It is not an easy task managing money. After all, the education system in many ways neglects to teach children early on how to be smart with money. Unless you graduated college with a business, economics, or accounting degree, money may still be something you are uncertain about. My goal is to provide some quick options for you to consider. Investing is the greatest tool at your disposal that can help build wealth and financial stability. Responsible money management early on in life will carry forward for years to come. I believe every Marine Officer must be competent when it comes to finances. Not simply because it will benefit themselves, but more so the Marines under their guidance.
Owning a share of stock represents a proportional share of ownership in a company. The price of a stock changes depending on the value of the company. Companies with huge growth potential are more likely to have an increase in stock price. Other companies with less growth potential will pay out a dividend. In those cases, you will receive a portion of the companies earnings based on how much stock you own. Historically, stocks have had the most upside compared to other investments. I personally favor stock investments over mutual funds, bonds, CDs, etc. However, it is important to weigh in your ability to manage stocks. For instance, if you aren’t going to be able to watch the market for weeks at a time then stocks may not be the best option. It doesn’t take a huge amount of time to manage stocks, but at least a few hours a week is going to be necessary.
Buying into a mutual fund is similar to owning stocks. The main difference is the fund manager will be choosing what stocks to buy and sell. Essentially, you are throwing your money into a pool that the managers can use to invest. If the mutual fund does well you will be rewarded, if not you are out of luck. I’m not a huge fan of mutual funds because there are many managers that underperform the market indexes. If the fund doesn’t do well the money you invested is lost, but the money managers are still profiting off of the commissions you pay them. If this is the vehicle you choose to put your money in, I suggest doing research just as would do for stocks. Make sure the fund handling your money is reliable and has a proven track record of making investors money.
Exchange-Traded Funds (ETFs)
An ETF is a fund that trades similarly to stocks. These vehicles for investing may contains hundreds, or even thousands of companies, commodities, or bonds that are unified by a specific theme. For instance, one may choose to buy in ETF that tracks companies in the solar energy industry, or perhaps 3D printing companies. There is an ETF for just about anything (bonds, countries, market sectors, etc.). There are definitely various pros and cons to investing an ETFs. If you are interested I would suggest learning all you can and researching extensively.
I truly believe that it is critical for Marine Officers to teach financial responsibility to their Marines. There are dozens of ways to invest money. The important things to remember is to always do plenty of research beforehand. It was not easy earning the money you have saved up so don’t give it up too hastily.