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Where Do I Start Investing For Beginner ?

I keep hearing about investing some money, so I decided to give it a try.
But I need help?
How do I start investing?
What app is good for investing?
WHERE DO I BEGIN?

#finance #accounting #investment-management #money #career #covid19 #help #money


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Syed’s Answer

Hi Nancy,

Thankfully there's a lot of apps these days that allow you to invest with little to no fees:
1. Wealthsimple - Robo-advisor that you can set up regular auto-deposit and "Roundup" deposits to invest in a variety of conservative, income and growth portfolios

2. Robinhood: Easy stock buying in an intuitive user platform. Can buy individual stocks, some cryptocurrencies, options, ETFs, etc.

3. Acorns

4. Coinbase: Use this to buy and store cryptocurrencies


If you don't want to use real money, you can use these virtual capital markets games to learn how to invest using fake digital money:
1. Investopedia Simulator: https://www.investopedia.com/simulator/
2. Marketwatch: https://www.marketwatch.com/game

Thank You So Much. Nancy O.

Sure thing! Syed Ferdous BACKER

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Austin’s Answer

401K is a great option especially if your company matches. After that, I'd look into Vanguard index funds or ETFs which are highly diversified. Make sure investments are low cost. These are longer term and lower risk ways to invest. Read up on Warren Buffet's $1,000,000 bet with a hedge fund.

Thank You So Much. Nancy O.

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Nicole’s Answer

Hi Nancy O.

Thrilled that you are asking this question! My first job out of school was for an investment bank. One of my first assignments was to read, from cover to cover, "The Wall Street Journal Guide to Understanding Money & Investing". I HIGHLY recommend it for where to start. It is not a large book, it is a relatively easy read and I have found it to withstand the test of time on giving an excellent grounding on what it means to "invest" in the markets, in the broader economy and in an individual's future.

Happy reading and good luck!

Thank You. Nancy O.

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Jesus G’s Answer

Hi Nancy!

I'll be honest, investing is difficult. Not because there's anything difficult about giving away money, but because you need a lot of restraint to see your money rise and fall through time. Sometimes you make money, sometimes you lose money. If you are not experienced and are learning for the first time, I would highly recommend you connect with a financial advisor in your area that you can develop a working relationship with. Trust me, you'll learn a lot and you may avoid losing a lot of money.

Also, very important that you learn how to read financial documents that companies release every year. Become familiar and research the leadership behind the companies you want to invest in too see if they are the kind of leaders that would steer the company in a direction that will make you investment grow. Finally, stay up to date on current events related to your investment industries and companies.

Investing requires a lot of patience and emotional control. If you want a big return in a short time, then you have to invest big, and usually these are volatile stocks that could go up or down at any given time. This type of investing strategy is usually reserved for those who can afford to loose a lot of money. Long term is the way to go for average folks who don't have lot's of free cash to invest.

Thank You So Much. Nancy O.

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Xavier’s Answer

I use an app called RobinHood. Very simple to use. I would advise starting with smaller investments while you learn.

Thank You. Nancy O.

This is a great tip and one I took as well as a college student; highly advise using Robinhood to start your journey! Romy Simeu

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Kyle’s Answer

I highly suggest reading Jim Cramer's Mad Money book - it teaches you how to invest from the very beginning. It will teach you how to do your homework, such as what to look for on the balance sheet (assets / debt) of the company you wish to buy.

As for trading platforms I would suggest TD Ameritrade. It is very simple to use and there are no fees.

Thank You. Nancy O.

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Krishna’s Answer

As someone who recently graduated last year and now has a steady income to invest, I'd be happy to share my experience. I personally use Fidelity as it has no fees and has a great platform to research investment opportunities from stocks to bonds to mutual funds. Your safest bet for the long run is to put money in a mutual or index fund. Do some research to find some you like. They move with the market, so are a great long term option for investing. Assuming you are fairly young, you have the opportunity to take some risks. This is also assuming you are not in major debt and don't need this money urgently. Do some research on stocks that are bullish within the market. Look at financial statements, press release, etc. to learn more about the company and their role in today's markets and buy a few stocks. I say start off small with a thousand or so dollars then increase that amount as you become more comfortable with you researching/investing skills!

