How to Start Investing in 2024: A Beginner’s Guide

Watching the news in 2024 can seem like a wild ride on one of those sketchy roller coasters at the county fair. The economy? Uncertain. The housing market? Anything but normal. The stock market? Who knows . . .

You might feel like it’s a bad time to start investing for retirement or your toddler’s future education (especially if you believe everything the media tells you), but hear us out: The best time to get control of your finances, build an emergency fund, and start saving for the future is today!

Once you’ve got a solid financial foundation, steadily investing your money over time is where real, lasting wealth comes from. Simply put, the best way to get rich quick is to get rich slow.

 

When Should I Start Investing?

First things first. Before you start investing, you need to work your way through the first three of Ramsey’s 7 Baby Steps. That means saving $1,000 for a starter emergency fund, paying off all your debt except your mortgage using the debt snowball method, and then saving a fully funded emergency fund of 3–6 months of expenses.

If you’re new to the 7 Baby Steps, no problem! Simply put, it’s a plan millions of people have followed to get out of debt and start building wealth for retirement. Let’s break it down:

  • Step 1: Save $1,000 for your starter emergency fund.
  • Step 2: Pay off all debt (except the house) using the debt snowball.
  • Step 3: Save 3–6 months of expenses in a fully funded emergency fund.
  • Step 4: Invest 15% of your household income in retirement.
  • Step 5: Save for your kids’ college fund.
  • Step 6: Pay off your home early.
  • Step 7: Build wealth and give generously!

Here’s the deal—your income is your most important wealth-building tool.

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How to Start Investing in 2024

5-Step guide to investing for beginners

Rent, utility bills, debt payments and groceries might seem like all you can afford when you’re just starting out, much less during inflationary times when your paycheck buys less bread, gas or home than it used to. But once you’ve wrangled budgeting for those monthly expenses (and set aside at least a little cash in an emergency fund), it’s time to start investing. The tricky part is figuring out what to invest in — and how much.

As a newbie to the world of investing, you’ll have a lot of questions, not the least of which is: How much money do I need, how do I get started and what are the best investment strategies for beginners? Our guide will answer those questions and more.

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. That’s thanks to compound earnings, which means your investment returns start earning their own return. Compounding allows your account balance to snowball over time.

At the same time, people often wonder if it’s possible to get started with a little money. In short: Yes.

Investing with smaller dollar amounts is possible now more than ever, thanks to low or no investment minimums, zero commissions and fractional shares. There are plenty of investments available for relatively small amounts, such as index funds, exchange-traded funds and mutual funds.

If you’re stressed about whether your contribution is enough, focus instead on what amount feels manageable given your financial situation and goals. “It doesn’t matter if it’s $5,000 a month or $50 a month, have a regular contribution to your investments,” says Brent Weiss, a certified financial planner in

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How to start investing: A guide for beginners

Investing can be one of the more complex concepts in personal finance. But it’s also one of the key cornerstones to financial independence and wealth building. While it might seem intimidating—from the alphabet soup of terms like IRAs and 401(k)s to keeping track of the latest market movements—understanding the basics can boost your confidence and help you feel comfortable getting started.  


How to start investing 

On a high level, investing is the process of determining where you want to go on your financial journey and matching those goals to the right investments to help you get there. This includes understanding your relationship with risk and managing it over time.  

Once you understand what you want, you just have to jump in. You can decide to invest on your own or with the professional guidance of a financial planner. Below we discuss in detail each of the key steps to help you get started with investing. 

1. Decide your investment goals 

Before you decide to open an account and begin comparing your investment options, you should first consider your overarching goals. Are you looking to invest for the long term, or do you want your portfolio to generate income? Knowing this will narrow down the number of investment options available and simplify the investing process.  

“Consider what your ultimate goal is for this money—is it for retirement, a down payment on a house in the next five years, or something else?” says Lauren Niestradt, CFP, CFA, and portfolio manager at Truepoint Wealth Counsel.

Understanding your goals and their timelines will help determine the amount of risk you can afford to take and which investing accounts should be prioritized. 

For example, if your goal is to invest your money for retirement, you’ll want to choose a tax-advantaged vehicle like an individual

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Investing tips from Warren Buffett to start the new year on the right foot

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Newsletter for Investment Advice – You Need to Start Reading This Now

By Lance Roberts | November 11, 2023

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Inside This Week’s Bull Bear Report

  • Bond Rates Drop Sharply
  • How We Are Trading It
  • Research Report – The Most Overlooked Economic Indicator
  • Youtube – Before The Bell
  • Market Statistics
  • Stock Screens
  • Portfolio Trades This Week

Market Review And Update

It was interesting that last week, we wrote:

“The problem with the market rallying and yields dropping is that it undoes the financial constriction they provided on the economy. Higher asset prices boost consumer confidence, and lower yields provide buying power. Both actions create the possibility of a resurgence in inflation, putting the Fed back into “hawkish” mode to ensure inflation falls.

Mr. Powell heard our concerns, and on Thursday, he responded to the recent loosening of financial conditions.

“[The FOMC] is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2 percent over time;  we are not confident that we have achieved such a stance. We know that ongoing progress toward our 2 percent goal is not assured:  Inflation has given us a few head fakes. If it becomes appropriate to tighten policy further,  we will not hesitate to do so.” – Jerome Powell

As discussed below, the recent drop in bond rates and surge in the stock market works against the Fed’s goal of tightening monetary conditions. The Fed’s goal remains “tighter” conditions to reduce consumer spending and increase unemployment to reduce economic demand. The demand reduction is how inflation, which is solely a function of supply and demand, gets reduced.

The Fed faces a tricky balancing act of slowing demand without creating a recession, which, despite recent improvements in economic data, remains a risk in 2024.

However, as stated, the market pullback on Thursday was well-needed after the longest “win streak”

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How to Start Investing as a Teenager

Time gives teenagers a massive advantage over those starting their investment journey later in life. Albert Einstein once said, “Compound interest is the eighth wonder of the world. He who understands it earns it … he who doesn’t … pays it.”

What makes compounding such a powerful force is the impact it has over time. The longer you allow an investment to compound, the more valuable it can become.

Image source: Getty Images.

Teens can let the wonders of compounding interest work to their advantage for a longer period, which could make them wealthier by the time they hit retirement.

This guide will help teens and their parents (since you must be 18 to open a brokerage account in most states) get on the right path to building wealth through investing. Getting on the best path is crucial since it will allow a teen to take full advantage of compounding interest.

Compound Interest

Compound interest is what you get when you reinvest your earnings, which then also earn interest.

Five steps to investing as a teenager

Five steps

It’s easy for anyone, including teenagers, to start investing. Just follow these five steps, and you’ll be on your way to an exciting lifetime adventure:

  1. Learn the basics of investing.
  2. Find your investing identity.
  3. Discover the right investments for you.
  4. Open and fund your brokerage account.
  5. Make your first investment.

1. Learn the basics of investing

As with any new adventure, investing might seem challenging at first. However, it’s relatively simple once you understand stock market basics and how to invest in stocks. Read as much as you can about investing so you know how it works, what mistakes to avoid, and the best practices to follow. Also, be sure to check out our book, The Motley Fool Investment Guide

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