Am I Ready to Invest?

Investing is a powerful tool for building long-term wealth — but if you’ve never done it before, it can feel overwhelming. When money is tight, the idea of putting your hard-earned dollars into something that might go up or down can be scary.

You're not alone in feeling that way. Many first-time investors worry about taking the plunge, especially without a financial safety net. The good news? By putting a few foundational pieces in place first, you can start investing with confidence.

These steps won’t just help you feel more prepared — they’ll actually protect your investments and make it more likely you’ll stick with them over time.

• Build your emergency savings. Life happens — layoffs, medical emergencies, accidents. Ideally, you’ll want to have enough savings to cover at least six months of living expenses in an easily accessible account.
  
  Without a financial cushion, you might have to dip into your investments during a downturn — potentially locking in losses and missing out on long-term growth. Your emergency fund acts as a safety net, keeping you in control of your investments no matter what life throws your way.
  
  

• Pay down your high-interest debt. Before you put your money into the market, take a look at your debt. Are you carrying credit card balances or other loans with high interest rates? If so, it’s smart to prioritize paying those down first. Interest rates on high-interest debt often outweigh potential investment gains, making it a costly burden that can spiral out of control.
  
  For example, if your credit card has a 25% interest rate and your investments earn an average of 8% per year, you’re losing money in the long run by not paying off the debt first. Prioritizing debt repayment frees up more of your income in the future and puts you in a stronger position to invest.
  
  

• Get comfortable with risk. Investing always comes with some level of risk. Even the most diversified portfolio isn’t a sure thing. With a long-term mindset, however, you can ride out market fluctuations and take advantage of compounding growth.
  
  The key is understanding your risk tolerance — how much market fluctuation you can handle without panicking. If you’re unsure where to start, there are investment platforms that can assess your risk tolerance by asking a few simple questions. Based on your answers, they’ll recommend a mix of assets that match your comfort level and even adjust your portfolio automatically over time. This can be a great option for first-time investors who want a hands-off approach while still staying on track with their financial goals.

Once you’ve built a savings safety net, paid off your high-interest debt, and gotten comfortable with the risk, you’re ready to start your investing journey.

Maybe you’re not ready to invest today, but every step you take — saving, paying down debt, and understanding risk — gets you closer. Building wealth is a journey, and when the time is right, you’ll be ready to invest with confidence.

WorkMoney Tip: If you’re not sure where to begin, platforms like Stackwell can help. Stackwell simplifies investing by assessing your risk tolerance and automatically managing your portfolio based on your goals. It takes the guesswork out of investing, so you can start building wealth with confidence.

Stackwell is an SEC-registered investment adviser. Investing involves risk and your investments may lose value. Stackwell does not guarantee investment performance or future results. Educations materials and financial knowledge and confidence, but they do not replace personalized financial advice. For questions about Stackwell’s products and services, please visit stackwellcapital.com, review our FAQs, or contact us at support@stackwellcapital.com.

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