Step-by-Step Guide to Getting Started With Investing

How learning about investing can save you thousands

April 08, 2024

Why you need to get started with investing NOW

I just want to start by listing just a few reasons why you need to get started with investing as soon as possible because it is an extremely important part of personal finance.

Reasons to start investing now…

  • Cash decreases in value by 3% per year

  • The average S&P 500 fund increases in value by 7% per year after accounting for inflation

  • Home values increased over 14% per year

  • in 1971 61% of America were middle class, and now roughly 50% is. The ones who are getting ahead are the ones investing

  • Grocery prices have jumped over 25% in the past four years

  • To afford the average home in the US you need an income of over $100,000 and in some cities, you need 3-4 times that amount (the median household income is just under 75k)

  • By 2035 social security is expected to run out of funds. We cannot rely on the government to take care of us in retirement.

  • On a more positive note, money invested compounds year over year. This means your money can grow at an exponential rate.

If this has not convinced you of the importance of investing then I do not know what will. Investing should not be taken as a recommendation, it should be seen as a requirement.

So how do I actually start?

Learning how to invest is actually not hard at all, the hard part is deciding what to actually invest in.

To get started with investing if you are over the age of 18 you can easily open a brokerage account on your phone or computer. All you need to do is download a brokerage app on your phone and follow the steps to sign up (recommended brokerages at the end).

Opening a brokerage can take as little as 10 minutes and is not complicated at all.

Once you have a brokerage account opened the next step is to decide what to invest in and how to invest. This part is a little bit tougher but luckily there are some options you simply just can’t go wrong with.

Now I am not qualified to tell you specific investments to choose, but I can tell you that ETFs and index funds are the way to go. The best kind of ETFs or index funds are ETFs that track the total market or a large portion of the market.

If those terms confuse you an ETF or an index fund are both basically just baskets of stocks that let you invest in small portions of each stock. The two most common ETFs to invest in are VOO and SCHD. Start by taking a look at these investments and do your own research to pick what aligns best with your own goals.

After you buy your ETF or index fund of choice (ETFs are generally easier to start with), you can now just sit back and let your investment grow. The market generally goes up but has down times occasionally, the strategy is to just keep doing what you would always do even if the market is down, don’t sell shares, and don’t stop investing.

The best strategy from this point is to do “dollar cost averaging” this is where you put the exact same amount of money in the market every month no matter what. This is a proven strategy and probably one of the most simple yet also most effective strategies out there.

Investing is seriously so easy to start and can take less than an hour to get completely set up. Now lets talk a little bit about the dark side of investing…

Why having investing knowledge can save you thousands.

Investing in reality should be super simple and not complicated but many people like to overcomplicate investing in order to try and sell you investing tips, ideas, or tools that will supposedly make you more money

Unfortunately, investing is simply a long game of letting compound interest take effect. As the richest investor Warren Buffet has said “The stock market is a device for transferring money from the impatient to the patient”.

Making sure you educate yourself on how the stock market and other investments work can help you stay away from people trying to scam you by selling over-hyped stock market ideas or tips.

There are a few things you should always have in mind when thinking about investing advice…

  • If it was really that good everyone would be doing it

  • If you could really make millions with that idea/strategy why do you need to sell it?

  • Does this person have the right and authority to be talking about this? (qualifications, experience, proven and verified results)

  • Does this person practice what they preach, do they take their own advice?

  • Does this sound too good to be true?

  • Does this person have a hidden motive for sharing this advice? (trying to get you to buy something)

  • Do they have poor communication or do not take questions?

I should say that just because someone is also trying to sell something does not automatically mean they are a scam. There is a whole industry for people to give financial advice that is not a scam. The difference is these people have clarity and honesty and don’t make outrageous promises as a sales tactic, they often also have certificates and verifications that prove they are more trustworthy than others.

The world of finance is littered with get-rich-quick schemes and poor promises of insane wealth. Unfortunately, it is often also those who need money most who fall for these scams, as they are in more desperate situations. Do not let your emotions cloud your judgment when making financial decisions. If you are ever making a large financial decision or trying to decide if something is a scam or not it is best to get second and third opinions from people who care about you.

If you take some time to learn about the financial markets and about finance you can better understand that when someone is showing off a strategy that can get you a 25% return you can automatically know that they are full of crap.

If you ever want a second opinion from someone who knows a good amount about personal finance and the financial markets you can always reach out to me, I am always happy to answer questions, give a second opinion, and connect with my readers.

Brokers I use

  • Webull Best for more active investing (get up to 75 free shares by depositing over $100)

  • M1 Finance Best for more passive investing above $10,000 (get $100 if you invest more than $10,000)

  • Charles Schwab Best for custodial accounts (get $100 by investing over $25,000)

  • Fundrise Best for buying alternative investments ($25 for signing up and making a $10 deposit)

Other tools

Disclaimer: Most links are affiliates but I 100% endorse and use all of my promotions, we also split the promo reward when you sign up!