful resource for your children by the time they hit adulthood.
You don’t have to be ready to throw yourself headlong into monitoring stock performance to consider yourself “ready” to invest in some capacity. You can start investing a little at a time, at a risk level that feels reasonable to you. Over time, you may feel more confident to grow and adapt your strategy to suit your goals.
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Information provided is general and educational in nature, is not financial advice, and all products or services discussed may not be offered by Fabric by Gerber Life (“the Company”). The information is not intended to be, and should not be construed as, legal or tax advice. The Company does not provide legal or tax advice. Consult an attorney or tax advisor regarding your specific legal or tax situation. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. The Company makes no warranties with regard to the information or results obtained by its use. The Company disclaims any liability arising out of your use of, or reliance on, the information. The views and opinions of third-party content providers are solely those of the author and not Fabric by Gerber Life.
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