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Stock Market Basics

How Do I Start Investing?

Andrea Coombes

Written by Andrea Coombes
Edited by Carolyn Kimball
Fact-checked by Dayana Yochim

March 13, 2024

So you want to invest? Yessssss. Investing is a great way to create wealth. We do a deep dive in our story on the best way to invest, but if you want the quick and dirty lowdown, keep on reading.

Quick take: You don’t need a lot of money to get started investing — you can start with as little as $20. All you have to do is...

  1. Open an account
  2. Transfer money into it
  3. Pick your investments

Tell me more! Let’s take a closer look at each of these three steps:

1. Open an account. First, you need to open a brokerage account. Here’s a guide to the best brokers on our sister site,

  • If you want to start with a small amount of money, pick a broker that offers fractional shares. That way, you can invest, say, $20 in a company whose shares cost $200 each.
  • If you’re thinking about investing for retirement — and yes, you absolutely should invest for retirement! — then consider opening a traditional IRA or Roth IRA. (Not sure which is best for you? Here’s how to compare Roth IRAs vs. Traditional IRAs.) When you open your brokerage account, you can choose a simple brokerage account, or you can tell the broker you want to open a traditional or Roth IRA.

2. Transfer money. Step No. 2 is to transfer your money. Most brokers make it easy to move your money from your bank account to your brokerage account. These days, the process is straightforward and simple, though it might take a few days. While you’re waiting, start thinking about Step No. 3…

3. Pick your investments. Figuring out which investments to choose is probably the hardest part of investing. Here’s the good news: It can actually be very simple.

  • Target-date funds: The easiest way to start investing is to choose a target-date fund, which is a mutual fund that invests in other mutual funds for you, creating a wholly diversified investment portfolio with one easy click. Just pick the target-date fund that has your estimated retirement date in its name. (A mutual fund is an investment that pools investors’ dollars to purchase shares of companies; mutual funds make it easy for you to create a diversified portfolio without having a lot of money.)
  • DIY investment portfolio: Another way to invest is to create your own diversified investment portfolio of low-cost mutual funds and/or ETFs. This is how I am investing for my own retirement. It’s a set-it-and-forget-it portfolio, though occasionally you do need to shift money to make sure your asset allocation stays in line with your goals. (Learn more about asset allocation.) Read more about how to build your own investment portfolio in Step 2 of our guide on investing for retirement.
  • Individual stocks: If you simply want to give stock picking a try, go ahead and use some play money to invest in a company you’re interested in. Just make sure your brokerage account is at a broker that offers fractional shares so you can purchase a piece of any publicly traded company, no matter how much money you have. Just remember that investing in a single company, or even two or three companies, does not a diversified portfolio make. You are at risk of losing money if that company’s stock loses value and you sell your shares. (With a mutual fund or exchange-traded fund, generally you’re investing in many companies; one company’s misfortune is offset by another company’s wins, helping to maintain your portfolio’s value.)

Bottom line: Investing isn’t rocket science — it’s incredibly easy to open a brokerage account and dive in. The hardest part is finding the best investments for you. You can keep things simple by choosing an all-in-one option such as a target-date fund, or by building a simple portfolio using low-cost index mutual funds.

lightbulb In our experience...

A little personal backstory? I started investing in my early 30s (would that I’d gotten the message in my 20s, but what can you do) with a Roth IRA, making tiny monthly contributions. Twenty-five years later, I’ve now got a handful of 401(k)s and IRAs, and I’ve made years of consistent contributions into my accounts. Just over the past 10 years, I’ve earned more than $165,000 from investment gains alone. So, yes, I’m a fan of investing for the future.

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About the Editorial Team

Andrea Coombes
Andrea Coombes

Andrea Coombes has 20+ years of experience helping people reach their financial goals. Her personal finance articles have appeared in the Wall Street Journal, USA Today, MarketWatch, Forbes, and other publications, and she's shared her expertise on CBS, NPR, "Marketplace," and more. She's been a financial coach and certified consumer credit counselor, and is working on becoming a Certified Financial Planner. She knows that owning pets isn't necessarily the best financial decision; her dog and two cats would argue this point.

Carolyn Kimball
Carolyn Kimball

Carolyn Kimball is Managing Editor for Reink Media Group and the lead editor for content on Carolyn has more than 20 years of writing and editing experience at major media outlets including NerdWallet, the Los Angeles Times and the San Jose Mercury News. She specializes in coverage of personal financial products and services, wielding her editing skills to clarify complex (some might say befuddling) topics to help consumers make informed decisions about their money.

Dayana Yochim
Dayana Yochim

Dayana Yochim has been writing (articles, books, podcasts, stirring speeches) about personal finance and investing for more than two decades, focusing on bringing clarity and the occasional comedic aside to what is often a murky, humorless topic. She’s written for NerdWallet, The Motley Fool,, Woman’s Day, Forbes, Newsweek and others, and been a guest expert on "Today," "Good Morning America," CNN, NPR and wherever they’ll hand her a mic.

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