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Have you ever wanted to start investing but didn’t know where to begin? If so, this blog post will teach you how to invest by yourself. We’ll go over the types of investments out there and the best way to get started.

How Do I Teach Myself to Invest?

To teach yourself how to invest, learn about investing options available to beginning investors — all have advantages and disadvantages. Additionally, think about your goals for investing to help determine the best investments for you.

Some people like to invest long-term, while others may want to make money quickly with short-term investments.

Can You Learn to Invest Money?

young woman professional business investing

Yes, you can learn to invest money. A wide variety of websites, investing courses, and investment books for young adults explain the basics of stocks and how they work.

You could also talk with an investing professional or look for an online investing course from an expert you trust.

Investing money is more straightforward than it seems. You only need to learn investing basics to get started building a strong portfolio that will grow over time.

You need to decide:

How much to invest (set a recurring budget)

A recurring budget is a great way to figure out the amount of money you can afford to invest monthly or yearly. This type of budget breaks down your income and expenses into categories that repeat monthly or yearly.

A budget makes it easy to see how much you have left over to invest. This information can help make better investment choices and keep you from overspending.

Your investing goals (short-term vs. long-term)

One of the most important steps to learning how to invest is figuring out your goals. Do you want to focus on short-term gains or do you have more time in mind?

Each approach has advantages and disadvantages, so it’s important to get some investing education to understand what works best for you.

How to allocate money to suitable investments aligned with your risk tolerance

looking at statistical graphs, loan review check, financial balance, stock footage

When you’re starting, it’s important to choose investments aligned with your risk tolerance. You don’t want to make investments that make you nervous every time the market takes a dive.

At the same time, you don’t want to put all your eggs in one basket either.

A few things you can do to determine your risk tolerance.

  • Consider your age and retirement goals. Younger investors can afford to take on more risk because they have more time to recover from any losses. Older investors may want to consider less risky options so they don’t run out of money in retirement.
  • Look at your overall financial picture. How much debt do you have? What’s your net worth? What does financial freedom look like to you? These are all important factors to consider when choosing investments.
  • Decide what you’re comfortable with losing. No investment is without risk, so be aware of how much risk you’re willing to take before making any decisions.

Once you know your risk tolerance, it’ll be easier to find investments that match your goals.

Related: Best High-Yield Investments [Safe Options Right Now]

Open investment accounts (retirement and traditional brokerage accounts)

woman investing online software platform

You can’t invest without a brokerage account, but you can open one with most major financial institutions. You can also open a retirement account on your own or through work.

To open a traditional brokerage account, you will need to provide some personal information, contact details, and make your first deposit to purchase your investments.

Track investments over time and make adjustments as needed

Track your money invested over time and make adjustments as needed.

This will help you stay on top of your portfolio and ensure it is meeting your goals. Use various stock tracking apps and tools such as online tracking platforms or even simple Excel spreadsheets to track your investments.

Keeping tabs on your investments ensures optimal performance and adjust if necessary. You’ll have more confidence in your investment strategy and feel better prepared for the future.

Decide How to Invest in the Stock Market

smartphone investments

Of course, there is more than one way to invest in the stock market. For example, you can become an active investor, invest on your own with index funds, passive investing with robo-advisors, or a combination of all of the above.

Here is a little more information on each investing type.

Active Investing: Investing in Individual Stocks

Active investing is a form of investment management where the investor or fund manager at a financial institution takes an active role in selecting and managing the investments.

This contrasts with passive investing, which involves buying pre-determined investment instruments such as mutual funds and exchange traded funds.

In contrast to buy and hold investors, active investors typically strive for both capital gains and/or dividend income.

Active investing usually requires more frequently buying and selling securities than passive investing.

Because it generally entails greater risk, individuals or online brokers who believe they can add value over time through stock picking, market timing, sector allocation, or other security selection strategies are often active investors.

Invest On Your Own: Investing in Index Funds (ETFs and Mutual Funds)

young woman office building call

You can also invest on your own with mutual funds, a type of investment vehicle that pools money from many investors to invest in a variety of assets. The goal is to provide investors with a diversified portfolio.

