Insurance Banking Investing Retirement Advice Membership Log On Return to Investments Current page: Investing Basics INVESTING BASICS Learn about investing for your future. Invest in your future by saving in the present. Investing can help you reach long-term goals, like saving for retirement or covering education costs. Whether you're starting out or you're an active investor, consider these six investment principles as you invest. 1. Start early. Time is your biggest ally when saving for long-term goals. Build savings into your monthly budget and make it a priority. Financial Goal: Retire with $1,000,000 at age 65. A three-column table outlining saving scenarios to illustrate reaching the financial goal of saving $1,000,000 for retirement at age 65. Scenario 1 Scenario 2 Scenario 3 Start saving at $413 a month at age: 22 37 51 Total savings at age 65: $1,000,000 $359,000 $108,000 Savings goal percentage: 100% 36% 11% Scenarios assume a 6% rate of return. Examples given are hypothetical illustrations and not necessarily an indication of the benefits or features of any product. 2. Start small. Save at least 10% of your income for retirement and adjust your savings as income increases or expenses decrease. Even saving small amounts toward your goal is better than not starting. Consider using a Thrift Savings Plan (TSP), a 401(k) or mutual funds Will open a popover. and ETFs to start investing. 3. Stay committed. Saving for long-term goals, like retirement or education costs, requires patience and discipline. To help you save every month, create an investing plan or consult a financial expert. If managing assets seems overwhelming, consider robo-advisors that monitor and rebalance your investments for automated investing will open a popover. . How Dollar-Cost Averaging Works With dollar-cost averaging, See note 1 you invest a set amount of money each month. So when the market's low, you buy more shares, and when the market's high, you buy fewer shares, which may reduce your average share price. In the example below, your average share price works out to about $13.50 — less than the market average of $15 per share. A table explaining how dollar-cost averaging works for purchasing stocks as share prices fluctuate to minimize your average cost per share. Monthly Investment Share Price Shares Acquired $100 $12 8 $100 $10 10 $100 $15 6 $100 $25 4 $100 $12 8 Total: $500 Average: $15 Total: 37 4. Don't put all your eggs in one basket. Diversifying your portfolio is one of the best ways to manage exposure to risk. Spread your investments across asset classes to help protect your wealth, like domestic and international stocks, bonds and cash through a brokerage account will open a popover. . Example Portfolio Allocation Your “allocation” should reflect your risk tolerance. The investor below prefers an equal mix of stocks and bonds, but your stock-to-bond ratio could be different. Example portfolio allocation is set at 50% stocks and 50% bonds. Over time, some assets may outperform others, changing the allocation. Rebalancing your portfolio may help you achieve your original target allocation. 5. Consider your goals and time. You can meet your goals with unique tax benefits from certain accounts, like traditional and Roth IRAs will open a popover. . TSPs and employer-sponsored 401(k) and 403(b) plans can also grow your retirement savings with tax advantages. These accounts are good for long-term goals, and after varying ages, you can withdraw your money without a penalty. You can help pay for you or your family's education expenses while saving on taxes with a 529 Savings Plan will open a popover. . Withdrawals for qualified expenses, like tuition, books and laptops for colleges, trade and vocational schools are tax-free. Consider opening a taxable investment account if you reach funding limits for tax-efficient accounts or need to withdraw your money without penalty. 6. Cut out emotion during volatile times. Your money should be invested to reflect your long-term savings goals. When there's market volatility, revisit your original plan. With investing, past performance is not a guarantee of future results. While these principles won't guarantee reaching your goal, they could reduce your risk and improve your chances of success. Ready to explore your investment options? Brokerage and Trading Mutual Funds and ETFs IRAs and Rollovers Education 529 Plans Automated Investing Financial Planning Learn more about USAA Investment Services Company, Charles Schwab or Victory Capital Services, Inc. on FINRA's BrokerCheck website. Copyright © USAA Investments/Insurance: Not a Deposit • Not FDIC Insured • Not Bank Issued, Guaranteed or Underwritten • May Lose Value Investing involves risk, including potential loss of principal. Note 1 Systematic investment plans do not assure a profit or protect against loss in declining markets. This site is designed for U.S. residents. Non-U.S. residents are subject to country-specific restrictions. USAA Investment Services Company (ISCO), a registered broker-dealer and a registered investment adviser, provides referral and marketing services on behalf of Charles Schwab & Co., Inc. (Schwab), a dually registered investment adviser and broker-dealer, and Victory Capital Services, Inc. (VCS), a registered broker-dealer. Schwab and VCS compensate ISCO for these services. Important Information from Victory Capital: Victory Capital means Victory Capital Management Inc., the investment adviser of the USAA Mutual Funds and USAA 529 College Savings Plan (Plan). USAA Mutual Funds and the Plan are distributed by Victory Capital Services, Inc., member FINRA, an affiliate of Victory Capital. USAA is not affiliated with Victory Capital or VCS. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds and the Plan logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license. Please click here for important information regarding Victory Capital. Important Information from Schwab: The Charles Schwab Corporation provides a full range of brokerage and financial advisory services through its operating subsidiaries. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (Member SIPC), offers investment services and products, including Schwab brokerage accounts. 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