While it can be beneficial to consult a financial advisor before making major financial decisions, it is definitely possible to do succeed on your own. In this DIY guide, we put together some tips for individual investors looking to manage their own money.

Think long term

Trying to secure quick and easy profits may sound enticing, but even the most successful investors aren’t able to consistently time the market. If you’re managing your own money, investing for the long term is probably the best strategy. The stock market fluctuates all the time but it has consistently risen in the long run. Therefore, buying and holding is the best way to keep your investments profitable. By handling your own money, you must accept the volatility of the market in the short term and have the ability to refrain from panic-selling.

Benefit from tax-advantaged investments

If you’re considering DIY money management, it is important to take advantage of tax-advantaged investments. These include retirement accounts like Roth IRA which lets your tax bill while saving for retirement. This can be done by setting aside small contributions from your income which will have compound growth and can be withdrawn tax-free later on. So, it is a great idea to max out your contributions to these tax-advantaged investments.

Invest in index funds

Index funds are a simple and easy way for individual investors to obtain a strong and diversified portfolio. Index funds allow investors to invest in a selection of different corporations without having to do tedious research about individual companies. These funds also have a history of having a decent return on investment in the long run, with popular options such as the S&P 500 returning around 10 percent annually. By just putting your money into the S&P 500, you will automatically own shares in the 500 largest publicly traded corporations in the U.S. Index funds also have very low expense ratios meaning your returns won’t be hit with large fees.

Set a budget and track your spending

When you are managing your money by yourself, it is up to you to know everything about your monthly expenses. By setting up a strict but achievable budget and tracking your expenses, it will get much easier to save up extra money for investing every month. Even if this amount is small, being able to invest some of your savings can make a big difference over the years thanks to compounding interest.