By Judy Elizabeth

Disclaimer: This information is for educational purposes only. Judy is not an attorney, financial advisor, and/or accountant. This article is not a substitute for professional financial, business, or legal advice. 

As a woman without a finance degree, who is now in her 30’s, I used to think investing was something I would never be able to do. I thought it was for men in suits on wall street. How could I understand all of the complicated jargon and rules? How would I even have the money to invest? 

Turns out, it is easier than I thought (don’t let the corporate overlords fool you) and you don’t have to have a lot of money to invest. You can start with whatever you have. 

There is a lot of free information out there to teach you the basics. I personally have learned through YouTube, Instagram, and books and want to break down some of the basics for you here. 

First of all, you may be an investor and not even know it. If you contribute to a 401k through your employer, that is an investment plan. That money is currently invested in the stock market so it can grow for your retirement. 

If you are investing in a 401k the first thing you want to do is create an online account with the investment firm so you can check out what you are invested in and what the fees are. 

You probably have gotten some stuff in the mail from them that will help you create an online account and if not reach out to your Human Resources department and they should be able to hook you up with the resources to set this up. 

Now although there are many things you can invest in, if you learn these six types of investments you will know enough to get started.

Stocks: When you purchase a company's stock you own a share in the company and have a claim to a part of their assets and earnings. The company has to be publicly traded for you to be able to buy their stock. Examples: Costco, Starbucks, Amazon, Apple

Bonds: When you purchase a bond you are loaning money, often to the government, and they promise to pay you back with interest. The interest rate is often a set specific amount so these are known to often be more secure than stocks but you usually make less money off of them. Categories of bonds: corporate, municipal, government and agency

Index Funds: When you purchase an index fund you own shares in multiple stocks or bonds that are designed to be like you are invested in the whole market. Fun fact: Warren Buffet, one of the richest investors, recommends index funds as the best way for everyday investors to invest. Some popular examples of index funds mimic the S & P 500, Nasdaq and Dow Jones.

Mutual Funds: A pool of money is collected from many investors and then professional money managers invest it into different things trying to figure out which investments will make the investors the most money. Note: the financial companies running these mutual funds charge big fat fees, generally more than what index funds charge (called expense ratios). These fees take away from the money you earn on the investments. Index funds have 

Exchange Traded Funds: Similar to mutual funds, ETFs hold different investments like stocks, bonds, etc....ETFs tend to have fewer fees than actively managed mutual funds. They often include investments in a particular sector. For example, there is an ETF that invests in technology companies and another one that invests in renewable energy companies.

Target Date Fund: This fund automatically switches what it is invested depending on when you want to retire. Since stocks tend to be riskier investments and bonds safer a target date fund will invest in more stocks when you are younger and automatically switch over to more bonds the other you get.

Once you decide what you want to invest in you will have to purchase that investment through a brokerage firm. Some examples of brokerage firms are Vanguard, Charles Schwaab, Robinhood, and Fidelity. You also have to decide if you want to invest through a retirement account like an Individual Retirement Account or with a general investment account (called a brokerage account). 

If you can’t decide what type of investment account to open up check out THIS article.

Next, you will want to figure out the name of the investment you want to buy so you can purchase it. