Am I Ready to Invest in the Stock Market? Part 1

Well....Are you?
Typically you want to have the rest of your finances in order prior to investing in individual stocks on the stock market. As part of the Share Repurchase Newsletter strategy you would buy and hold a stock for 2.5 years. So if you need to access money you are using to purchase stock based on this strategy, you may need to get other aspects of your finances in order before subscribing.
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Creating a Budget and an Emergency Fund
3 to 6 Months of savings to cover your current/expected expenses in case of loss of income (job loss, business failure, medical issue,etc...). This will take the longest of any steps in your financial walk if you are starting from scratch. If you already contribute to a savings account consistently, then you're well on your way. Creating a budget will not only get you there faster, but will give you insight on your financial health. Are you over spending? Have too much debt? Well once you have your budget setup, you will know all of these things. 

The first step to making a change is determining what changes are necessary, implementing them, and sticking with them! If you're going to accumulate 3-6 months of savings to match your expenses in case of emergency, it will take you at least 3-6 months to complete. This may take even longer depending on your income and expenses.

So either decrease your spending (fastest way) or find ways to increase your income to speed up the process. There are many good apps you can use like Mint and Personal Capital to help you with viewing all of your finances in one place, as well as creating budgets. Good ole' pen and paper will do as well! A good way to make sure you don't dip into your emergency funds, for non emergencies, is to separate your actual "savings" from your checking account. I personally prefer to have the funds in a separate bank account entirely, without a debit card linked to the account!

It takes an extra 2-3 business days to transfer the funds from my separated bank account, to the checking account I use daily. Not to mention that it's an online bank that does not have local branches, so you can't just drive around the corner to an ATM. This will make you think twice (and plan!) before dipping into the account for whatever reason. Works for me at least! In addition to this, banks with online only access typically provide a higher savings rate than your major national banks. 

You can check out sites like NerdWallet and  BankRate to find online or local banks with the best savings account rate. Don't forget to check local banks or credit unions you are familiar with in your area, as they may not appear on the sites mentioned above. You are your best resource in finding what works best for you... and Google isn't a bad backup. 

On our next post Am I Ready to Invest in the Stock Market? Part Two, we will get into 401K's and IRA's! Which one you should contribute to first, and why.

What apps, websites, or old fashioned tools do you use to help with your budgeting and personal finance goals? Leave a comment with your favorite tools, as well as banks which have the best savings rates in your area, or just to say hello! You can also subscribe to the Blog separately from the Newsletter if you are not a current member, this way you can receive updates when new blog posts are made available. Also follow us on Twitter for the latest updates on the Blog, Share Repurchase announcements, and other news related to Personal Finance.

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