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<p>The number of Americans who own stocks is on the rise, but the decision to invest your money is personal, and there's not always a clear answer. That's why it's helpful to look at the facts. </p><p>In an April 2023 Gallup poll, 61% of U.S. adults said they own stocks — an increase from 56% in 2021 (and the highest rate since 2008.) Even so, not everyone is active in the market. For some people, it may be because they don't feel they fit the "mold" of a typical investor or are swayed by other misconceptions.</p><p>To help you figure out if investing is right for you, we're sharing six common myths, plus advice on how to move past them.</p><img src="https://www.lifeandmoney.citi.com/rcs/lifeandmoney/storage/public/Business-woman-using-cellphone-in-office.jpg" alt="Business woman using cellphone in office" class="right_image" /><h2 style="margin-bottom: 11px;">1. Myth: Getting started is difficult.</h2><p>Many people think they need access to a top advisor to oversee their investments, but the rise of mobile trading apps and robo-advisory services have made managing a portfolio easier than ever.</p><p>"Many of today's apps offer clean and easy-to-use interfaces and various useful functionalities, and most importantly, they're free," says Tyrone Ross, who operates a San Diego-based financial consultancy called 401 Financial. "My clients use them for everything from monitoring their investments to tracking and budgeting."</p><h2>2. Myth: Investing is too expensive.</h2><p>Think you need a lot of money just to open a trading account? Or that the best-performing investments cater to the top 1%? Neither are true. Brokerages have tamped down fees and minimum account balances in recent years, allowing people to invest with a few hundred dollars.</p><p>Not all funds are expensive either. While some mutual funds — a basket of securities run by an experienced portfolio manager — charge 1% to 2% in fees, you don't have to look far to find inexpensive and efficient options. Exchange-traded funds (ETFs), for instance, deliver transparency, flexibility and tax efficiency at a fraction of the cost of actively managed funds. (Keep in mind that asset allocation and diversification do not guarantee a profit or protect against loss.)</p><img src="https://www.lifeandmoney.citi.com/rcs/lifeandmoney/storage/public/new-to-investing_body-2_1151155735.jpg" alt="A woman makes calculations while reviewing her finances" class="right_image" /><h2 style="margin-bottom: 11px;">3. Myth: Investing requires a complex strategy.</h2><p>There may be a perception that only expert investors are successful, but what many people forget is that passive investments — those that track an index or an industry sector — have actually beaten out some actively managed funds over the past decade. That means that a complex strategy isn't necessarily going to outperform a basic approach.</p><p>Keep in mind, though, that investing is much more than just picking stocks. You'll want to think about how to diversify, manage risks and distribute your assets.</p><h2>4. Myth: Only practice makes perfect.</h2><p>You may know people who spend their weekend poring over financial statements and running spreadsheet models, but the truth is, that's not necessarily the key to investing wisely.</p><p>What you need is a <a href="https://www.lifeandmoney.citi.com/lam/articles/money/managing-money/save-money-with-a-financial-checkup">financial plan</a>. Working with a financial advisor can help you establish appropriate <a href="https://www.lifeandmoney.citi.com/lam/articles/money/managing-money/super-money-saving-tips">savings goals</a>, develop a <a href="https://www.lifeandmoney.citi.com/lam/articles/milestones/retirement/the-new-retirement">retirement strategy</a> and create a <a href="https://www.lifeandmoney.citi.com/lam/articles/money/family/personal-financial-planning-for-families">long-term investment plan</a>. An advisor will develop an intimate knowledge of your finances and can then recommend assets to help you reach your long-term goals.</p><p>"I like to start with the three Es: exposure, education and empowerment," says Ross. "A lot of times people just don't know what's available, how to get started and where to turn at major life milestones."</p><h2 style="margin-bottom: 11px;">5. Myth: The market is a rollercoaster.</h2><p>When major stock market indexes hit a rough patch, it's natural to think that the next big recession is around the corner. You might recall past downturns when markets contracted, unemployment rose and the economy appeared shaky.</p><p>Yet regular corrections can be healthy, and history has shown the market has moved higher more often than not. (Of course, past performance is not an indicator or any assurance of future growth, and because the market can be volatile, there are always financial risks to investing.)</p><p>If you maintain a long-term outlook, you may be more likely to enjoy the growth that the market can provide over time with much less stress. One way to do that is with a systematic approach like dollar cost averaging, which entails investing a fixed amount each week, month or quarter.</p><h2>6. Myth: Investing is a moral minefield.</h2><p>If you're wary of where your money will be going, consider that many publicly traded companies prioritize creating long-term value for shareholders while making a difference in the community. You can check both these boxes with an investment in an ESG fund or company, for example.</p><p>Look for companies that incorporate environmental, social responsibility and governance policies from the C-suite down to first-year analysts, or simply search for a list of Certified B Corporations, which balance purpose and profit.</p><p><em>— With additional reporting from Life and Money by Citi editors.</em></p>

 Investing is a great way to put your money to work. Here's how to get started.