Mutual funds come in different varieties, including those that focus on specific types of investments (e.g., real estate),regions (e.g., Asia), or investment styles (e.g., value investing).

Exchange-traded funds are similar to mutual funds, but they are bought and sold on a stock exchange. ETFs have become very popular in recent years because of low costs and tax efficiency.

They also offer investors exposure to a wide range of asset classes, including stocks, bonds, commodities, and currencies.

Index funds are a type of mutual fund that follows a predetermined index. For example, an S&P 500 Index fund would follow the same investment mix to mimic stocks in the S&P 500 index.

Passive Investing: Robo-Advisors

Cheerful business woman taking notes in notebook when having coffee in cafe

Finally, investing with robo-advisors is similar to passive investing but uses automated software for portfolio management instead of human managers.

Robo-advisors can be less expensive than traditional advisors because they do not require paying for active management.

Plus, all you need to start is a small amount of money to open an account. Most robo-advisors don’t have any minimum balance requirements.

The biggest appeal of robo-advisors is they charge relatively low fees, typically around 0.25% of your total portfolio value each year.

This may seem like a lot, but it’s actually less than the average fee charged by traditional financial advisors (which can be as high as one percent).

And, since robo-advisors invest in low-cost index funds, you’ll likely pay less in fees than you would with a more expensive actively managed fund.

To get started, learn about the best robo-advisors available today. Once you choose one, you will need to provide some basic information about yourself, including your age, investment goals, and risk tolerance.

Then, based on this information, the robo-advisor will create a custom investment portfolio for you.

If you’re unsure about getting started or the type of investments right for you, don’t worry. Most robo-advisors offer in depth tutorials and customer support to help you every step of the way.

And remember, you can always change your investment strategy later.

Related: 10 Best Non-Stock Investments [Alternatives to the Stock Market]

Related Questions on Stock Market Basics

How Much Money Do I Need to Start Investing in Stocks?

The amount of money you need to start investing in stocks varies depending on the type of brokerage account you open.

A regular brokerage account may have a minimum deposit requirement of $500 or more, while an IRA may require a smaller minimum investment, such as $100.

However, remember you don’t need to invest a lot of money at once; many investors begin with just a few hundred dollars. You can also spread your investment out over time to make it more manageable.

If you’re looking for ways to save for your initial investment, consider setting aside some money each month until you reach your goal. These days you can even buy partial shares for as little as a few dollars to own part of a stock.

Related: How to Get Free Stocks for Signing Up: 16 Apps w/Free Shares

How Much Money Should I Invest in Stocks?

How much money you should invest in stocks depends on your financial goals, time frame, and risk tolerance. For some people, it may be best to set aside a certain amount of money each month until they reach their goal.

If this is your first time investing, it may be best to start out with a smaller amount and continue building your portfolio in the future.

Ultimately, there’s no one right answer to this question. Your situation plays a big role in determining how much you should invest, but below are some guidelines for new investors looking to get started.

If you have a 401k or other employer-sponsored retirement accounts, contribute the maximum amount your company will match. This is free money, so take advantage of it. After that, you can begin investing in stocks on your own.

As a new investor, consider investing around 5%-25% of your income. If you’re investing in stocks, here are some other things to consider:

  • The more money you have saved in a liquid emergency fund, the more easily you’ll be able to weather market downturns without needing to sell investments when prices drop.
  • Paying down any high interest debt will help free up cash flow that can then go toward investing and building wealth over time.
  • The more money you invest, the greater your chances of achieving your financial goals sooner rather than later.

Related: Best Commission-Free Stock Trading Apps & Platforms

What Percentage of My Monthly Income Should I Invest in Stocks?

Again, there’s no one right answer to this question. But as a general rule of thumb, beginner investors getting started can consider investing 5%- 25% of their monthly income into stocks.

This gives exposure to the market while also ensuring they’re not taking on too much risk.

Also consider other long term wealth goals, like buying a home, paying down student loans, or traveling the world.

Decide how stock investing fits into your overall plan for your future.

Ultimately, try to strike a balance between using your money for investing and achieving other personal goals.

What is Micro-Investing and Is it Worth Investing in Small Amounts?