Hope this helps! Good luck!

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Aaron’s Answer

Start by reading The Four Pillars of Investing by William Bernstein. If you're still not convinced that an investment strategy centered around total market index funds is the right approach, then read A Random Walk Down Wallstreet by Burton Malkiel. Once you're ready, sign up for an account on Vanguard.com and download their app. If you venture into the world of trading individual stocks, make sure you understand advanced topics such as asset allocation strategies to properly diversify a portfolio and eliminate unnecessary risk. Also watch out for hidden fees that can really cut into your returns over the long run. Happy investing!

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John’s Answer

Hi Nancy,

The App my sons use is called Acorns

This stock trading app was made for students to be able to invest, so the company offers the app for free for four years to any college student with a valid .edu address. My son says... It's the best one for those who have a little or no experience in the stock market.

Hope that helps

Thank You. Nancy O.

My Pleasure, Nancy Remember, the best investment you can make is in yourself first. John Frick

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Dexter’s Answer

Hi Nancy,

I highly recommend this book: "The Bogleheads' Guide to Investing" (https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0470067365 ). If you're strapped for money, They have a wiki page that goes over the topics with less detail than the book: https://www.bogleheads.org/wiki/Bogleheads®_investment_philosophy .

I came across and read the book two years ago, and I wish I had read it back 15 years ago. If I had, I'd have a more stable financial future, but really, it's never too late to learn and I was glad I read it. I think if you were to read the book now, you'd have such a large head start, so yeah, I really encourage you to read and learn the strategies that lead to repeatable success while investing.

Good luck!

--
Dexter

Thank you so much. Nancy O.

wow! What an excellent tutorial! Would have been nice to have had something like this to guide me in life! Kim Igleheart

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Melanie’s Answer

I've just started investing for the first time recently and I use the Robinhood app. It's a great platform for beginners and isn't too difficult to navigate! I would definitely recommend doing some basic research before you start. With COVID, now is a complex time to begin investing so make sure you understand what some of the impacts can be and how trends evolve.

Thank You. Nancy O.

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James’s Answer

Hi Nancy,

The first thing to do is to research and read about general investing, specifically learning about index funds would be most effective/efficient use of your time. Any reading from John "Jack" Bogle, aka the father of index fund investing , would be a great place to start.

I would avoid going down the path of picking individual stocks unless you want to spend a substantial amount of your time researching the market constantly. Think about it this way, often times investors try to "beat" the indices, such as the S&P 500, and often fail, so why not just own the index instead? With this said, I would recommend learning about index investing(low cost way to invest), figuring out what your financial goal will be from investing (making a big purchase in 5-10 years, retirement, general wealth building, etc.), and learning about the risk/return of different portfolio allocations(equity vs. bonds).

With this in mind, a robo-advisor might be a good choice to get started with investing. They typically charge very low management fees (about 0.30% give or take) and often don't require a lot of money to get started with. They will guide you through a questionnaire to assess your investment time horizon, what your risk tolerance is, and will create a portfolio allocation based on these answers you give. This is a great way to get past the fear of investing, as the questionnaire will help guide you to a portfolio that makes sense given your answers, and help avoid excessive fees from investing. There are many places that offer robo-advisor services, but the link below would be a great place to start.

https://www.nerdwallet.com/best/investing/robo-advisors

Thank You. Nancy O.

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Charles’s Answer

Good question. The world of investing can be seen as very complex, especially if you watch business tv channels. I would keep things very simple. If you invest money in stocks for example you are exposing yourself to an amount of risk for an expected amount of return. You can capture that risk/return via very simple stock investments (a broad based market index fund). Mutual funds are a better choice than ETFs. This type of investment is simple, low cost, and can take the emotion out of investing in individual stocks. The daily market swings of individual stock can really set you up for failure if you fall pray to thinking of it emotionally. If you think and remember that you are investing in individual businesses over the long term by holding a broad market based index fund, you will be setting yourself up for easier success and a much more stable ride than trying to pick stocks (the next winners).

Thank You. Nancy O.

