I’ve been thinking more about investing money lately and wanted to learn how other people got started. There are so many options now like stocks, ETFs, crypto, real estate, and savings accounts that it can feel a little overwhelming at first. For beginners, what do you think is the smartest and safest way to start investing? Are there any common mistakes new investors should avoid? Would love to hear what worked best for you and any advice you’d give to someone just starting out.
As a beginner you should discard real estate and crypto. You should probably focus on dollar-cost-averaging into S&P500 index ETFs. I assume that you are investing for the long-term. You want to keep things simple when you are a beginner…
The best starting point is to learn the principles of investing. They include:
- Develop a workable plan
- Start saving early
- Choose appropriate risk
- Diversify!
- Never try to time the market
- Use index funds when possible
- Keep costs low
- Minimize taxes
- Keep it simple
- Stay the course
Link to an article that does an excellent explanation of each of these principles
Smart Investing | Investing For Beginners | Simple Common Sense Rules
Open a Roth IRA at Vanguard, Schwab, or Fidelity, and set up automatic transfers to it every pay period. Invest it in a total market fund or a fund that tracks the S&P 500.
Do you have a 401k or similar plan at work? If so, and particularly if there’s an employer match, it might be even better to start with that.