By Sara Bristoll

There’s no doubt that the Great Recession scared many Americans away from the stock market. We all know someone, or someone who knows someone, who lost a large chunk of their life savings when the stock market crashed. According to a 2015 Bankrate survey, more than half of Americans still don’t own any stock-based investments (including stocks, mutual funds, 401(k)s, and pension plans).

Investing doesn’t have to be as intimidating as it seems. Here are five things you need to know before you start.

  1. Know your risk tolerance. Risk tolerance sounds like a scary concept, but it’s all about knowing yourself, your preferences and your long-term life goals. Are you in your 20s and plan on working until you’re 65? That’s great! You’ve got time on your side and can afford to take more risks.

On the other hand, if you’re in your 50s or 60s and have only five to 10 years until retirement, you might want to invest more conservatively. To help you get started, we’ve included a few questions here to help you determine your risk tolerance.

  1. Learn the difference between stocks, bonds and mutual funds. Say what? If stock market lingo sounds like ancient Greek, take a few moments to learn the key phrases. Knowing what is being said will help take some of the mystery out of the investment world.
  2. Decide how much you can afford to invest. It’s all well and good to say you’ll save half of your paycheck, but will that leave you hurting day-to-day? Sit down and look at what you’re bringing in and what you have going out each month. Cut back if there are areas where you feel you’re overspending and decide on a good number to put away each payday. Then try to grow this amount over time.

If you have a lump sum saved up, you can start your investment account with some of those funds. Experts recommend having at least six months of expenses in a cash account – like a savings or money market. Anything over that can be put to work by investing it.

  1. Define your goals and timeframe. Do you know when you’re going to need to access the money? Most likely you’ll withdraw money for retirement, but take into account any withdrawals you can see coming before then. The amount of time you have before you need the money will determine if you can invest in higher-return, but riskier stocks, or need a more balanced approach.
  2. Find a knowledgeable professional to join your team. There is so much involved in investing that it’s difficult to know it all. But professionals who spend their days in the finance world can help you make decisions about your money, and find the appropriate investments for your unique situation. Seek out someone you trust, who is licensed and has a well-rounded knowledge of the investing world.

It’s OK to reach for your financial goals – and investing can help you get there. While it may seem scary, starting your investing accounts now can pay off infinitely more than trying to play catch-up as you near retirement.

As a member of Arizona Federal, you have access to investment representatives through Arizona Federal Financial Solutions1, available through CFS. Call (602) 683-1000 to reach an advisor.

Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. Arizona Federal Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.