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Craig’s Answer

Hi there,

I would start with education as you want to make informed decisions whenever you invest money, especially your own. I echo Daniel's recommendation of reading the Intelligent Investor by Benjamin Graham. Many renowned investing gurus, or just ordinary asset managers, consider this a must-read for any investor. You also need to have a solid understanding of accounting and finance as investment decisions made by professional managers/analysts are based on financial information. I also recommend reading websites such as the Economist, Wall Street Journal or Bloomberg as they all cover financial markets. Lastly, there are also many websites that produce free content on investing tips, news, trends and strategies.

There are many online trading platforms available for use as long as you meet certain criteria and the other comments have pointed out some of these platforms. For a new investor, I highly recommend selecting a low-fee or, even better, a no-commission platform provider.

Enjoy the journey,

Craig

Thank You. Nancy O.

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Steve’s Answer

I like to use tools like TDA or Fidelity for investing. These days the trades cost zero and you can make as many as you desire so long as you have the money in your account. Start small and consider using mutual funds like BND (Bond Fund)or FXAIX (Index Fund riding with S&P 500) for investments. If you want to take some risk try an ETF like JNUG (rides along with Gold) but always be careful and start out with small amounts. Study cause and effect and watch the new closely daily for events that may trigger your investments up or down.


Have fun investing!

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Eric’s Answer

I strongly recommend reading the book I Will Teach You To Be Rich by Ramit Sethi. He gives simple to follow to advice that will make investing automatic.

Thank You. Nancy O.

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Emma’s Answer

Hi Nancy,

I would recommend starting to read financial news and start to focus on specific stocks that interest you. Also, watching finance news programs are useful to give a high level understanding of what drives stock performance.

When it comes to actual investing I would recommend finding a platform that allows you to invest with fake money initially. When you start investing with real money I would recommend starting with small amounts of money and across a range of industries. I would also recommend focusing on larger well known companies which are lower risk rather than small companies that could offer larger returns but with more risk associated to them.

Make sure you diversify your investments when you do start investing so you reduce your losses if a stock you have invested in falls materially.

Emma recommends the following next steps:

Start reading the Wall Street Journal or other finance news to familiarise yourself with stocks and what drives changes in the stock prices.
Look for some free trading platform where you can learn more about investing without using your own money

Thank You. Nancy O.

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Alyssa’s Answer

There have been some great suggestions and I hope I can add to the list.

1. Read up! A book suggestion: "Unshakeable" by Tony Robbins- https://www.unshakeable.com/
2. Have a plan. What do you want to buy (stocks, indexes, mutual funds)? When will you sell? Are you a long-term investor or short-term? What risk level are you comfortable with and what kind of returns are you seeking?
3. Dollar-cost average your way into the market.
4. There are many investing platforms out there, find one that you like with excellent resources and commission-free trading (I use E*Trade).
5. Diversify your portfolio.
6. Research, research, research!

Hope that this helps you!

Thank You. Nancy O.

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George’s Answer

Learn the principles of investing before you invest. I personally read the Bogleheads forums. Great stuff for beginners, in my opinion. I am not a professional financial advisor.

Thank You. Nancy O.

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Luis’s Answer

Hi Nancy,

Buy a little bit of bitcoin every week, or every month.

For example, buy $10 of bitcoin every week. Or $50 every month. Whatever amount you're comfortable with.

Keep buying it at regular intervals, and as it grows and develops in the future, you'll see its dollar value change, and hopefully increase, over time.

Warning: do not invest more than you're prepared to lose. That applies to all investments and finances, not just when exchanging dollars for bitcoin.

Best app for buying bitcoin is Square's Cash App. The website is cash.app

All the best to you!


Thank You. Nancy O.

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Jason’s Answer

Hi Nancy,

You've already solved the hardest part of investing, which is starting! So congratulations on that.

I would recommend first visiting the site below. It's simple and straightforward and will provide information on a multitude or financial areas. Start with the "investing" section and follow the links in the article to address specific questions regarding risk tolerance, portfolio allocation, mutual funds, etfs and costs.

https://humbledollar.com/money-guide/main-menu/


Good luck!
Jason

Thank You So Much. Nancy O.

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Jason’s Answer

I think sticking to the basics is the best at first. I really like Dave Ramsey books, Rich Dad Poor Dad, and The Richest Man in Babylon. They give basic advise on paying yourself first, payiing down debt, and then start investing in areas you know or have researched thoroughly.

