When I was 11, my uncle told me…
“Kevin you need to invest. You’re losing your money by leaving your money in a bank.”
But did I care? Hell no. At the time, I was into Pikachu and Nickelodeon cartoons. WHY ARE YOU TELLING ME THIS?
How I felt when I was starting to invest
Even though I wasn’t interested, he still gave me $500 to invest with. I still remember going to Fidelity and putting all my money into an “aggressive growth” fund.
Three years later? There was only $100 left. Fuck.
No one wants to lose money. No one wants to look stupid. So we tell ourselves we just need to figure it out one day.
Sounds great. What’s the problem?
One day never happens
I googled searched and screenshoted Investopedia for you. You’re welcome.
OMFG. Where do you start?
Sometimes the problem isn’t the lack of information. It’s that too much information overwhelms us and we get paralyzed. Because there are so many ways to invest, you get responses like this.
How many of you guys feel like this?
So what is the right choice?
Pick the simplest method and tweak things as you go along. For me, I’m not trying to be the Wolf on Wall Street. Investing is just a tool.
I want an investment that is…
Low start up cost + time efficient + decent return/ROI
AKA A GOOD DEAL
What Chinese person can resist a good deal?!?
Today is your lucky day. I’m going to show you how to start with my favorite investment… index funds.
How to get started investing in 3 steps
Step one: Figure out how much money you have
Excuse my really shitty drawing
The more money you have, the better opportunities you have to invest with. Only problem? Not all of us have $10k lying around… so we have to work our way up.
But before we continue, I know what you’re thinking …WTF is an index fund?
Bam. Did the google search for you.
It’s basically buying small amounts of stock from the top 500 companies. It’s diversified and a mudda paaking good deal.
So I first started with my Fidelity account and invested into index funds. When I hit $3000, I transferred my money into a Vanguard account. Why? Lower fees and better performance. Finally when I hit $10,000, I was able to purchase the Vanguard Admiral shares (even lower fees).
It wasn’t overnight, but progressively I moved up. The more money you have, the better opportunities you have for investing.
Step two: Open your account
Really opening account is as easy as clicking this:
You have a few options. You can either open up a…
- Retirement account (Traditional, Roth IRA, etc…)
- Taxable account
I have all three. What should you do? Ramit does a good job at explaining the differences.
What I did: When I didn’t have a 401k, I opened up a Roth IRA and maxed out my contribution. If I had extra money, I would throw it into a taxable account. That way I was covering my ass for retirement and if I need money before retirement.
Step three: Automate your investments
This is probably the most important step… especially for those of us who are lazy.
Pick an amount you’re comfortable with and each month automatically invest directly into the index fund. It doesn’t matter if it’s $10 or $1000. You can always adjust later down the line.
Start as soon as possible and optimize later
Investing is like fitness. The best workout/investment is the one you’ll actually stick with.
As you accumulate more money, the way you invest will change and the more investment opportunities you’ll have. Maybe it’ll be real estate, individual stocks, or peer to peer lending. It doesn’t matter.
Just remember investing is not like getting a tattoo or having a kid. There’s no life long commitment. At the end of the day, you can always stop contributions and cash out your investments if you feel like it’s not for you.
So to the people who still need to figure it out, just remember…if you do nothing, you’re already losing to inflation. What are you waiting for? Make your money work for you.
Kevin
Disclaimer: This is pretty basic investing. Obviously you should talk to your financial advisor, but hopefully this article shows you how easy it is to start investing. The most important thing is to just take action ASAP and start building momentum.
Been wanting to invest for awhile now, just got out of high-school and I’ve saved about $1,500 in my savings just for extra cash which I want to put into stocks and now this motivates me even more. Thanks RH!
Love this, very informative and entertaining read.
I have to super agree with this article. Even Warren Buffett has been quoted saying he will leave his personal fortune behind in index funds for his family.
One thing to note before you get into index funds is think about your investment horizon a.k.a when you’re going to need that money. If you know you’re going to need money to buy a house in 3 years, you might want to invest in a more liquid ETF so you can convert that back into cash when you need it.
Make sure the financial adviser you talk to if you do ask one, is a fiduciary. They are legally obligated to tell you this. This is important because they are not necessarily going to work in your favor; however, a fiduciary is.
How the fuck r u telling kid to invest in the stock market at near all time high. For all the young kid here learn how to short the market. Don’t be a sheep bull make money bear make money sheep and slaughter.
…and tell me this. How is a kid supposed to figure out how to “short the market” when they don’t even know how to get into the market?
See the thing is investing is just a tool for a lot of people. They don’t care and want to deal with the headache of timing the market. Maybe they want money to buy a house, pay for college, and take care of their parents. For majority of people, dollar cost averaging is great to start out with and they can always change strategy later.
If you can time the market great, but a lot of people can’t and fail at it. Instead of telling my readers “OH don’t be a sheep”, maybe you should write your own article about it. I’m sure they would love it.
Btw when Future said “fuck up some commas”, he didn’t mean in your writing.
I honestly cannot thank you enough. After reading this article and looking at my bank account I’ve “turned my life around” and started going for broke by investing in stocks. Best decision I’ve ever made in my whole entire life. At first I invested in a company that was going downhill so I bailed (XGTI/XGTIW). But with what money I had left, (mind you, I started at $200). I invested into SPHS after a little bit of research, bought in at $3.60 and now it’s on it’s way to $10. I’d like to say again that I cannot thank you guys enough, both you and Joe for changing my life for the better.
Hi Kevin,
I’m currently a 4 th year college student who’s receiving FAFSA but I want to invest my money into stocks. Will this affect me in terms of receiving financial assistance for school?
Thank you,
Christina
Most likely not. You’re probably not going to be a millionaire overnight… and if you do that’s a good problem to have 😛
Thank you for the response!!
How do you feel about investing into bitcoins??? The new money currency technology thingy