New to Investing? Don't Let These 6 Myths Stop You

<p>If you're evaluating your finances, you might wonder whether it's wiser to hold onto your money or to invest it. But a better question may be: What's the best way to do both?</p>
<p>That's the key to building real wealth, according to finance pros, because if you focus only on saving for the near term, you could be short-changing your retirement &mdash; and if you invest in the future but never save money, you may find yourself underfunded when your mechanic tells you the rattle in your car wasn't just a simple fix. For a more comprehensive approach to managing your money, try these expert tip.</p>
<h3>Put your savings to work</h3>
<p>If your funds are in a savings account earning next to nothing, that can be nearly as effective as stuffing your money under a mattress. Ideally your money should go where it will grow at a higher rate &mdash; either in a high-yield, interest-bearing savings account or into another financial vehicle like a <a href=" https://www.lifeandmoney.citi.com/lam/articles/money/managing-money/money-market-account-or-cd-account" data-link-source="tiny">money market account or certificate of deposit</a>.</p>
<p>You'll want to think through the pros and cons. For instance, CDs typically have fixed rates over their term length, whereas money market rates can fluctuate over time, so your earnings may be less predictable. People tend to like the predictability of a CD, knowing how much they'll earn on interest, but the downside is they can't access their funds before the term is up without paying a penalty.</p>
<p>Others like savings accounts because there's often no minimum required to open one, and you can take the money out whenever you need. Money markets operate like both a savings account and a checking account, with high interest rates and the ability to write checks, along with the ability to sometimes make payments with a debit card (with restrictions on how often).</p>
<h3>Explore a laddered approach</h3>
<p>Staggering CDs or bonds can be a smart way to save more, suggests D. Randolph "Randy" Waesche, a financial professional and the president and CEO of Resource Management, LLC, in Metairie, LA, because it takes advantage of rising interest rates and can also help with cash flow.</p>
<p>Here's how it works: Instead of investing, say, $10,000 into one CD that won't mature for two years, you could take the same money and split it up into securities that will mature in 12, 18 and 24 months. This way, you wouldn't have all your money tied up for two years. In one year, you could take the cash from the first CD or reinvest it, possibly landing a better interest rate, and six months later, you'd have another chance to do the same thing.</p>
<h2>Optimized investing</h2>
<p>Your financial goals should be different for investing versus saving, says Mastrolia, and it helps to keep some guidelines in mind. Generally, she says, if you want your money to be available within three to five years, you should save it &mdash; which could mean putting it in short-term investments such as CDs, for example. But if you can go longer without accessing the money, and you have faraway goals that need funding (like saving for retirement or your kids' college funds), it's a good idea to invest it, perhaps in stocks and exchange-traded funds or ETFs.</p>
<p>This is because, even though there's always a risk when investing, "the market, on average, will provide a greater return," Mastrolia says. "If an investor can leave the money in the market for at least three to five years, statistically speaking, they are likely to make money." Here are questions to consider as you explore investing options.</p>
<p><img class="right_image" src="https://www.lifeandmoney.citi.com/rcs/lifeandmoney/storage/public/SaveorInvest_BodyImage.jpg" alt="Couple sitting on a couch talking"></p>
