How to start investing

 


Now that you understand why investing is important, you might be wondering: “How do I actually get started?”

Starting your investment journey doesn’t require a finance degree or thousands of dollars. With the right mindset and a simple plan, you can build wealth over time, one small step at a time.

Steps to take when you start investing

1.Set Clear Financial Goals

Before you invest, know why you’re investing.

  • Are you saving for retirement?

  • A down payment on a house?

  • Your child’s education?

  • General wealth building?

2.Build an Emergency Fund

Before investing, make sure you have 3–6 months’ worth of expenses in a high-yield savings account. This keeps you from having to sell investments during emergencies.

3.Understand Your Risk Tolerance

Know how much risk you’re comfortable with. Younger investors can typically take more risk, while those closer to retirement often need to be more conservative.

4. Choose an Investment Account

To start investing, you need a brokerage or retirement account. Here are your main options:

  • Brokerage Account: Flexible, taxable, and good for general investing.

  • Roth IRA / Traditional IRA: Great for retirement savings, with tax advantages.

  • 401(k): Offered through employers, often with matching contributions.

5.Pick Your Investments

Start simple:

  • Index Funds or ETFs: Low-cost, diversified, and beginner-friendly (e.g., S&P 500 index fund).

  • Target-Date Funds: Automatically adjust your portfolio based on your retirement date.

  • Individual Stocks: Riskier, so start small if you’re interested.

6. Automate and Stay Consistent

Set up automatic contributions—weekly or monthly—even small amounts. Time in the market beats timing the market.

7.Keep Learning

Investing is a long-term game. Educate yourself as you go:

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