Investing for Beginners: Where to Start (2024)

I am sure that you have heard about investing lately. The stock market is still doing well in 2020, it has been rising steadily since the recession of 2008. Maybe you want to be sure you are on the bandwagon and get in on some of the money to be made. Maybe you are more apprehensive about investing, but you want to be smart and set aside money for the future.

Regardless of your motivations, I have laid out a very simple guide to get started investing for beginners.

Make sure you are ready to start investing first

You have established an emergency savings.

You have eliminated high-interest debt.

You are already investing in your 401K or IRA.

You understand your financial goals for the money you wish to invest.

Decide Your Financial Goals

When you know what your intent is with themoney that you wish to invest and see grow, it will be easier to determine thelevel of risk you can take with it.

Investing is only wise for money that willbe used 5 years or longer from now. Ifyour “longer” is after age 60 for retirement, you need to put that money in anIRA. If you wish to use it between 5years from now and when you turn 60 than a non-IRA investment account could beright for you.

Open a Brokerage Account

The easiest way to get started is to begina brokerage account with any bank or investment firm.

Vanguard and Fidelity are known as the lowest costinvestment options in the nation.

Other good options are Charles Schwab and TD Ameritrade, who by the way are looking to merge as Schwab buys out Ameritrade.

Explore the websites, see which resonateswith you and which you would like to do business with. Thengive them a call.

A phone call is helpful in this casebecause discussing with a person what your goals are for the account isvaluable. This will help them know whattype of funds to put your investment money in.It will most likely be a mixture of stocks and bonds. The stocks are the risky asset and the bondsstabilize it. The longer your timehorizon or the more risk you want to take, the more stocks will be in yourmixture.

You can start with an opening balance, someas little as $100, then add to it each month just as you would grow youremergency fund. Each time you add yourmonthly amount they will buy the stocks and bonds in the ratio that waspredetermined for you.

Remember, do not be too excited or alarmedif you see gains or losses from day to day or week to week in the amount in theaccount. What you are hoping for withthis type of account is an average growth overtime. You want to see gains over 5%if possible, but over a span of 5, 8 or 10 years. There will be ups and downs during thistime.

Investing is not a get rich quick scheme, but it will help you to see some interest gained on your money as you save for something in the future. You should see much more interest gained than if it is sitting in a savings account today.

Other Helpful Posts:

Top 10 Quotes About Investing

Are You Ready to Start Investing?

Gain More Interest in Your Savings Account

Don’t Start Investing by Buying Individual CompanyStocks

I don’tsuggest starting with buying individual company stocks unless you have done anextensive amount of research and know why you are buying the stocks. Don’t put a few hundred or thousand in acompany just because they are a popular company like Tesla. Just as an example Tesla is a stock thatcosts over $500 when I looked at it today.Unless you have a significant amount of money to invest in Tesla, youwould only get a couple of stocks. Thenall your investment money is truly “in one basket”, you would be fully relianton this one company for your gains and your losses.

I would only do this if youunderstand the value of the stock, how much is a good price to buy at and thenplan to keep it for the long term.

If you want to learn more about trading individual stocks, start reading books or online to gain more insight. If you want to learn with hands-on, then download a free to trade app like Robinhood and give yourself $100-200 of “fun money” to try and see what happens with it. Be sure this is money that you wouldn’t mind losing if the stocks you purchase go down because they will vary and they will vary up or down from day to day.

I believe that investing is a long term plan for your money. Buying and selling often are more like day trading and you would need to research that elsewhere as I do not know enough to help you with that.

Some of my favorite resources forlearning about investing:

Saveandinvest.org

Investopedia.com

Lindapjones.com

Banyanhill.com

Invested Book and Podcast by Danielle and Phil Town

The bottom line.

Know your goals for your money and put them somewhere that will make you the most interest and be available when you need it!

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