<h3>Go with an advisor or DIY?</h3>
<p>If you'd rather make financial decisions on your own, there are apps and tools you can use to manage your portfolio and <a href="https://www.lifeandmoney.citi.com/lam/articles/money/managing-money/getting-started-with-mobile-investing-apps" data-link-source="tiny">make investments from your smartphone</a><a data-link-source="tiny">. </a>The DIY approach is less expensive, but you miss out on guidance and the professional point of view that an experienced financial advisor can provide.</p>
<p>An advisor's deeper understanding of the financial landscape and investing options can be particularly useful, especially if there's <a href="https://www.lifeandmoney.citi.com/lam/articles/money/managing-money/questions-ask-financial-advisor" data-link-source="tiny">market volatility</a>. It's the same principle as working with a real estate broker. Yes, you can sell a house on your own, but you may have a less stressful and more profitable experience working with a professional.</p>
<h3>When's the ideal time to start saving for retirement?</h3>
<p>It doesn't pay to put it off &ndash; the earlier you start, the more you'll have when you need it &mdash; and that means making your <a href="https://www.lifeandmoney.citi.com/lam/home" data-link-source="tiny">401(k) account</a> a priority, not only because contributions are tax-deductible, but also because employers often match 401(k) contributions up to a certain amount.</p>
<p><a href="https://online.citi.com/JRS/pands/detail.do?ID=IRAInvesting" data-link-source="tiny">Individual retirement accounts</a> &mdash; IRAs and Roth IRAs &mdash; are other long-term savings accounts that are worth focusing on&nbsp;and are subject to contribution limits and other eligibility rules. With a Traditional IRA,&nbsp;the amounts contributed may be tax deductible at the time of contribution and, together with earnings, are taxable at the time of distribution. On the other hand, contributions to a Roth IRA are not tax deductible, but earnings on them may not be taxable when withdrawn when certain conditions are met.</p>
<p>If you're deciding which to invest in, keep this in mind: With a Roth IRA, the tax break comes when you retire, since you'll get tax-free withdrawals. That may sound great, and it is, but a traditional IRA's annual tax breaks might help you save more money every year. That said, if you fear you won't make shrewd financial decisions with the annual tax benefits, it may be best to go with a Roth IRA.</p>
<h3>What are your goals and appetite for risk?</h3>
<p>Experts tend to recommend diversifying your financial portfolio and sticking with safer investments the closer you are to retirement. You can also minimize risk with <a href="https://www.lifeandmoney.citi.com/lam/articles/money/savings/what-is-systematic-investing" data-link-source="tiny">systematic investing</a>, a process that uses data, algorithms and proven policies designed to grow your financial portfolio.</p>
<p>If you have decades to go before this stage, generally you can take more chances for a potentially bigger return; the thinking is that, if your investments lose money, you'll have time to try to recover it. Granted, markets will fluctuate and there are no assurances, but if you're in a position to wait, you may be able to limit any losses to paper. As Mastrolia points out, "If you look at the S&amp;P 500 as a proxy for the market return over the past 100 years, the average annual return was about 10%."</p>
<p>Building real wealth can take some balanced thinking, but it's worth weighing what you're putting away for the future with your spending choices today to land on your ideal spending-and-saving mix.</p>
<p>&nbsp;</p>
<p><em>&mdash; With additional reporting from Geoff Williams and Life and Money by Citi editors</em></p>

Save or Invest? To Build Wealth, Try a Balance — Here's How.

