Investing into the stock market for the first time is no simple task. There are many aspects that you may not understand as a first time investor, and while it’s smart to invest it can also put you into financial trouble if you’re not smart about it. As you invest more and more, you’ll likely begin to understand how the market works and where you should or shouldn’t invest but in order to actually get to that point you’ll have to start investing. If you mess up early on in the game, you may be deterred from ever investing again. Here are a few tips to help out first time investors.

Forget About “Getting Rich Quick”

Most people choose to get into investing because they believe it’s a quick and easy to to gain a lot of money. It’s important to avoid having this mindset. By thinking like this, you’ll likely do the opposite and lose a bunch of your hard earned money extremely quickly. Be sure to take a long term approach when you begin investing, as your best yields will come from investing in the market and letting your investment grow slowly over time. The mentality “too good to be true” is very common in investing, so be careful and take your time.

Plan Out Goals

Like almost anything in life, it’s important to have clear cut goals when you begin investing. What are you getting into investing for? Are you planning for retirement? Do you want to look for passive income? Knowing what your goals are will allow you to figure out what the best approach is with your investing habits, such as being aggressive or conservative with your money. It’s also important to remember that as life goes on, these goals may change depending on how your situation changes and that re-evaluating is always okay.

Understand Fees

What many first time investors seem to not realize is that when you invest your money, there’s typically a fee involved and that fee can be quite high and can even eat into the gains you make. It’s important to be on the lookout for low-cost index funds or ETFs as they can be much more efficient than the mutual funds that have 1-3% fees on them. While those fees might not sound large, they add up over time and can eat up a lot of the money you’d otherwise be making.