Decide whether you can play with stocks
If you have diversified retirement and savings accounts for necessary goals, you can then determine whether you have enough money to carve out a portion to test your own investing acumen, says Stephen John Dygos of Schwarz, Dygos, Wheeler Investment Advisors, LLC, of Minneapolis.
"If taking out money wouldn't put them in jeopardy (of not having sufficient retirement funds)," individuals can take some risks on their own, Dygos says.
The term "play money" is commonly employed to describe using a special account for buying stocks, says Susan Menke, senior financial services analyst with London-based Mintel Group Ltd.
However, Dygos says he doesn't want people to think of investing as "play."
He often advises clients to think about how long they had to work to accumulate the funds in the play money account. That exercise helps people to set aside a relatively modest sum, he says.
Still, many people view investing as more than simply profiting to build savings. "In our consumer surveys, we see that investing -- especially amongst retirees and young men -- is something they talk about with others and that is interesting to them,” Menke says.
In that view, delineating an account for trades, providing it doesn't jeopardize overall financial security, is like spending for a hobby, she says.