Financial literacy is about raising public awareness of the importance of maintaining smart money management habits. We know that greater financial literacy is associated with greater financial well-being.

Consider the following scenario: Jane saves $1000 each year for 10 years and then stops saving additional money. At the same time, Sam saves nothing for 10 years but then receives a $10,000 gift, which he decides to save. If both Jane and Sam earn a 5% return each year, who will have more money in savings after 20 years?

If your answer was that Jane would have more money, you would be correct.

Unfortunately, American adults only scored 50% (an F) on this year’s annual basic personal finance survey, as conducted by the TIAA Institute. This survey found that 23% of adults were not even able to answer 7 out of 28 questions correctly.

This data drives us at Financial Freedom Wealth Management Group to help people create a plan for their dreams and inspire them to pursue financial freedom. We have found that, unless you are wired to want to understand money and have a natural passion for it, it can be difficult to know where to start. Our life experiences from an early age shape how we look at and deal with money, and it can be hard to change habits and behaviors. No matter where you are in life, the best time to start managing your money and investing is right now. You are never too young or too old to start, no matter how much money you have.

If you’re feeling overwhelmed, you can entrust qualified professionals to help. You can partner with a financial coach or a licensed, experienced financial advisor. This might not feel like an option if you have not yet begun to accumulate assets. We would encourage you to take on the mindset of a student and learn as much as possible about managing money and investing.

People who start investing early and consistently develop a disciplined approach that often results in the accumulation of greater assets. In addition, investing with a longer time frame in mind allows an investor to withstand volatile markets and stay invested.

I remember getting my first paycheck from McDonalds when I was 17. My dad sat me down and talked to me about investing. Together, we decided I would save $25 a month into a mutual fund. I remember how excited I was to write out that check and send it in each month. That was the beginning of my investing experience and led me to a career in financial services.

Here are five investment strategies to consider whether you are a seasoned investor or just getting started.

Match Investments to Your Time Horizon: It’s important to know what you are saving for and how much time you have until you may need the money. This is all about risk management. For a shorter timeframe, consider a conservative approach with less risk. If you have a long-term goal, a more growth-oriented approach to investing might be better. These investments come with increased volatility, but a longer time horizon can mitigate the impact of this volatility.

Align Investments with Your Values: For some, it may be important to know that there are ways to invest that can help make a positive impact on the world. With what is referred to as sustainable investing, not only does it help produce positive returns, but it can also align an investor with investee companies seeking to improve their environmental, social and governance (ESG) impacts. This allows for alignment with what matters to you as the investor.

Diversify Your Investments: It’s crucial to have a diversified portfolio. This means owning many types of investments and as your accounts grow, continuing to add to a broader range of investments. This helps manage investment risk, while potentially offering greater returns than if you are invested in a less diversified portfolio, like owning a couple of single stocks.

Rebalance Your Portfolio: Rebalancing your portfolio, at least yearly, is a prudent investing strategy. Over time, certain investments may take up a larger piece of your portfolio due to positive performance within those investments. Therefore, rebalancing your portfolio back to your original risk tolerance and time horizon goals may prevent you from becoming more aggressive than you intended.

Prioritize Consistent Contributions to Your Investments: Each month, you pay your bills or other obligations, but what about contributions to your investments? Consider making a deposit into your investments as one of the first things you do each month. How much you can contribute depends on your financial situation, but the act of “paying yourself first” is a basic investment tenet.

These are just a few ways to get started with pursuing your financial goals. We would encourage you to continue to expand your financial literacy, take action, and never give up on your path to financial independence.

Securities and Advisory Services offered through LPL Financial, a Registered Investment Advisor. Member FINRA & SIPC.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.

The hypothetical example is not representative of any specific situation. Your results will vary. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing.

Forbes, Financial Freedom Wealth Management Group and LPL Financial are all separate entities.

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