Thank You. Nancy O.

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Sandra’s Answer

You are smart for asking for advice about “How to invest.” The smartest advice I can give is start now—do not wait to get started.

Research MyMoney.gov is the federal government's website that serves as the one-stop shop for federal financial literacy and education programs, grants and other information. MyMoney.gov is available in English and Spanish.
https://www.mymoney.gov/mymoneyfive/Pages/mymoneyfive.aspx

MyMoney.gov presents Five Principles, including Earn, Save & Invest, Protect, Spend & Borrow.

EARN – Make the most of what you earn by understanding your pay and benefits.
SAVE & INVEST - It’s never too early to start saving for future goals such as a house or retirement, even by saving small amounts.
PROTECT – Taking precautions about your financial situation, accumulate emergency savings, and have the right insurance.
SPEND Be sure you are getting a good value, especially with big purchases, by shopping around and comparing prices and products.
BORROW – Borrowing money can enable some essential purchases and builds credit, but interest costs can be expensive. And, if you borrow too much, you will have a large debt to be repaid.

Research more about these principals at: https://www.mymoney.gov/mymoneyfive/Pages/mymoneyfive.aspx

Once you have done your initial research, confide in a confidant that you trust. Share your approach and how you will begin your investment strategy. (I would not suggest paying someone for advice.)

Think Long-Term—the more you invest today, the more you can save over the long-term for tomorrow. Compounded interest is the concept that your principal investment (as in a savings account) is the addition of interest to the principal sum of a loan or deposit. Simply stated, you make interest on interest. When you start saving young, the compound amount can make a big difference.

Make Your Investments Automatic—your investments should be automatically deducted from your paycheck. (If you never see the money, you will never miss it.) When you begin a new position, research whether the company offers a 401k. Many companies match up to a certain $ amount of your contributions. If possible, always invest the “match” amount—it is like free money. As you make more money, increase your investment amount.

Make investment goals reasonable—you want to feel good about your accomplishment. Make your initial savings /investment goal attainable then you will be positive about future investment opportunities.

Learning about the stock market—This is a more complex lesson when you understand the basics. I might select a few imaginary stocks and track their earnings, so you begin to understand risks and rewards. This is a good learning experience without taking actual risks and allows you to begin understanding risks and rewards.

Thank You. Nancy O.

Thank You. Nancy O.

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Daniel’s Answer

Hi Nancy,

I applaud your early conviction to begin investing. Consequently, you will enhance your exponential rewards that result from compound interest - which Albert Einstein once declared as the 8th wonder of the world. Even if your only investing a few dollars here and there, it's a good habit to start now & increase as your wages increases.

Read the following article to see the power of compound interest:
https://www.cnbc.com/2017/09/27/nerdwallet-charts-show-the-power-of-compound-interest.html

As for the right avenue to invest, there are many great apps & brokerages that tailor to different needs. For new investors with limited capital and experience, Robinhood is an excellent choice. They're brokerage platform is entirely mobile, and the app is very simple to navigate and understand. However, one of the most important advantages they provide is the ability to purchase fractional shares. This is absolutely necessary for anyone without a lot of cash to begin investing. With Robinhood you could buy a partial share in Amazon for $50, whereas other brokers require a minimum purchase of 1 share, which would cost around $3670 at Amazon's current market price. Furthermore, with Robinhood you won't pay any commissions or fees to open an account, transfer funds, or buy & sell investments.

As for where to start with investing. If you have little to no accounting/finance background, I recommend investing in the Vanguard S&P 500 ETF. It's stock symbol is VOO. It is essentially the 500 largest US companies put into one stock. Therefore, it diversifies your risk, and your returns will be based on how the broader US market performs. Another simple option for the time-being would be to choose companies you love and think will be around forever.

Once you learn more from the accounting and finance fields, you can begin analyzing quantitative and qualitative factors to make better informed decisions. But right now, the most important thing is just to start.

Even if you don't major in business, I would recommend taking at least one financial and accounting course. Khan Academy is also a great free tool to learn about these subjects. Finally, the Intelligent Investor by Benjamin Graham is a book that you can read now and re-read again as you become more familiar with investing. It is one of the best and most famous books about investing for experienced and inexperienced investors alike. It's about value investing and thinking long-term - which is exactly what you want. It is written by Warren Buffet's past teacher & mentor.

