Simple Ways to Start Investing in Stocks Now

The first time I opened a 401k I had no idea what I was doing, but I was lucky to have a very kind coworker who encouraged me to sign up. Next, he helped me get started by coming over to my computer and walking me through it. Today I want to simplify how to start investing for beginners. In addition, I will share recommendations for a few favorite books of mine that can be valuable resources for your personal finance journey and make it less overwhelming.

Certainly, the problem many of us have with starting something new is that we have little to no foundational knowledge, so we become overwhelmed. As a result, we don’t start! These steps may seem almost too simple, but we are just looking to get started here. Here is a simple way to get started with investing in stocks now!

How to Invest in the Stock Market for Beginners

Step 1: Open an Account with a Brokerage Firm

First, you need to get an account. If your employer offers you a 401k and you are not enrolled, you could start there. This is a great way to begin investing if they offer a match. Or, you can also open one yourself at any of the popular brokerage firms out there like Fidelity or Vanguard. Additionally, if you qualify for one, you could start investing with a Roth IRA.

Don’t get into decision paralysis here with picking a brokerage firm. Popular firms offer pretty similar functionality. Although, you’ll want to know which type of account you are looking to open.

Step 2: Fund the Account

There are multiple ways to handle funding your investment account. You can begin by using your preferred method.

Make a One-Time Contribution

The next thing to do is to put in some money to fund the account so that you can buy stock. This typically involves setting up your payment method and bank verification.

Set a Contribution Amount

If you are setting up your 401k, you will set the contribution amount you’d like to have come out of your paycheck. Keep in mind that you can always change this amount later. For this reason, don’t stress about it too much and instead focus on getting started. It’s important that you just start. Setting it to the company match is a great place to start if you can afford to invest that amount.

Automate It

Next, you can think about setting up some automation by budgeting each month for a specific amount and having it automatically withdrawn to purchase your desired investment options. Depending on the account you are setting up and the selected funds, you may be able to do this. For example, if you are opening a Roth with Vanguard, then you might want to have it automatically deduct $50 once a month to fund the account and buy VTSAX.

Step 3: Pick Investment Options

Next, you will select your investment options. This step can seem really difficult since there are so many options. If have 401k with your employer, there is most likely a limited number of funds that are available in your plan, which makes it less daunting. They may have target-date funds, which are based on the year you plan to retire. This is probably the simplest way to enroll and start investing, but index funds and exchange-traded funds (ETFs) are great places to start too.

You should do what you feel is best for you when deciding on the stock you want to first buy to begin building your portfolio. If you feel overwhelmed by this and don’t really want to learn about picking investments, hiring a professional is always a good option!

Step 4: Read Investment Books to Figure Out Your Personal Investing Strategy

After you open the account and set it up, you can continue to learn and research. Below I’ve listed some of the most popular books that might help you as you start investing, most of which I’ve read. If you don’t have time to sit down and read, I recommend audiobooks as that is how I do a lot of my “reading”!

The Little Book of Common Sense Investing

The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns by John C. Bogle is a great book for learning about investing with low-cost index funds. This book convinced me to simplify my portfolio into this approach.

A Simple Path to Wealth

If you are looking to learn more about investing, then A Simple Path to Wealth by J L Collins is for you. A Simple Path to Wealth is the perfect book to learn about investing with index funds. Index funds are a really easy way to have a simplified portfolio. This book will help you figure out what to pick in your investment accounts, such as your 401k or Roth IRA.

The Intelligent Investor

Once you’ve read the above books, then I would look to The Intelligent Investor to get more breadth and depth.

This is one of the top-rated investment books!

The Automatic Millionaire

This is a great book for everyone! This book literally tells you what to do, and it isn’t very long so you can read it quickly. If you are just starting, then I would say The Automatic Millionaire is well worth your time and a great place to start! By the time I read this book, I was already doing the majority of the items in this book. With that said, it was still worth my time.

Rich Dad Poor Dad

This is the only book on this list that I have not read. However, I added Rich Dad Poor Dad because so many people recommend this book.

The Millionaire Next Door

I’ve read The Millionaire Next Door is one of those books I’ve read numerous times. It’s also a motivational book and helps shift your mindset. I have the audiobook so every once in a while, I’ll listen to it again.

What are your favorite investment books? How did you get started with investing? Post a comment below.

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