Micro-investing is the act of investing small amounts of money into stocks and other investment vehicles. This can be a great option for people who are new to investing or don’t have a lot of money to spare.

One of the best things about micro-investing is that it allows you to start building your portfolio and gain access to the market without making a huge initial investment.

In many cases, you can get started with as little as a few cents. And since most investments earn compound interest over time, even small contributions can add up to returns in the long run.

After all, a few cents is real money you can use to grow wealth.

To get started with micro-investing, simply sign up with one of the many reputable online brokers like Acorns.

This type of service allows you to invest small amounts automatically. (As always, make sure to do your research before investing in any company or product.)

Are Stocks a Good Investment for Beginners?

There is no simple answer to this question. Some people believe that all beginning investors should invest in stocks, while others think beginners should invest in mutual funds like index funds or exchange-traded funds (ETFs).

Mutual funds allow you to spread your risk over several different securities, which can be a more conservative route for new investors to get started in the stock market.

However, if you have some experience under your belt or you’re willing to research, it’s ok to begin picking your own stocks. Just be sure to understand the risks involved and never invest more money than you’re willing to lose.

No matter what route you choose, it’s important to have realistic expectations about the potential rewards and risks involved in investing.

Do I Need to Research Investments?

If you’re investing in individual stocks, yes. It’s important to do your own stock research before investing in any company.

This includes reading the company’s financial reports, evaluating its competitive landscape, and understanding how much debt it has.

If you’re investing in mutual funds or ETFs, there is less need for individualized research since these products are designed to be diversified across many different securities.

However, it’s still a good idea to understand what kind of companies the fund invests in and the overall investment strategy.

No matter what kind of investment you’re considering, it’s always a good idea to read unbiased reviews and conduct your own research before making any decisions about the funds themselves and the brokerage firms too.

Also, don’t forget that index funds through a robo-advisor can handle the difficult asset allocation decisions in exchange-traded fund or mutual fund options and put you on a path to realize your investment goals.

If you’d like to add some greater performance potential, consider an award-winning stock picking service like the Motley Fool.

Related: Best Stock Investing Research & Analysis Websites

How Long Should I Invest?

To answer this question we have to consider your investment horizon.

Although there isn’t a one-size-fits all approach, the general rule of thumb is that younger investors should have longer horizons and can take more risk while older investors need shorter ones because they’re closer to retirement age.

If you feel comfortable investing for short-term goals (less than five years), then stocks may be right for you. If you prefer long-term goals you don’t have to actively manage, index funds might be best.

What Is the Smartest Way to Invest in the Stock Market?

Any of the above are smart ways to invest if it keeps you invested for long periods of time. A heavy mix of index funds and perhaps some strong individual stocks could provide market-beating returns through cost-effective brokerage services.

Also, using a robo-advisor to handle the majority of your money in a diversified portfolio is another great way to invest.

Consider investing in stocks likely to outperform the market selected through services like the Motley Fool’s Stock Advisor and Rule Breakers.

Open a Brokerage Account that Meets Your Needs

Open a brokerage account in a few simple steps. Most importantly, open an account with a reputable and trustworthy firm.

Here are some things to consider:

Low-cost vs. full-service brokerage

Consider a few things when choosing between low-cost and full service brokerage firms.

One consideration is how active you are as an investor. If you plan to make frequent trades, a low-cost broker may be the best option. If you are looking for more guidance, a full-service broker may be a better fit because they can serve as an investment advisor.

Another consideration is account minimums and fees. Many low-cost brokers have no account minimums, while most full-service brokers require at least $500-$2000 to open an account.

Fees can also vary greatly between firms. Make sure to compare mutual fund expenses, commissions, and other trading fees before making your decision.

Finally, research the firm’s reputation and customer service record. Read online reviews and talk to friends who have used the brokerage firm before opening an account.

Considering these factors can help you make the best choice for your investing needs.

Active vs. passive investing (self-directed vs. robo-advisor)

There are two main types of investors: active and passive. Active investors make frequent trades in an attempt to beat the market.

Passive investors, on the other hand, buy and hold a mix of stocks and bonds with the goal to match the returns of the overall market.

Your goals, time horizon, and risk tolerance can determine whether you are active or passive. If you want to beat the market or need regular access to your funds, active investing is for you.