If you have any questions at all about investing, simple and complex alike, feel free to follow-up with me.

Thank You So Much. I appreciate it. Nancy O.

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Matthew’s Answer

A lot of great advice here on practical tools for investing, so thought I'd answer your question slightly differently. I think it's also important to develop an investing mindset, and there are a lot of good books out there to help you think about your money differently. I read a book called "Rich Dad, Poor Dad" in college that I found very helpful in shaping the way I think about my finances. It's not a book that'll teach you how to pick the right stocks or investment products, but it will help shape the way you think about investing and saving. It's also an easy read since the author inserts a lot of stories in the book (so it doesn't read like a textbook). Highly recommend it!

Thank You. Nancy O.

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Hongyun (Heley)’s Answer

1. Robot investing app/ platform/ software based on your risk profile.
2. Paper trading account could be used to practice before start trading with actual money.
3. Multiple free transaction fee brokage available, which all have educational content, rating reports, equity research reports, etc that could be used as an educational source.

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Satinderjeet’s Answer

Investing is great; however one need to be a little careful especially during these uncertain times.
Like Suze Orman says before doing any investments; make you have 8 months of emergency fund and all your debts including student and/or credit card etc. are paid off.
If your company matches you can put your money in SnP stocks of 401k. For what i know; Fedility.com has a hold on your investment option meaning let's say your invested stock are performing very low then Fidelity will freeze your money to get any below the threshold.
Or, you can also start with apps like Acorn or Robinhood. Take it slow, since markets are fluctuating and have patience even if returns are not that great. If you keep the stocks for long; usually you will get good returns.

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Sandra’s Answer

Great question!

An investment advisor for one of my clients recently told me about a blog called Mr. Money Mustache and I wish I would have known about it 20 years ago! He has great ideas about keeping investments simple and keeping our monthly expenses low. It's a great read.

I set up my investment portfolio based on the MMM recommendations and have been very happy I did.

Good luck!


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Sandra’s Answer

Great question!

An investment advisor for one of my clients recently told me about a blog called Mr. Money Mustache and I wish I would have known about it 20 years ago! He has great ideas about keeping investments simple and keeping our monthly expenses low. It's a great read.

I set up my investment portfolio based on the MMM recommendations and have been very happy I did.

Good luck!


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Victoria’s Answer

I would say read the book: "I Will Teach You How to Be Rich."

Invest in Index funds while you're young. The flashy investing is risky, why not work and make money passively through index funds.

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Estelle’s Answer

Look into mutual funds. These are led by professionals who study the market. They spread out your investments in order to reduce risk of loss. Some of the mutual fund companies offer financial counselors and advice on investing when you start and account.

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David’s Answer

Hi Nancy!

I'd recommend reading Tony Robbin's books Unshakeable and Money Master the Game. Both books have some overlapping concepts, but Unshakeable is a shorter version for people just starting and Money is more in depth.

Tony Robbins went to interview 50 of the top investors and distilled the topics into simple concepts, which cover common mistakes, general concepts, and actionable advice.

After reading it, I implemented having a certain investment allocation, using dollar cost averaging, and avoiding high expense ratio mutual funds. Also, I have confidence that the S&P 500 index (which is a group of American stocks) has never lost money over a longer time period. In other words, 100% of the time in history, all American bear markets have turned into bull markets, and that the performance has been around 7%. This gives me the confidence to hold stocks through downturns.

Not only that, I understand my financial goals much clearer, such as knowing whether you are at different steps of your financial journey (financial security, financial vitality, financial independence, etc..), and exactly how much you need for each stage, based off your spending habits and standard of living. It also gives you a concrete number to work for toward than just "more money".

Hope this helps!

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James’s Answer

Hi Nancy,

Great to hear from you. The best advice I can offer, and one that I've offered to my children, family members and friends, is simply to start saving. Do not expect to have excess cash at the end of the week/month to save. History shows that if you have the money in your hands, you will spend it. To prevent this, have a percentage of your paycheck taken directly out of your income and automatically transferred into a savings or money market account. If the money does not appear in your paycheck, you will not be inclined to spend it. I have heard this referred to as "pay yourself first". You can start out small with $5 or $10 each check and gradually increase the amount. The goal would be to save 10% of each check or higher as your income rises. Each time you receive a raise, take half of the increase and automatically add it to the savings account. This will allow for a bit more money to live on right now and a nice increase to your weekly/monthly savings.

