When I was financially ready to start investing, I did some research online for next steps. Now that you are ready to start investing, I hope this will help you get started as well. Below are some things to know/consider before you get started, along with what I did.
How Involved Do You Want To Be?
Some people want to do it themselves and pick their own stocks to invest in. Others rather have their investments managed by someone else, an advisor or broker. I went with the self-managed approach because I wanted to take this opportunity to learn something new. Also, I have a 401K through my employer that is already being managed. These $100 dollar investments are in addition to the 401K. That is another reason why I went with the self-managed approach. If your employer offers a 401K sign up for it. Most employers that offer a 401K will match your contribution up to a certain percentage. If that is the case, make sure you are contributing at least the minimum to get that match. Always say yes to FREE money!
Which Investment Account Should You Choose?
After you determine your approach, you will need to do a little research on different companies for an investment account. If you are doing the investing yourself there are many free options out there that require little to no money to open an account. You just need to look to see who has the best promotion and rating at the time you are ready to open your account.
If you are interested in having your investments managed, just know that this option is NOT free. So, make sure you review any management and/or commission fees they may charge. Another thing to confirm is if the company has a minimum dollar about for you to open account. When I was at this step, I saw companies like Fidelity, Wealthfront, Ally Invest, etc. There are a lot of options out there.
Since I was going to manage these investments on my own, when I was at this step, I chose Robinhood. I liked that it was free to use ($0 fees), had great ratings, you get a free stock when joining, and you get free referral stocks. The free stock was a big selling feature for me. As a new investor I didn’t know where to start. My free stock introduced me to something new. As for the day to day use, I mainly use Robinhood on my cell phone app and I have to say it is extremely easy to use. Their app has introduced me to companies I never knew existed. Which is very helpful for a first time investor. If this is the company you chose, please use the link at the bottom of this post.
What’s Your Investing Budget?
Are you investing a lump sum or doing monthly installments, like me? If you are doing monthly installments, your monthly budget can help you determine how much you can contribute… without stretching your other everyday finances too thin. I was able to determine $100 a month for investing was doable while still maintaining my everyday finances and general savings goals. Hopefully, at this point you have a budget for your everyday finances. If not, I recommend everyone to have one.
If you are doing one lump sum for your investment just make sure the rest of your day to day finances are where they should be. There is risk in the stock market. If you need cash for emergency, can you be covered without selling the stocks? Emergencies always happen at the worse time so planning ahead for that can provide peace of mind while the stock market fluctuates… especially in this current market. Having some money saved in a savings account is the best plan for an emergency fund, not the stock market.
What to Invest In?
Maybe you know right from the start what stocks you want to buy. If that is the case, make sure it’s a company that you know and believe in, like I did for my First $100. Then again you are new to this so maybe you don’t know what to buy. If that is the case, then it is recommended you do some research before you buying. Soon I will be posting things to consider or research before buying stock.
Start Investing
Remember to buy low. Look for bargains!
Tip from an expert: “You’ve got to understand accounting.” Warren buffet (Chairman and CEO of Berkshire Hathaway) recently said this during an interview with Yahoo Finance as his advice for aspiring young investors.
If you are not financially ready to invest yet, no problem, check of my previous post (HERE) on how I got financially ready to invest.
THE 100 DOLLAR TRADER 
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