If you’re comfortable with leaving your investments alone for long periods without worrying about day-to-day fluctuations in prices, passive investing may be a better fit.

If you’re not sure which type of investor you are or would like some help deciding, consider a robo-advisor.

Robo advisors provide professional investment management services at relatively low cost and typically have low minimums to start. They make buying and selling investments

easy with automatic rebalancing and tax loss harvesting capabilities.

Investment types/assets available

One of the main reasons to open a brokerage account is to invest in different assets.

Carefully consider which types or assets you want to own before opening an account because some firms only offer certain investment options depending on your location, net worth, and other factors.

Account minimums and fees, etc.

There are several factors to consider when choosing a brokerage firm, but account minimums and fees tend to be the most important.

Account minimums can vary significantly between firms and often depend on your location and net worth. Fees also vary widely depending on the types of investments you own or the amount of money in your account.

Thoroughly research before opening an account because paying higher trading commissions or investing expenses could end up costing you thousands over time if left unchecked.

By learning about all available options for investment companies as well as their pros and cons, you can find the best fit for managing your portfolio.

Find Market-Beating Stocks to Supplement Your Index Funds

The best stock picking services consider all of the variables discussed above when making their selections to subscribers. Have a look at two Motley Fool stock research services subscribed to by close to a million investors.

We think either subscription makes for a great short-listing system to find good stocks worth investigating yourself—and possibly even buying for your portfolio for the long-term. Both services recommend buying and holding for no less than three to five years, departing with some of the other swing trade alerts services people use to find short-term profit potential in the stock market.

You can also get them, and two other Motley Fool services, as part of Motley Fool’s Epic Bundle.

Motley Fool Rule Breakers: Best for Long-Term Investors Looking for Growth Stocks

motley fool rule breakers sign up 1

  • Available: Sign up here
  • Best for: Buy-and-hold growth investors
  • Price: Discounted rate for first year

Motley Fool Rule Breakers recommends stocks that the Rule Breakers team believes have massive growth potential. In some cases, these companies are at the forefront of emerging industries—in others, they’re disrupting the status quo in long-established industries.

This stock subscription service doesn’t fixate on what’s currently popular, but instead always looks for the next big stock ahead. That means these Motley Fool picks have the potential to be nauseatingly volatile … but also the potential to rocket higher exponentially.

Rule Breakers’ team has six rules it follows before making stock recommendations to subscribers:

  1. Only invest in “top dog” companies in an emerging industry. As Motley Fool puts it: “It doesn’t matter if you’re the big player in floppy drives—the industry is falling apart.”
  2. The company must have a sustainable advantage.
  3. The company must have strong past price appreciation.
  4. The company needs to have strong and competent management.
  5. There must be strong consumer appeal.
  6. Financial media must overvalue the company.

In other words, Rule Breakers’ team considers a number of factors before it ever recommends a stock to its users. If it’s not a well-run company with a sustainable advantage over its competitors, and it’s not in an emerging industry, it probably won’t get past Rule Breakers’ velvet ropes.

How has Motley Fool Rule Breakers performed?

Their rules seem to pay off, if their results are any indication.

Since the product’s inception in 2004, Rule Breakers has more than doubled the S&P 500, beating many leading money managers on Wall Street. Their results speak for themselves and easily justify the affordable price tag.

rule breakers vs sp500 dec 7 2023
Motley Fool

What to expect from Motley Fool’s Rule Breakers

The service includes five primary items you can expect to receive when you sign up:

  1. A list of Starter Stocks—including their “essential Rule Breakers”—to begin your investing journey
  2. Top-10 rankings of timely buys from the entire Rule Breakers portfolio
  3. Two new stock picks each month
  4. Investing resources, including the stock picking service’s library of stock recommendations
  5. Access to a community of investors engaged in outperforming the market and talking shop

And of course, you’ll receive regular communications from the Rule Breakers team providing analysis and rationales behind the portfolio’s holdings.

If you’re unhappy with the service within the first 30 days, you can receive a full refund. You can also read more in our Motley Fool Rule Breakers review.