Once you have built a comfortable savings account (the amount will depend on you, but make sure it's an amount sufficient to handle any unexpected costs or disruptions to your income), you can begin to invest in more aggressive opportunities like the stock market. In my opinion, the key is to start saving. Building up a cash account is easier than you might think and provides the foundation for a stable financial profile and future investments.

Hope this helps!

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Alex’s Answer

Hi Nancy,

Before even investing in stocks there are some other ducks you want to get in a row.

1. Budgeting and spending. 99% of people don't make their financial goals because they lack the discipline or will power to not spend money. For two months I recommend you do nothing but take notes of all of your expenses. After two months assess and determine where you have spent more money than you thought and categorize. From there make adjustments according to your debt and goals. Awareness is half the battle!

2. Debt. Do you have a plan for any and all debt and are you currently working towards paying it off? You may want to explore consolidating debt (if possible) and never default on Student Loans. Student Loans are owned by Uncle Sam, and unlike most other debt, it will follow you to your grave and not be written off.

3. Once the debt is in control, we need to work on emergency savings. The rule of thumb is 3 months of expenses. Note that expenses mean necessities, it doesn't mean your restaurant budget and/or going out budget (though COVID has made that difficult now).

4. Retirement. Now, we need to focus on 401K and IRA's. For these, you'll want to explore what your employer offers along with going through other means whether privately or through an investment company.

5. Stocks baby! This is the exciting part, but it's slow. To really make a splash in the stock market you need ~$5,000 to start with. Note with Acorns or Robinhood you can invest any amount, to really see gains in a time frame that isn't 30+ years you'll want to look at $5,000+.

Please note I am not a Financial Advisor but somehow who has a Financial Advisor, takes strong notes, and also have been successful so far with my personal finances.

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Rita’s Answer

My freshman in college started using Acorns to start investing your spare change. Get your feet wet and stay within your own budget and investment risk tolerance is key.

Thank You. Nancy O.

Thank You. Nancy O.

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Richard’s Answer

Keep in mind that a super-majority of day-traders/investors, even professionals but especially amateurs, lose money in the stock market. If the goal is making money, consider a broad-based ETF or index fund. If the goal is learning, start with the Intelligent Investor, Stocks for the Long Run, or reading about market efficiency. Similiarly, for investing, try Howard Marks' books (free pdfs abound online), which might require first learning about the basics of accounting. Remember, don't put more in than you're willing to lose, because most stock market investing is just gambling. Read up on low fee ETFs!

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Aditi’s Answer

There are great resources to learn how to invest. Setting up calls with industry professionals is a great way to hear more about how they got started. Robinhood is also a great app to start off on, it is very user friendly and will help you learn.

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Daniel’s Answer

The best thing you should do to begin investing is read as much as possible about it as you can. Yahoo finance and bloomberg are both two websites to look into. Setting yourself up for retirement is a great way to start, I suggest looking up and into what Roth IRAs, IRAs, and what a 401k is. The I suggest opening up an accountant with a free brokerage company such as vanguard, charles schwab, or Robinhood and starting small with your investments in low risk stocks or ETFs. An ETF is a bunch of stocks comprised into one investment, so there is even less risk. I hope this is helpful but the internet is your best resource and you should research as much as possible.