<p style="margin-bottom:11px">An investment strategy that entails setting up payments to be routinely withdrawn from your checking account might sound like a questionable way to make money, but it's actually a fairly straightforward financial strategy for creating wealth, and one that doesn't depend on a lot of luck or magic. Here's how it works.</p><p style="margin-bottom:11px">With automatic investing, you're continually putting money away for your retirement or other goals with certain amounts rather than every once in a while. Technology does the heavy lifting here so you aren't the one making daily decisions. One way is to invest a certain sum in one or many investments that do not change. Another way is to use a robo advisor to monitor and periodically rebalance your investments in line with your risk tolerance, investment goals and time horizon.</p><p style="margin-bottom:11px">Historically speaking, over time — not a few years, and certainly not a few months — the stock market indexes have increased in value (though past performance is no guarantee of future results). That's why an automated investment program can be so valuable: Investors can be distracted by whatever's going on in their lives and sometimes make financial choices powered by emotions, but with automatic investment programs, a person continues to invest. </p><p>"It's all about dollar-cost averaging, an investment strategy in which you invest the same amount of money at regular intervals," says Andre Jean-Pierre, a financial advisor and founder of Aces Advisors, LLC, in New York City. "This ensures you buy more shares when prices are low and fewer when prices are high. As a result, you sidestep the risk of making a sizeable investment when the market hits a sour note."</p><img src="https://www.lifeandmoney.citi.com/rcs/lifeandmoney/storage/public/systematic-investing_body-1_1419556699.jpg" alt="A young woman uses her laptop to adjust her investments" class="right_image" /><h2 style="margin-bottom: 11px;">When can you use automatic investing?</h2><p>Often, when people talk about automatic investing, they're referring to investing through mutual funds or an employer-sponsored retirement plan, such as a 401(k). The way it works: You decide what amount or percentage of your income you want to contribute, and then those funds are taken from each paycheck and diverted into your retirement accounts.</p><p>How much should you contribute? Most professionals recommend putting away 10% to 15% of your pre-tax income toward your retirement. If that feels unrealistic for you, start with a smaller amount, whether that's 5% or 3% or 1%. One percent of your paycheck earmarked for retirement may sound like not enough to successfully fund your future, and it probably isn't, but it's far better than 0%, and if you can add another 1% every year, eventually you'd get to a good place.</p><p>"No two households are the same," says Rui Yao, a professor in the Personal Financial Planning department at the University of Missouri and a CFP<sup> ®</sup>. "How much to save out of your current income requires a careful plan." For instance, if you're carrying a lot of high-interest debt, she says, you'd want to focus on paying that off rather than trying to put 10% of your income toward retirement. Meanwhile, if your employer matches contributions to your 401(k) plan, it's a good idea to contribute enough to get the maximum match that your employer offers if you're able to swing it, she adds. "You can't get the maximum employer's match and at the same time, default on the mortgage or rent," Yao says, but if it's doable for you, "an employer's match is free money on the table — take it."</p><img src="https://www.lifeandmoney.citi.com/rcs/lifeandmoney/storage/public/GettyImages-1151007843_web.jpg" alt="Retired man using smartphone while sitting with dog in room at home" class="right_image" /><h2 style="margin-bottom: 11px;">Why does automatic investing work?</h2><p>In essence, this strategy has historically worked because you're only human, and an automatic investment program is not. You might make a mistake, such as forgetting to reinvest a dividend, or buying too high and selling too low. An automated system, such as a robo advisor, can automatically rebalance your account, selling investments that are too large and buying investments that have become too small.</p><p>For instance, if you originally set your 401(k) contributions to 70% stocks and 30% bonds, you might find after a year that your account looks more like 75% stocks and 25% bonds. If you've set everything to automatically rebalance, your portfolio will do just that, selling some stocks and buying some bonds to get the allocation back to your original settings. (Of course, changing your portfolio always brings the natural market risk of losses or gains to your investments.)</p><p>Granted, it's not as exciting as it might be to pick the next hot stock to explode or to buy a million-dollar winning lottery ticket, but it can be a "get rich slowly" process that has historically worked for many people. Another plus is that, eventually, you may not even miss the amounts you're routinely setting aside for retirement. "It may be difficult to get started to save and invest," says Yao, "but once you have done it for a while, it becomes a new normal and you get used to it fairly quickly." In fact, you could say it'll become automatic.</p><p> </p><p><em>— With additional reporting from Geoff Williams and the Life and Money by Citi editors.</em></p>

What Is Automatic Investing and What Are the Benefits?

