How to start investing? You’ve probably heard the old adage, “It takes money to make money.” While there’s some truth to that statement, you don’t need a lot of money—or any money at all—to start investing. In fact, even if you’re broke, you can still start investing today. In this blog post, we’ll show you how.
We’ll start by dispelling some common investing myths, then we’ll outline the basic steps involved in starting to invest. So whether you’re a complete novice or just need a refresher, read on for everything you need to know about how to start investing.
Investing Myths Debunked
Before we get started, let’s clear up some common misconceptions about investing:
Investing is only for rich people: False! Anyone can start investing, regardless of income. In fact, many investment apps allow you to begin investing with as little as $5.
You need a lot of money to make it worth your while: Also false! You can start reaping the benefits of investing with very small amounts of money. And thanks to compounding—a phenomenon whereby your investment earnings grow exponentially over time—your money will grow more quickly than you might think.
You have to be an expert to invest successfully: Not true! While there are certainly more sophisticated ways to invest, such as day trading or options trading, there are also plenty of low-risk investments that even complete beginners can make. We’ll touch on some of these later on.
Now that we’ve gotten those myths out of the way, let’s move on to the basics of how to start investing…
How to Start Investing in 3 Easy Steps
Figure Out Your Investment Goals
The first step in starting to invest is figuring out what your goals are. Do you want to save for retirement? Build an emergency fund? Or perhaps you’re looking to generate some extra income through dividend payments? Once you know what your goals are, you can start thinking about which investments will help you achieve them.
Decide Which Accounts You’ll Use
The next step is deciding which accounts you’ll use for investing. The most common types of investment accounts are Individual Retirement Accounts (IRAs) and employer-sponsored retirement plans like 401(k)s. Both offer tax advantages that can help boost your returns over time. If you don’t have access to an employer-sponsored retirement plan or if you’re already maxing out your contributions, consider opening an IRA at an online broker like Vanguard or Fidelity.
Decide How You Want to Invest
Now it’s time to decide how you want to invest your money. If you’re a true beginner, my suggestion would be to start with a target-date mutual fund or a robo-advisor like Betterment or Wealthfront. These investments offer a great way to get started because they require very little effort on your part and they’re relatively low risk.
However, if you’re looking for something with higher potential returns, consider investing in stocks or ETFs through an online broker like Robinhood or E*TRADE.
No matter which route you choose, remember that the key is to start small and gradually increase your investment portfolio over time as your confidence—and earnings—grow.
Conclusion
That’s it! Those are the three simple steps involved in how to start investing. Just remember that Rome wasn’t built in a day; similarly, successful investing requires patience and discipline. But if you stick with it, I have no doubt that you’ll be rewarded handsomely for your efforts. Best of luck!
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Disclaimer
This article is not intended to provide financial advice. Please do your own due diligence and research before making any investment decisions.
We hope this article has been useful in helping you understand how to start investing! Good luck on your investing journey!
Investing can help you accumulate wealth, reach your financial goals, and grow your overall financial security. Start small and take it slow—your future self will thank you!