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Michael’s Answer

Congratulations on starting your investing journey. I suggest you take a look at the following advise to get started.

https://www.bogleheads.org/forum/viewtopic.php?t=19085

How To Get Rich

1) Make a lot of money
a. Get well educated AND learn a trade/job skills/a profession that pays well. It is much easier to have a high net worth when you have a high income
b. Don’t stop learning when you leave formal schooling
c. Work hard
d. Be willing to take reasonable risks
e. Consider being an owner rather than an employee

2) Don’t spend a lot of money
a. Start saving early. Remember that every dollar you save in your twenties and thirties is 8 times as valuable as one saved in your fifties
b. Don’t be all hat and no cattle
c. Rent your lifestyle (Don’t buy a boat, a time-share, a second house, a plane etc) Keep your fixed expenses low so when hard times come you can cut your lifestyle back rapidly
d. Realize that buying a house or cars that are too expensive for you will likely keep you from getting rich. The big things matter most
e. Be prudently frugal and selectively extravagant. Be sure that you are spending your money on the things you value most
f. If you can’t afford to pay cash for it, you can’t afford it. The only exception is a house (because it will generally appreciate at just over the rate of inflation), where the rule is if you can’t afford to put 20% down and use a 15 year fixed mortgage you can’t afford it
g. Marry well, marry once, marry someone who shares the same thoughts, or with whom you can work out an acceptable compromise beforehand, on “The Big Four” (Money, Religion, Kids, and Sex) and STAY MARRIED
h. Credit cards aren’t for credit; if you have paid interest at a higher rate than 3% or paid a late or over-the-limit fee more than once you shouldn’t use a credit card

3) Make your money work as hard as you do
a. Read at least one good basic personal finance book, one good investing book, and one good behavioral finance book. Consider Personal Finance for Dummies , The Boglehead’s Guide to Investing, and Why Smart People Make Big Money Mistakes and How to Avoid Them.
b. Get the market return; use fixed asset-allocation, index mutual fund investing as your default strategy
c. Minimize taxes. Know the basics of the tax code, max out tax-advantaged savings accounts, and use them to your advantage
d. Keep investing expenses low
e. Understand basic financial calculations and lingo. Understand compound interest, the time value of money, financial risk, and the expected rate of return of various financial assets. Know how to use the excel functions-FV, XIRR, PMT, PPMT etc
f. Simplify your financial life. Put bills on automatic payment and investments on automatic withdrawal. Minimize the number of accounts you hold and the number of investments you have as much as possible
g. Understand why your savings rate matters a lot when you’re young and very little as your approach retirement. Understand why your investment return matters little when you’re young, more as you approach retirement, and a great deal during your first decade after retirement. Understand the concept of a safe withdrawal rate
h. See the end from the beginning. If you fail to plan you plan to fail. Have a written investment plan you can refer to when contemplating portfolio changes.

4) Don’t lose your money
a. Insure well against catastrophe-Life, Disability, Health, Liability, Property but self-insure whenever possible using a safe, liquid emergency fund (High benefits/limits but high deductibles/ waiting periods). Self-insure against medical expenses by maintaining a healthy lifestyle. After you retire, consider a single premium immediate annuity to insure against outliving your money and long-term care insurance to insure against having an extended period of dependence at the end of your life. Don’t mix insurance and investments. Cash-value (non-term) life insurance and variable annuities are generally products meant to be sold, not bought.
b. Get rich once, get rich slowly. Good investing is boring investing
c. Hire professionals to teach you, not just to “do it for you.” This includes accountants, estate attorneys, real estate professionals, and investment advisors. Be sure to bounce the advice you’ve received off someone with no conflict of interest in the transaction, realizing that no one cares about your financial success nearly as much as you do. If you are reasonably well-educated and interested, you can teach yourself to do your own taxes, sell your own house, and invest your own money

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Tammy’s Answer

Most brokerages offer no-cost trading. I would read investing books, take business courses, google any questions you have, and reddit has great resources in r/investing and r/options.

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Vinesh’s Answer

Divide your money you save into 2 half's. Save 1st half in Savings bank like Ally Bank. Invest 2nd half in Vanguard Total Stock Market Index Fund. Invest monthly into the fund.

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John’s Answer

You cannot start investing too early! Not only is it a great way to learn about businesses and the economy, its a fun way to do so. I would recommend learning about a company before you invest in it, and do not invest much when your starting out. Learn what they do, how they do it, and what their financial position is. All of this is online or you can signup with TD Ameritrade, E Trade, or Charles Schwabb. By doing so you can learn about each company, their finances, worth, and view there stock price ranges over the last year. If you try it I think you will like it!

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Michael’s Answer

Hi Nancy,

Lucky for you, there has never been a better time to start investing when it comes to access and fees. RobinHood is a user-friendly app that allows “free” trading, although you should be mindful of any product that is marketed to a consumer as free. There’s a larger story behind their concept of free trading, but for the average user, it shouldn’t be a big consideration.

