INVESTING

INVEST FOR LONG-TERM GROWTH

Investing involves putting your money into financial instruments like stocks, bonds, and funds with the potential for higher returns over the long term, though this also carries more risk than saving. 

Ways to start investing: 

  • Define your goals. Start by considering what you are investing for. Common goals include retirement, buying a home, or a child's education.
  • Choose an investment account.
    • Retirement accounts (e.g., 401(k), IRA): These offer significant tax advantages and are ideal for long-term goals. If your employer offers a 401(k) match, contribute enough to get the full matching amount—it's free money.
    • Brokerage account: A standard investment account for non-retirement goals.
  • Start small with a robo-advisor. If you're a beginner, a robo-advisor can be an easy, low-cost option. These platforms use computer algorithms to automatically manage your investments based on your goals and risk tolerance.
  • Consider low-cost index funds or ETFs. Instead of picking individual stocks, invest in an Exchange-Traded Fund (ETF) or an index fund. These funds hold a diverse basket of stocks or bonds, providing instant diversification at a low cost.
  • Adopt dollar-cost averaging. Invest a fixed amount of money regularly (e.g., every month) to reduce the impact of market volatility. This is an effective way to build a consistent investment habit. 

INVESTING FOR NURSES

Once your emergency fund is in place and high-interest debt is under control, you can focus on building wealth through investing.

  • Maximize employer-sponsored plans:
    • 401(k) or 403(b): Contribute enough to receive the full employer match, which is essentially free money. The 401(k) is for for-profit hospitals, while the 403(b) is for non-profit institutions.
    • Automate contributions: Sign up to have a set amount automatically deducted from your paycheck and deposited into your plan.
  • Open an Individual Retirement Account (IRA):
    • Roth IRA: Contribute after-tax dollars, and your money grows tax-free, meaning you pay no taxes on withdrawals in retirement. This is an excellent option if you expect to be in a higher tax bracket in the future.
    • Traditional IRA: Contribute pre-tax dollars, and your money grows tax-deferred. You pay taxes on the withdrawals in retirement. The contribution limit for 2025 is $7,000, with an additional $1,000 catch-up for those 50 and over.
  • Consider a Health Savings Account (HSA): If you are enrolled in a high-deductible health plan (HDHP), an HSA offers a triple tax advantage: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. After age 65, the funds can be withdrawn for any purpose without penalty.
  • Use taxable brokerage accounts: After maximizing your tax-advantaged retirement accounts, you can invest in a standard brokerage account. This offers more flexibility with withdrawals but does not have the same tax benefits. 

Investment options for nurses

  • Index funds and ETFs: These provide broad diversification and are an excellent "hands-off" option. They track a market index, such as the S&P 500, and often have low fees.
  • Target-date funds: These are a single, simplified investment option for retirement. The fund automatically rebalances its asset mix over time, becoming more conservative as you approach your target retirement date.
  • Real estate: For those with a higher risk tolerance and capital, investing in rental properties or Real Estate Investment Trusts (REITs) can provide passive income and diversification.

Strategies to boost your income

To accelerate your financial goals, consider these income-boosting strategies:

  • Take extra shifts: Maximize your income from overtime, on-call pay, and shift differentials, which can be significantly higher than your base pay.
  • Become a travel nurse: Travel nurses often earn higher salaries and receive housing stipends, which can provide a significant boost to your savings.
  • Negotiate your salary and benefits: Ensure you are being paid fairly for your experience and skills. When considering a new job, evaluate the entire benefits package, not just the base salary.
  • Explore nursing side hustles: Use your skills in other ways, such as freelance medical writing, tutoring nursing students, or working as a telehealth nurse.