What is a mutual fund and how is it different from buying stocks?
Everyone says a beginner should buy mutual funds instead of individual stocks but I don't really understand the difference. Is a mutual fund just a bundle of stocks? Who picks what's in it? Why is it less risky? How do I actually buy one and how much money do I need to start?
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My parents told me the same thing and they were right. But everyone's situation is different. Run the numbers for your specific situation before making a decision. There are good calculators online that account for all the variables.
4 Answers
My parents told me the same thing and they were right. But everyone's situation is different. Run the numbers for your specific situation before making a decision. There are good calculators online that account for all the variables.
Get a free copy of your credit report once a year from annualcreditreport.com — the real free one, not those 'free' sites with monthly fees. Check it for errors. Mistakes on credit reports are way more common than people realize.
The biggest financial mistake I see people make is not having an emergency fund. Before investing, before paying extra on debt, save 3-6 months of expenses in a savings account. This protects you from going into debt when unexpected things happen.
I'd talk to a few different banks and credit unions, not just the first one. Rates and fees vary a lot. Credit unions especially tend to have better rates than big banks because they're nonprofit and member-owned. Always shop around.
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