When is the best time to begin investing? I'm not talking about market timing or buying low and selling high. What I'm talking about is, "Are there certain things we need to do first, before we begin to invest?"

When is the best time to begin investing? I'm not talking about market timing or buying low and selling high. What I'm talking about is, "Are there certain things we need to do first, before we begin to invest?"

Even though the old adage stands true, "the sooner, the better," there are certain things that need to be addressed first. There are areas of your life that need to be fulfilled before taking that first step into investments. Here are some key factors to consider:

1. Debt: Does it make sense to begin saving for your future when you have debt? In most cases, no. First of all, I do not consider mortgage as a debt. I view this as an investment. Sometimes it makes more sense to invest rather than pay extra on a mortgage.
   
   As for other debt, does it make sense to invest in something that may earn 10% when you're paying 11% interest on a debt. The answer is "no." You're going backwards! The only way it could possibly pay off is if you get some sort of tax writeoff on the interest, such as a mortgage. I see people all the time that are putting into their employer-sponsored 401(k) or 403(b) plans or IRAs and are paying 15% on their credit card payments. It does not make sense to do this! Get out of debt first!

2. Provide for your family: Before investing, it is imperative that your family's needs are met. Larry Burkett often talks about Needs, Wants, and Desires. A need might be that you need transportation to and from work. A want might be buying a new car to do this. A desire would be buying a Mercedes for this purpose. We must make sure all our family's needs are taken care of before buying any wants or desires. Also, we must make sure that our needs are taken care of before beginning to invest. 1 Timothy 5:8 - "If anyone does not provide for his relatives, and especially for his immediate family, he has denied the faith and is worse than an unbeliever."

3. Plan: Before beginning to invest, you should have a good idea as to what you are investing to achieve. You need to know how much to invest to achieve your goals, adjust all factors for inflation, and use realistic projected investment returns. Also be sure to take into consideration taxation issues, contribution limitations, withdrawal guidelines, and risk tolerance when choosing investments and investment vehicles. Planning your investments is usually extremely complex. I would not advise anyone to do this on their own. I firmly believe that this should be done with the help of a knowledgeable professional. I know that there are a lot of do-it-yourselfers out there, but sometimes it just isn't worth it. I learned this lesson the hard way when buying my first home. If only I would have listened to the advice from Proverbs 15:31, "Plans fail for lack of counsel, but with many advisers they succeed."

Once these areas are covered, it is probably a good time to begin investing. Keep in mind that the sooner you begin investing, the better. The "miracle of compound interest" can work in your favor. The effects of inflation and longer lifespans have made it imperative to start investing as soon as possible! If you would like us to help you develop an investment plan, please fill out our online forms or contact us .