New Investors Are Overwhelmed by Choices, But the Hidden Investment Potential in a Health Savings Account Will Blow Their Minds.

Jumping head-first into the world of investing can be a daunting proposition. There are countless accounts, investment strategies, and terms to wrap your head around that can be barriers to entry for any new investor.

Fortunately for the rookies, there are more than a handful of essential investment opportunities to take advantage of if you are interested in slowly growing your wealth.

1. Checking Account

Opening a checking account is most people’s first step toward complete financial wellness. Not only are checking accounts devoid of investment risk, but they can also help lay the groundwork for the responsibility needed to make more thorough investments in the future.

In addition, you establish a relationship with a bank by opening a checking account, learning the basic ins and outs of banking using debit cards, and keeping track of your spending. 

2. Savings Account

Think of a savings account as a piggy bank. In its most basic form, the account is used primarily to save money while making low (extremely low) interest on your deposits. Although it is the least risky investment option, your money is safe in a savings account.

In addition, most banks will only allow a small amount of savings account withdrawals in a month – this works to keep any cash you keep in the account truly “hands off.” And hey, if you’re at the bank already opening a checking account, you should also consider opening a savings account.

3. Emergency Fund

In today’s world, you never know when a life-changing event will happen that will affect your wallet. Medical emergencies, an unexpected loss, or even an impromptu move are just a few situations that can quickly drain your bank account.

Fortunately, sensible insurance against these events is available as an emergency fund. So, in addition to keeping a savings account (and other investments), saving money – usually enough to keep you afloat financially for a few months – in a separate account for your peace of mind is advised.

4. Individual Retirement Account (IRA)

An IRA is a type of retirement plan that lets you put up to $6,000 towards your retirement yearly (or $7,000 per year if you are above 50). Although there are different IRAs to invest in, they are the most straightforward path to financial freedom when you retire.

Every dollar you contribute to your IRA will make you more money over the years, compounding interest over time. Anybody savvy with their money will tell you that it’s never too early to open an IRA -the earlier, the better!

5. 401(k)

If you’re employed, and your employer offers it, you’re leaving money on the table by not participating in their 401(k) program. But, frankly, it’s the best way to save for your retirement because many companies will match your contributions to your retirement plan.

For example, if you contribute $100 per paycheck into your 401(k), your company will match that amount, essentially rewarding you with free money down the road. Of course, not all companies offer 401(k) matching, so do your homework and jump on the opportunity if it’s available.

6. Health Savings Account (HSA)

There are numerous benefits to opening an HSA that savvy investors typically are open to. For example, any funds added to this account will grow tax-free, and when you need to use funds from your HSA for qualifying medical expenses, you can also spend it tax-free.

Just make sure you meet the criteria for being able to open an HSA: you need to be covered under a high-deductible, non-Medicare health plan. In addition, you cannot be considered somebody else’s dependent for tax purposes. The benefits don’t stop there, however: You can even invest in mutual funds through your HSA, making it one of the most financially logical accounts for a beginner to open.

7. Brokerage Account

If you’re interested in investing in stocks, bonds, mutual funds, and exchange-traded funds (ETFs), look no further than brokerage accounts. Chances are you’re already familiar with the big online brokerages: TD Ameritrade and E-Trade are just a few of the established players in the industry.

So whether you want to jump head-first into the exciting but innovative world of day trading or want to begin your career as a slow-burn investor, opening a brokerage account is the logical next step in the process. Don’t worry; these companies make it virtually idiot-proof and will guide you through each step if you feel overwhelmed.