Smart investing doesn’t come naturally to anyone. It takes time to learn how to invest your hard-earned dollars wisely.
As a nurse, you might not have the time to learn investment strategies.
You could pay a financial advisor or follow some of these easy tips to get started.
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Investing Tips For Nurses
The following investing tips work well for nurses who are short on time and want to make the most of the money they are earning.
These tips are not exhaustive, but they will provide a firm foundation for a lucrative savings plan.
Find a Finacial Planner!
Saving and investing for the future can be very difficult, not to mention complicated. If you don’t want to deal with it, you need to hire a financial advisor you can trust to help guide you on the journey.
1. Sign Up for an Employee-Sponsored Retirement Plan
Most nurses work for employers that offer some retirement plan.
At a minimum, you should sign up for this plan and contribute the maximum you can afford.
Many hospitals offer 401k matching contributions up to a specific dollar amount or, more often, as a percentage of your salary.
Make sure you take full advantage of this perk.
You should also take the time to understand your options. If you can choose your plan, pick the one that offers the highest reward with the lowest risk.
Also, remember even employer-sponsored plans may have fees. If possible, determine the provider with the lowest fee before you begin investing.
2. Invest as Much as You Can in an IRA
Depending on the type of IRA you choose, it’s either tax-exempt or tax-deferred.
Basically, that means you either invest with taxed income or you pay taxes on the IRA withdrawals.
As of 2022, individuals can invest up to $6,000 in an IRA each year. That amount may increase along with the cost of living.
Investing in an IRA is a wise choice because, unlike an employer-sponsored plan, you have full control over who you invest with and the type of IRA plan you prefer.
You can also begin withdrawing from a traditional IRA without penalties when you reach age 59 and 1/2. This is not true with other types of retirement investments.
3. Look for Credit Cards With Investment Rewards
Credit card companies offer a lot of perks to entice you to use their services.
One of my credit cards places $50 in my attached investment account for every $2,500 I spend.
My rule of thumb is that I use that card for almost all of my purchases, which gives me a nice, tidy sum by the end of the year. However, you must remember to spend wisely.
Never put more on your credit card than you can pay off at the end of each month. Otherwise, the perks you receive will be eliminated by your owed interest.
4. Put Extra Cash in Interest-Earning Accounts
Most nurses are paid through direct deposit into their checking account. If you’re like me, you’re already a devoted customer of your bank.
I know my bank, I love my bank, and I don’t want to change banks after using the same one for more than 20 years.
However, you should consult your bank about interest-earning checking accounts, money market accounts, or savings accounts.
As long as they don’t charge extra fees, you could have your salary deposited into an account that lets your money work for you.
While the average interest rate on a savings account is less than one percent, that’s still better than the zero your money earns by sitting in a traditional checking account.
Find a Finacial Planner!
Saving and investing for the future can be very difficult, not to mention complicated. If you don’t want to deal with it, you need to hire a financial advisor you can trust to help guide you on the journey.
5. Consider Long-Term Investments and Buy-and-Hold Stocks
Retirement plans are not the only investments that can help you in the future.
You should certainly start your future planning by taking advantage of IRAs and employer-sponsored retirement plans.
However, you might want long-term savings that you can tap without penalties if needed. This is where long-term investment strategies come into play.
Think about your long-term goals and set a dollar amount for what you want to achieve.
One of the best ways to do this is with what is commonly referred to as a buy-and-hold stock.
While any stock that you choose to hold onto for a long time is technically a buy-and-hold, the term usually refers to tried-and-true stocks from companies that have been successful for decades and have a low likelihood of faltering.
These stocks are usually high priced and have somewhat low interest, but they are also mostly safe choices over the course of several years.
6. Diversify
One term you’ll repeatedly hear as an investor is diversification.
Simply put, diversifying your portfolio means investing in different types of industries and in different ways.
One way to diversify is to hold stocks in multiple areas.
For example, I have stock in tech, energy, retail and manufacturing.
Another way to diversify is to have money in savings accounts, trading accounts, money markets, and even real estate.
Related: Can Nurses Become Millionaires?
7. Invest in Real Estate
Speaking of real estate, it’s generally a pretty good long-term investment.
While you’re unlikely to earn quick cash from real estate, you do have a solid, tangible place to put your money.
What is important to remember is that you don’t buy real estate that is more than you can afford. A mortgage payment that is out-of-reach will cause much more harm than good.
Conversely, upgrading your home, buying a small vacation home, or even a plot of land is a solid choice.
You can even invest in a REIT, which provides the benefits of real estate investment without the personal upkeep.
A Word to the Wise:
Many nurses are tempted to “invest” in a timeshare. Don’t do it. Timeshares are not an investment but a vacation.
Even if you did want to consider timeshares an investment, they’re illiquid (it’s hard to sell or exchange for cash).
If you’re going to buy a timeshare, you should buy it because you like the idea of owning it, not because it’s an investment.
8. Don’t Fully Count Out Interesting Start-Ups
Companies in their infancy have a very high failure rate. That might cause you to be concerned about investing in a new business.
Still, if you’re very intrigued by a company’s promise, don’t let that keep you from investing.
Companies like Google, Apple, Starbucks, and Amazon were all new at one time. An early investor in any of those companies would be sitting pretty today.
At the same time, only invest the amount that you’re willing to lose. Investing in a start-up is risky, but it can also be very rewarding.
9. Try to Avoid Extra Fees
There are hidden fees in almost every area of investing.
From your brokerage firm to your bank to your credit card, these companies can only exist when they earn money from their customers.
It is your job to avoid these fees as much as you can.
Look for a bank that offers free checking and savings accounts. Take out a credit card that doesn’t charge an annual maintenance fee.
When it comes to investment firms, you will spend less if you manage the account yourself rather than using one of their experts. You also are usually charged a lower rate when you have larger sums of money invested.
10. Hire a Financial Advisor
Financial advisors cost money but they also have the experience that you probably don’t.
As a nurse, your free time is precious.
Maybe you don’t want to spend all of that time wondering how to get the most out of your investment dollars.
You probably want to relax, take it easy, and know that you have a professional handling your money for you.
The cost of a financial advisor may be worth far more than the time you will spend worrying about your investment strategy.
Key Takeaways
Try any or all of these investment tips to get your nest egg rolling. If you’re concerned about investing, go here to find a financial advisor to help you navigate your options.
Which of these investment tips are you most likely to try? Do you have some other tips that aren’t listed here? Talk to us in the comments!
Find a Finacial Planner!
Saving and investing for the future can be very difficult, not to mention complicated. If you don’t want to deal with it, you need to hire a financial advisor you can trust to help guide you on the journey.
