3 Ways to Get Started with Investing- The Best Guide


Whether you’re saving for a goal or just want to live below your means, you should invest your money if you know you won’t need it for the next several years. Unfortunately, many don’t know how to invest or are afraid of it. Luckily, even if you don’t know anything about the stock market, it’s not hard to grow your money wisely.

Saving Money to Invest 

You’ve probably heard that you have to have money to make money, so living below your means can help you achieve that goal. Try to set aside a certain amount each month so you can diversify your portfolio. Many people who have debt find it’s hard to save enough for their goals.

If you have student loans, refinancing them might help you save money. The goal is to renegotiate interest rates, and with a lower rate, you’ll likely pay less over the life of the loan.

Decide on Your Approach

If you want to invest in the stock market, there are a few methods you can use. You can manage it yourself, you can use a robo-advisor, or you can have an advisor at a brokerage manage it. While it might sound simple to use a managed account, they often come with high fees, and you may not feel comfortable handing off important financial decisions to someone else.

Using a robo-advisor simply means an algorithm chooses a set of diversified investments based on your goals and risk profile. However, it often comes with fees, and you can create a diverse portfolio using exchange-traded funds. You might make the most money by doing things yourself.

The next step is to open your account. If you choose a robo-advisor, you won’t have many options, although new advisors are coming up regularly. But if you want to go the DIY route, you can choose from a range of discount brokerages. When you’re choosing a brokerage, look at the fees you’ll pay for selling or acquiring assets, types of available investments, the trading platform, and minimum deposit requirements.

Choose one that offers free trades or low commissions with a user-friendly online platform. You’ll make an initial deposit, usually by transferring money directly from your bank account. Some also let you send a physical check. Remember, the more you put in, the more you can earn, and most accounts don’t have any limit.

Create a Diversified Portfolio

Once there’s money in your account, it’s time to buy investments. You’ll have to figure out where to put the funds. Since you don’t want to put everything in one place, choose a mix of assets. For example, many people choose to invest in small and large-cap U.S. stocks, bonds, foreign stocks, and real-estate investment trusts.

With exchange-traded funds, you will be pooling your money with others to purchase different asset categories, like shares of a company. They make it easy to diversify since you can trade them on the market. Since there are many to choose from, you can be exposed to many kinds of assets.

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