Investing for Beginners 101: Easy Actionable Tips - Fun Cheap or Free (2024)

Are you new to investing? Investing for beginners is not as tough as you think! Whether you're considering real estate, IRAs, stocks, or your crazy uncle John's “next big thing”, there are lots of ways to invest to make your money work for you. Learn ways you can prepare for your future — no matter your financial goals.

Investing for Beginners 101: Easy Actionable Tips - Fun Cheap or Free (1)

Do you ever get stressed out when you think about the future? What’s gonna happen? Do we have enough to retire? Can we pay for the kids’ college? Spending too much time in “what if” land can scare you to death if you let it! If you want to get started with preparing for the future, then consider investing.

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Investing allows beginners and pros alike to be proactive about your future rather than just letting your money sit in a savings account while hoping and wishing that it will result in more money later on. A word of caution before you begin: Investing, credit cards, and finances in general are very personal topics. Find what works best for YOU by researching the options available to you!

KNOW YOUR BEGINNER INVESTING GOALS FOR SUCCESS

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Ask yourself, “Why am I investing money?” You may wish to save money to purchase a house. Or, you might just want to have a financial cushion to handle unexpected expenses. Maybe you just want to plan for retirement and a trip around the world with your spouse in the future — there is no wrong answer! (Just bring us with you on your world tour, mmkay?)

The first thing to do before investing your money as beginners is to be clear about what your current goals are for your money. In clarifying your financial goals, here are a few important things to consider:

  • What is Your Current Budget Situation? – Our best advice is to make sure your family is financially secure before investing. Secure means that you have paid all pressing debts and built savings for emergencies. Once those things have been accomplished, then, by all means, invest!
  • How Much Can You Afford to Lose? – There's no telling how investments will do, so any money that you put into an investment shouldn't cause damage to your family finances in any way. If you will have trouble making payments in a given month because of investments or if you have to pull from savings to invest, then it’s best to avoid it. A good rule of thumb is that if your family would be in financial trouble if the investment doesn't pan out, then don’t invest.

Pro Tip: Money that you invest is gone FOR-EV-ER. Who else always pictures Squints from The Sandlot when they say that? Investment accounts are not easily drawn from in times of hardship or for everyday budget use. You should consider investment dollars as spent, and never look back. If that thought strikes fear in your heart, reconsider whether you are ready to invest that money.

INVESTING FOR BEGINNERS 101 – WHAT ARE YOUR OPTIONS?

There are SOOOOOO many options available for investing your money that it can make your head spin — especially when you're investing beginners. It can be difficult to make heads or tails of all the options — let alone decide which is best for you. Here are some research resources that we’ve used:

Spend some time BEFORE you reach out to an advisor or make investment decisions based on what’s available to you. You will know based on your goals which options you are interested in and which ones scare you to death! Go with your gut and continue down the path of what speaks to you.

FOR BEGINNERS: CHOOSING THE RIGHT INVESTMENTS

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Once you have decided on your financial goals and learned the basics, it’s time to pick the best investment options for you. Here are a few basic questions to ask yourself as beginners to help you make the best decision for your family:

  • How Quickly Can You Get Your Money Back? – Stocks, bonds, and shares in mutual funds can usually be sold at any time, but there is no guarantee you will get back all the money you paid for them. Other investments, such as limited partnerships, often restrict your ability to cash out your holdings.
  • What Can You Expect to Earn on Your Money? – While bonds generally promise a fixed return, earnings on most other securities go up and down with market changes.
  • What Type of Earnings Can You Expect? – Yes, this IS different from the last question. Will you get income in the form of interest, dividends, or rent? Some investments, such as stocks and real estate, have the potential for earnings and growth in value. What is the potential for earnings over time?
  • How Much Risk is Involved? – With any investment, there is always the risk that you won't get your money back or the earnings promised. There is usually a trade-off between risk and reward: the higher the potential return, the greater the risk.

It can be difficult to go it alone when making investment decisions. Again, we highly recommend seeking out the help of a trusted financial advisor for advice on your particular financial situation. Seriously — you can do it alone — but WHY would you when it comes to your money?

A FEW MORE THINGS FOR INVESTING BEGINNERS TO CONSIDER

Yay, you! You’ve started investing for your family and things are going swimmingly. Once you are solid on the basics, there are a few extra things to consider to make sure you're set up for long-term success:

  • Are Your Investments Diversified? – Putting your money into a variety of investment types can help to reduce your overall risk and secure your cash. Some investments perform better than others in certain market situations.
  • Are There any Tax Advantages to a Particular Investment? – Does anybody really want to give all their money away to Uncle Sam? Look into investment tax breaks. For special goals like paying for college and retirement, tax-deferred investments are available that let you postpone (or even eliminate) the payment of income taxes.

Investing in your financial future is a very important and personal decision. While we hope you find our tips useful, we are NOT professionals. It’s worth repeating: you should always seek the help of a qualified advisor to make decisions about your money.

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Looking for more great ways that you can take charge of your family's finances? Don't forget about our AMAZING online budgeting program,Budget Boot Camp! It's a super fun video program that makes money easy to understand.

Looking for more advice on improving your family finances?

  • See our viral “7 Bank Accounts Every Family Should Have” post
  • How to get started with a budget if finances are tight
  • Learn 55+ ways to save extra money

Cheers to your future!

Investing for Beginners 101: Easy Actionable Tips - Fun Cheap or Free (2024)

FAQs

How much money do I need to invest to make $1000 a month? ›

A stock portfolio focused on dividends can generate $1,000 per month or more in perpetual passive income, Mircea Iosif wrote on Medium. “For example, at a 4% dividend yield, you would need a portfolio worth $300,000.