<p>If you've ever tried to finally get organized, or to become more of a morning person, you know the first step is figuring out why you avoid putting papers away or getting to bed at a decent hour. Changing spending habits is similar — it helps to understand why they started in the first place.</p><p>Their origin can vary, according to Sarah Newcomb, a behavioral scientist and author of "Loaded: Money, Psychology, and How to get Ahead Without Leaving Your Values Behind." "Some things related to money management are part of our personality," she says. "Others are inherited or absorbed from our surroundings as we grow up — and the same circumstances can produce very different results, depending on the person."</p><p>Which is to say, each person's perspective on money has been shaped by a unique mix of factors including family attitudes, peer influence, individual experiences, historical forces and our own always-evolving approach to decision making. If you want to improve your spending habits, it's useful to think about the influences guiding your financial decisions, Newcomb suggests.</p><p>"The <em>why</em> is often just as important as the <em>what</em>."</p><p>Each of us can identify with a particular spending profile, she believes, and once you determine what yours is, you're better equipped to improve your money habits. Read on to find the one that suits you best — and the advice that fits your financial personality.</p><img src="https://www.lifeandmoney.citi.com/rcs/lifeandmoney/storage/public/SELFLESS SPENDER-Cropped shot of handsome man hugging his beautiful girlfriend small._0.jpg" alt="man with beard being kissed on cheek" class="right_image" /><h3>Selfless spender</h3><p><strong>Defined by:</strong> A tendency to spend generously on others.</p><p><strong>What it means for your money:</strong> Spreading the financial love is noble, but it may leave you stretched thin when it comes to your savings.</p><p>If you're a selfless spender, try to: give more time and less money. If being generous is your goal, consider helping your friends and family by babysitting for free or running errands instead. Give yourself spending limits for gifts. (And nobody has to know something was on sale; the thought, not the price tag, is what counts.)</p><h3>Status spender</h3><p><strong>Defined by:</strong> Spending driven by a desire to keep up with the latest trends.</p><p><strong>What it means for your money: </strong>The focus on right now can potentially leave you unprepared for emergencies or longer-term goals such as retirement. </p><p>If you're a status spender, try to: institute a 48-hour rule before you buy. Delaying gratification gives you a cooling-off period to ensure this isn't an impulsive purchase you don't actually need. Take inventory as well. Look around at the objects in your home, paying special attention to pricey or status-driven purchases, and ask yourself whether you still use each. Recognizing the amount you've accumulated may help you curb the tendency in the future.</p><h3>Spontaneous spender</h3><p><strong>Defined by:</strong> Buying smaller items you don't necessarily need, on impulse.</p><p><strong>What it means for your money:</strong> Small purchases can add up to one big shortfall in your savings plan.</p><p>If you're a spontaneous spender, try to: Keep a financial diary. Each evening (or as regularly as you can), write down everything you bought that day; it's a simple act of accountability that can make you more mindful when shopping.</p><img src="https://www.lifeandmoney.citi.com/rcs/lifeandmoney/storage/public/spending-profile_body-2_1282653107 (1).jpg" alt="A woman gazes at items in a shop window." class="right_image" /><h3>Free spirit spender</h3><p><strong>Defined by:</strong> A hands-off approach to money management (i.e. no budgeting or number-crunching).</p><p><strong>What it means for your money:</strong> It's tough to save when it's unclear how much money is coming in and going out each month.</p><p>If you're a free spirit, try to: do one thing — big or small — to improve your finances each week. Create a budget, shop around for a better deal on your car insurance, pay an extra $10 to your credit card debt or round up your loose change and put it into savings. And consider letting an app do the saving for you. Some digital tools will link your checking account to enable no-fuss automatic savings deposits; this may help give you freedom to be a guilt-free spirit spender with some "fun" money left over.</p><h3>Planned spender</h3><p><strong>Defined by:</strong> A watertight budget, with savings included.</p><p><strong>What it means for your money:</strong> You're saving regularly but may not be taking time out to enjoy the benefits of your efforts.</p><p>If you're a planned spender, try to: Add a line item to your budget for fun. Give yourself some money every week or month to spend on whatever you want. (If you don't ever feel like you enjoy your money, you may sour on the idea of saving.) Make sure you're reserving funds for wants, and not only needs, too — think annual vacation or new electronics, and not just emergencies and retirement.</p>