How do I start investing if I don't know anything? (2024)

How do I start investing if I don't know anything?

If you don't know much about the stock market, consider investing in S&P 500 ETFs. You can then branch out into individual stocks as you get better at researching companies. Aim to maintain a diversified portfolio at all times.

Index Funds or ETFs: Index funds and exchange-traded funds (ETFs) pool investors' money to invest in a diversified portfolio of stocks or bonds that mimic a particular index, such as the S&P 500. These funds offer broad market exposure and require minimal knowledge of individual stocks.

A stock portfolio focused on dividends can generate $1,000 per month or more in perpetual passive income, Mircea Iosif wrote on Medium. “For example, at a 4% dividend yield, you would need a portfolio worth $300,000.

Investing your $100 can be pivotal in generating passive income, preparing for financial uncertainties, and achieving long-term goals. The magic of compound interest implies that even modest sums can snowball over time.

Imagine you wish to amass $3000 monthly from your investments, amounting to $36,000 annually. If you park your funds in a savings account offering a 2% annual interest rate, you'd need to inject roughly $1.8 million into the account.

Talk to friends/family

It will be a good idea to pick their brain. Talk to them about various investment options, their pros and cons, and tips and tricks to make wise financial decisions. However, it is important to not blindly follow everything they say. Take their advice, but use your own judgement while investing.

Investing $100 per month, with an average return rate of 10%, will yield $200,000 after 30 years. Due to compound interest, your investment will yield $535,000 after 40 years. These numbers can grow exponentially with an extra $100. If you make a monthly investment of $200, your 30-year yield will be close to $400,000.

How to make an extra $1 000 a month passive income?

If you invest $1,000 per month, you'll have $1 million in 25.5 years.

How much should you be investing? Some experts recommend at least 15% of your income. Setting clear investment goals can help you determine if you're investing the right amount.

Cash. A cash bank deposit is the simplest, most easily understandable investment asset—and the safest. It not only gives investors precise knowledge of the interest that they'll earn but also guarantees that they'll get their capital back.

Investing in stocks, bonds, crypto, and real estate

Investing has the potential to build wealth much faster than a savings account alone. The average rate of return on the U.S. stock market is 10%. Assuming you saw similar results in your portfolio, you'd see your money double every six or seven years.

Investing can help you build wealth over the long-term and it's also possible to see relatively quick returns with day trading. Luckily, many investment apps exist to fit investors with their needs and expertise level. Day trading involves buying investments at one price and selling them at a higher price.

You can put your money to work over the next 35 years to build wealth and financial stability. Time is your greatest asset. So whether you're 30, or whether you're 40, right now, the most important thing is to get started.

Yes, you can earn money from stocks and be awarded a lifetime of prosperity, but potential investors walk a gauntlet of economic, structural, and psychological obstacles.

How much do I need to invest a month to be a millionaire in 5 years?

Let's say you want to become a millionaire in five years. If you're starting from scratch, online millionaire calculators (which return a variety of results given the same inputs) estimate that you'll need to save anywhere from $13,000 to $15,500 a month and invest it wisely enough to earn an average of 10% a year.

If you don't know much about the stock market, consider investing in S&P 500 ETFs. You can then branch out into individual stocks as you get better at researching companies. Aim to maintain a diversified portfolio at all times.

A beginner should start investing with contributions to a retirement plan. They should then choose index funds or exchange-traded funds (ETFs). A good way to start is also by choosing a robo-advisor that will make investment decisions for you based on the criteria you decide.