How do you start investing?


Quick Answer

Before you begin investing, establish an emergency fund that can carry you through six months of unfortunate circumstances. Then begin investing by setting your investment goals, researching investments, opening a brokerage account and building a portfolio.

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Full Answer

  1. Establish an emergency fund

    Make sure you have enough savings on hand to carry you through investments. An emergency fund should contain six months of income and should be placed in a low-risk account that can be accessed easily.

  2. Set your investment goals

    Your investment goals are likely to differ depending on your stage of life. Decide whether you want to invest to plan for retirement, purchasing a home, putting children through college or other reasons.

  3. Research investment strategies

    Learn about different types of investments, including stocks, bonds, mutual funds and real estate. As a beginning investor, avoid high-risk or complicated investment options.

  4. Open a brokerage account

    Choose between a full-service brokerage account, which offers investment advice, or a discount brokerage account, which handles your investments based on your instructions but provides no advice. Some accounts require minimum investment amounts to get started.

  5. Build your portfolio

    Consider having a specified amount of money transferred into your investment account monthly to fund your investments. Once you put money into an investment, do not take it out to pay everyday expenses.

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