What is the 1 rule of investing? ›

Warren Buffett once said, “The first rule of an investment is don't lose [money].

How to start investing 101? ›

  1. 8-Step Guide to Investing in Stocks.
  2. Step 1: Set Clear Investment Goals.
  3. Step 2: Determine How Much You Can Afford To Invest.
  4. Step 3: Determine Your Tolerance for Risk.
  5. Step 4: Determine Your Investing Style.
  6. Choose an Investment Account.
  7. Step 6: Fund Your Stock Account.
  8. Step 7: Pick Your Stocks.
May 20, 2024

What is the simplest thing to invest in? ›

7 easy ways to start investing with little money
  • Workplace retirement account. If your investing goal is retirement, you can take part in an employer-sponsored retirement plan. ...
  • IRA retirement account. ...
  • Purchase fractional shares of stock. ...
  • Index funds and ETFs. ...
  • Savings bonds. ...
  • Certificate of Deposit (CD)
Jan 22, 2024

How to turn $100 dollars into $1,000 in a month? ›

10 best ways to turn $100 into $1,000
  1. Opening a high-yield savings account. ...
  2. Investing in stocks, bonds, crypto, and real estate. ...
  3. Online selling. ...
  4. Blogging or vlogging. ...
  5. Opening a Roth IRA. ...
  6. Freelancing and other side hustles. ...
  7. Affiliate marketing and promotion. ...
  8. Online teaching.
Apr 12, 2024

How much will I make if I invest $100 a month? ›

Investing $100 per month, with an average return rate of 10%, will yield $200,000 after 30 years. Due to compound interest, your investment will yield $535,000 after 40 years. These numbers can grow exponentially with an extra $100. If you make a monthly investment of $200, your 30-year yield will be close to $400,000.

What is the golden rule of investment? ›

Start investing early.

The earlier you invest, the more time your money has to grow into a nice sum. Starting early takes advantage of compound interest — the name given to the returns you make on money that you previously earned as interest. In other words, your money earns returns on its returns.

What are Warren Buffett's 5 rules of investing? ›

A: Five rules drawn from Warren Buffett's wisdom for potentially building wealth include investing for the long term, staying informed, maintaining a competitive advantage, focusing on quality, and managing risk.

What is the golden rule of wealth? ›

1. Earn More Than Your Spend. Regardless of how much money you make, if you never save any of it, you will never build up any substantial amount of wealth. It is not how much you make but how much you keep that matters.

How to start investing for dummies? ›

A beginner's guide to investing in the stock market
  1. Decide your investment goals.
  2. Select your investment vehicle(s)
  3. Calculate how much money you want to invest.
  4. Measure your risk tolerance.
  5. Consider what kind of investor you want to be.
  6. Build your portfolio.
  7. Monitor and rebalance your portfolio over time.
Sep 27, 2022

How do I start investing for the first time? ›

Here are five steps to start investing this year:
  1. Start investing as early as possible. Investing when you're young is one of the best ways to see solid returns on your money. ...
  2. Decide how much to invest. ...
  3. Open an investment account. ...
  4. Pick an investment strategy. ...
  5. Understand your investment options.
Feb 26, 2024

How do I start investing with a little bit of money? ›

Best investments for beginners
  1. High-yield savings accounts. This can be one of the simplest ways to boost the return on your money above what you're earning in a typical checking account. ...
  2. Certificates of deposit (CDs) ...
  3. 401(k) or another workplace retirement plan. ...
  4. Mutual funds. ...
  5. ETFs. ...
  6. Individual stocks.
Jul 15, 2024

What is the first asset to buy? ›

A good piece of advice to investors is to start with simple investments, then incrementally expand their portfolios. Specifically, mutual funds or ETFs are a good first step, before moving on to individual stocks, real estate, and other alternative investments.

What is the least risky thing to invest in? ›

Overview: Best low-risk investments in 2024
  1. High-yield savings accounts. ...
  2. Money market funds. ...
  3. Short-term certificates of deposit. ...
  4. Series I savings bonds. ...
  5. Treasury bills, notes, bonds and TIPS. ...
  6. Corporate bonds. ...
  7. Dividend-paying stocks. ...
  8. Preferred stocks.
Jul 15, 2024

What is the safest investment with the highest return? ›

The concept of the "safest investment" can vary depending on individual perspectives and economic contexts, but generally, cash and government bonds, particularly U.S. Treasury securities, are often considered among the safest investment options available. This is because there is minimal risk of loss.

How much will I have if I invest $500 a month for 10 years? ›

What happens when you invest $500 a month
Rate of return10 years20 years
4%$72,000$178,700
6%$79,000$220,700
8%$86,900$274,600
10%$95,600$343,700
Nov 15, 2023

How to realistically make $1,000 a month? ›

Here are some realistic options!
  1. Freelance writing. Becoming a freelance writer is a lucrative way to produce extra income. ...
  2. Virtual assistant. If you're an organized person, then you could excel as a virtual assistant. ...
  3. Online English tutor. ...
  4. Data entry. ...
  5. Proofreading. ...
  6. Blogging. ...
  7. Social media manager. ...
  8. Resume writer.
Mar 19, 2024

How much money do I need to invest to make $2 000 a month? ›

Earning $2,000 in monthly passive income sounds unbelievable but is achievable through dividend investing. However, the investment amount required to produce the desired income is considerable. To make $2,000 in dividend income, the investment amount and rate of return must be $400,000 and 6%, respectively.

How much money do I need to invest to make $500 a month? ›

To generate $500 a month, you might need to build your investments to $150,000. Taking out 4% each year would amount to $6,000, which comes to $500 a month.

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