Related: Motley Fool Stock Advisor vs. Rule Breakers

Motley Fool Stock Advisor: Best for Buy-and-Hold Investors

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  • Available: Sign up here
  • Best for: Buy-and-hold growth investors
  • Price: Discounted rate for first year

Motley Fool’s signature product, Stock Advisor, aims to provide investors with one thing: top picks for market-beating stocks from the site’s co-founders. And it espouses my favorite, plain-vanilla trading style: buy-and-hold.

The investment newsletter and service sends recommendations for “Steady Eddies” and potential high-flying stocks the service believes provide financially sound fundamentals.

Preferring to stick with companies that outperform steadily over time, Stock Advisor offers stock picks with investment rationales, research, and information to educate you about your investments.

How has Motley Fool Stock Advisor performed?

Stock Advisor stock picks have performed exceptionally well over the service’s 22-year existence. The service has made 175 stock recommendations that have historically delivered 100%+ returns, multiplying members’ net worth several times over.

Overall, the Motley Fool Stock Advisor stock subscription service has returned 671% through April 8, 2024, since its inception in February 2002. This number is calculated by averaging the return of all stock recommendations it has made over the past 22 years. Comparatively, the S&P 500 Index has returned 152% over that same time frame.

stock advisor vs sp500 apr 8 2024
Motley Fool

What to expect from Motley Fool’s Stock Advisor:

The Stock Advisor service provides a lot of worthwhile resources to subscribers.

  1. “Starter Stocks” recommendations to serve as a foundation to your portfolio for new and experienced investors
  2. Two new stock picks each month
  3. 10 “Best Buys Now” chosen from over 300 stocks the service watches
  4. Investing resources with the stock picking service’s library of stock recommendations
  5. Access to community of investors engaged in outperforming the market and talking shop

The service charges a discounted rate for the first year and has a 30-day membership-fee refund period. Consider signing up for Stock Advisor today.

Read more in our Motley Fool Stock Advisor review.


3. Motley Fool Epic Bundle

epic bundle signup

If you ever wanted to try more than one Motley Fool service, now’s the time.

Motley Fool Epic Bundle isn’t itself a stock-picking service—instead, it’s a bundled selection of four popular Motley Fool stock recommendation products:

  • Stock Advisor: Buy-and-hold stock picks designed to deliver consistent performance with less volatility.
  • Rule Breakers: Stocks that have massive growth potential, whether they’re at the forefront of emerging industries or disrupting the status quo in long-established businesses.
  • Everlasting Stocks: Long-term stock picks that follow Tom Gardner’s Everlasting philosophy of seeking outperformance by finding companies with an edge—whether that’s a superior company culture, pricing power, or leadership.
  • Millionacres: Real Estate Winners: A recommendation service that revolves around real estate investment trusts (REITs) and other real estate-related equities.

The point of Epic Bundle is simple: Collectively subscribe to all four products for much less than it would cost to buy individual subscriptions of each. Historically, that has only applied to regular renewal rates; but right now, Motley Fool is offering a significant first-year discount on Epic Bundle. Now, first-year cost savings come out to about 22% vs. the first-year prices of all four products individually, then those savings expand to 52% at regular renewal rates.

About the Author

Riley Adams is the Founder and CEO of WealthUp (previously Young and the Invested). He is a licensed CPA who worked at Google as a Senior Financial Analyst overseeing advertising incentive programs for the company’s largest advertising partners and agencies. Previously, he worked as a utility regulatory strategy analyst at Entergy Corporation for six years in New Orleans.

His work has appeared in major publications like Kiplinger, MarketWatch, MSN, TurboTax, Nasdaq, Yahoo! Finance, The Globe and Mail, and CNBC’s Acorns. Riley currently holds areas of expertise in investing, taxes, real estate, cryptocurrencies and personal finance where he has been cited as an authoritative source in outlets like CNBC, Time, NBC News, APM’s Marketplace, HuffPost, Business Insider, Slate, NerdWallet, Investopedia, The Balance and Fast Company.

Riley holds a Masters of Science in Applied Economics and Demography from Pennsylvania State University and a Bachelor of Arts in Economics and Bachelor of Science in Business Administration and Finance from Centenary College of Louisiana.