Investing 101: How to Start Investing With Zero Experience

If nobody in your family ever talked about investing, you're not behind — you're just early. Because you're reading this. Right now. Let's go.

The one thing you have to know first

Investing = buying tiny pieces of companies (stocks) or loans (bonds) and letting them grow while you live your life. The whole game is time in the market, not timing the market. The younger you start, the more compound interest does the heavy lifting.

I'm not kidding when I say it is so satisfying to watch the money you have invested grow over time without having to manually do anything with it!

Retirement first, always

Before you touch a brokerage account, use the accounts that come with tax bribes:

• 401(k) with employer match — IF your employer matches your contributions up to a certain percentage, that is free money
• Roth IRA — you contribute money you've already paid tax on, and it grows tax-free forever
• Traditional IRA — tax break now, pay taxes on it later

If you can only do one thing, do the 401(K) match. If you get a full match up to 4% and you're not contributing, your boss is literally trying to hand you cash and you're saying no thanks. The match is where it's at!

Opening your first Roth IRA

Pick one of these three brokerages. They're all free, all reputable, and you can't really go wrong with any of them:

• Fidelity — they have a great app
• Vanguard — they invented index funds (this is what I use)
• Charles Schwab — they have great customer service

The signup takes about 15 minutes. You'll need your SSN, bank info, and employer info. Yes it feels like a lot, but the process doesn't take long. Commit and do it anyway!

What to actually buy

Here's where people freeze. The good news: you don't have to pick stocks. Instead, you're going to be buying one of the most common financial products that millions of everyday people invest in. These financial products are called index funds. Index funds are baskets of stocks that contain a little of everything, so you're not investing into one company — you're investing in many companies throughout the whole economy

Beginner-friendly options:

• FZROX (Fidelity) — total US stock market, zero fees
• VTI (Vanguard) — same thing, ETF version
• Target date funds (like FDKLX for 2065) — one fund, auto-adjusts as you age

If you're overwhelmed, put everything in a target date fund. Truly. That's the whole strategy. Set the automatic contribution, close the tab, live your life.

The best portfolio is the one you'll actually leave alone.

What to ignore

• Your bank pushing you toward their high-fee mutual funds
• Crypto influencers with lambos who are trying to get you to invest in their coin or buy their course
• The urge to check your balance every day

What to do this week

1. Check if your job offers a 401(k) match. Contribute up to the match, minimum.
2. Open a Roth IRA at Fidelity, Vanguard, or Schwab.
3. Set up an automatic $25, $50, or $100 monthly transfer.
4. Buy a target date fund with it.

1. Elect to reinvest the dividends you are earning into your account. Dividends are payments of parts of a companies profits to shareholders. Reinvesting the dividends instead of choosing to receive them as direct payments could possibly help your investments in your accounts grow faster.

You just started investing. Welcome to the club. Future you is going to be so proud.