Once you have your preferred platform in place, to begin investing, you should start by doing nothing. By that, I mean you should be spending your time researching the companies or industries that interest you so that you know WHAT you are investing in. From there, you should pull up some historical charts to get a sense of where those companies/industries are currently trading when compared to historical valuations. Find an entry point that provides a good risk/reward proposition. Risk management is the most important concept for any investor (novice or professional). Understand your personal risk tolerance and only invest an amount that you would be comfortable losing. Lastly, maintain a positive attitude with a mindset of constant learning as markets are continually changing.

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David’s Answer

Hi,

I would pick one well known big company name, maybe something in FAANG... Thats Facebook, Amazon, Apple, Netflix, Google. Put a little bit of money first and follow. Once you are in and following, it would be easy to see when it goes up or dips. Once you see a dip (while there is not major bad news related to the company) add a little more, until you have a good position.

I would also look into ETFs, it is generally more stable since it is a bucket of stocks. I would go with etfs that holds major indices, like VOO for the SP500.

Once you have a good position on a couple big name stocks and etfs, you can then play around with more speculative stocks understanding there is a bigger risk.

Thanks

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Aditi’s Answer

There are great resources to learn how to invest. Setting up calls with industry professionals is a great way to hear more about how they got started. Robinhood is also a great app to start off on, it is very user friendly and will help you learn.

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John’s Answer

You cannot start investing too early! Not only is it a great way to learn about businesses and the economy, its a fun way to do so. I would recommend learning about a company before you invest in it, and do not invest much when your starting out. Learn what they do, how they do it, and what their financial position is. All of this is online or you can signup with TD Ameritrade, E Trade, or Charles Schwab. By doing so you can learn about each company, their finances, worth, and view there stock price ranges over the last year. If you try it I think you will like it!

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Jacqueline’s Answer

I have been using a very easy application called Stash. It is very easy to look up stocks look for what interests you or invest in some of their recommendations. You attach your bank account to it and set up how much money a week, or every 2 weeks or every month etc. and tell them how much you want to invest in each stock. I literally started with $10/week because I wanted to see if I could grow money in 1 month. Stash is reputable and online and in App form.

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Kennedy’s Answer

Hi Nancy,

There are a multitude of ways that you can start investing that are low cost and easy to do. For example, there are apps such as Robinhood or Acorn that are perfect for beginners. I would suggest starting with one of these apps. Once you feel like you got the hang it and you are ready to take the next step, you can talk with your bank about opening up a retirement account like a Roth IRA.

There are also several great books that you can read to get more information on investing and the different techniques used, such as "The Intelligent Investor", "A Random Walk Down Wall Street", and "The Richest Man in Babylon". My personal favorite is "The Intelligent Investor". It helped me immensely when I was first starting out on my investing journey.

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Steve’s Answer

I like to use tools like TDA or Fidelity for investing. These days the trades cost zero and you can make as many as you desire so long as you have the money in your account. Start small and consider using mutual funds like BND (Bond Fund)or FXAIX (Index Fund riding with S&P 500) for investments. If you want to take some risk try an ETF like JNUG (rides along with Gold) but always be careful and start out with small amounts. Study cause and effect and watch the new closely daily for events that may trigger your investments up or down.


Have fun investing!

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Hristo’s Answer

Hi, Nancy!

Great that you are thinking about investing. It can generate some great returns for you in the long run.

Before dive in the stock market, I would advise you to start small and slow. This means that start with some small amount of money which you will not regret if a stock market crash happens tomorrow not likely, but it has happened in the past). The great way to start is index funds. Vanguard 500 Index Fund ETF is great fund which tracks largest 500 companies in USA, but it actually covers the whole world because those companies operate on global scale.

I would recommend you this new book from a UK fund manager. He has fantastic track record and will provide you with the right mindset to find great companies which would generate great investment returns. Read it once or even twice if needed:

https://www.amazon.com/Investing-Growth-companies-anthology-investment-ebook/dp/B08L3W9KFZ/ref=cm_cr_arp_d_product_top?ie=UTF8

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