Investing is an endeavor that is better started while you are still young. In order to grow your wealth, you're going to need time (and lots of it), so it's important to act as soon as possible. It can be intimidating to dive headfirst into it, especially if you feel like you don't have enough funds set aside; but the reality is that you don't really need a lot of money to get started. In fact, you probably already have enough in your bank account at this very moment.
Lynette Khalfani-Cox, the CEO of Money Coach, told Insider that all you really need to get started with investing is $250 to $500. In her experience, that amount will give new investors a good foundation to "start building a more robust portfolio." Nowadays, you can buy shares for as low as $50, so anything within her recommended range should be more than enough. And even if you can't afford full shares, you can always opt to buy partial or fractional shares. The bottom line is, cost-effective investment options do exist—it's just a matter of taking the plunge and actually going for it.
Of course, everybody's investment goals will be different, so it's still important to have the right strategy in mind. For beginners, in particular, Khalfani-Cox suggests holding off on individual stocks at first and starting with ETFs (exchange-traded funds) or index funds instead. It can be tempting to buy individual stocks straight out of the gate, but doing so without having the proper knowledge could also put you at a higher risk of losses.
"Even though people may be tempted to find the latest hot stock, novices should stay away from individual stocks as their very first foray into the stock market. A low-cost passive index fund that tracks an index like the S&P 500 will give a person broad exposure to the overall stock market and good diversification."
Once you have more experience, you can try your luck with individual stocks to learn more about the market. However, it may be best to seek the help of an advisor when you're first starting out, just to make sure you are making well-informed decisions and avoiding unnecessary risks. If you aren't sure what strategy would suit your needs best you can always get a brokerage firm to help you figure that out via a risk assessment questionnaire.
Lastly, once you get started with investing, it's important to stay committed and keep investing over time. Consistency is key for growing your wealth, so if you have room in your budget to set up automatic contributions to your investments, that will help you stay on track. Ideally, you want to reach a point where you are investing 20% of your income. If you can achieve that, you'll be more than prepared for what the future has in store for you.
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