Guest Blogger Nicole (znic123)

I’m a mid 20’s designer living in New York and I want to own my own home in the foreseeable future.

When I started this process I didn’t know anything about investing or goals.  I just wanted to own my own place.

It’s not that I wasn’t interested in money and investing while growing up, it simply never occurred to me. I thought, get into a good college, get a good education and get a good job, start your life and save your money. While I still think this is a good way to approach your independence, once you get there, that’s when you start dreaming bigger and then that’s when reality sets in and you realize there is much more of an art to it (investing and goal setting) than just saving  your money and taking out a loan when you want to buy a car or a house.

Because of this I don’t feel particularly confident about investment decisions and my concerns seem to outweigh the potential. What are my options? Where do I go? Who can you trust? Why should you trust them? The market is risky, can I afford the risk? Stocks and bonds, futures and options, mutual funds….what’s the difference? I am in my twenties with a small amount of money to invest, will I even be taken seriously? All of this was holding me back.

I admit that these insecurities subside once you start educating yourself, but for me the anxiety will never completely disappear and I will never completely “get it”. I don’t even know what I don’t know (or what I do know). I have taken it upon myself to approach this in a more collaborative way—talking with people who can explain some concepts I’d heard often but never fully understood.

Actively engaging in financial education or asking for advice is priceless in this process. I’m now beginning to know the importance of investing in order to reach my goals as quickly as possible. Sure, I could save my money, put it away in a plain vanilla savings account and eventually reach my goal, maybe?, any maybe never because rates are so low. That’s where understanding investment risk comes into it.  Obviously, there’s more risk with investments than savings accounts. But with the savings account I risk never reaching my goal.  So I’ve learned that before I make investment decisions, I need to work out the math between my goals and cash flow.  Once I do that then I need to understand things like asset allocation and diversification.  Only then can I make smarter decisions.

I’ll talk more about this in my future posts.

So tune in and watch me as I become money savvy.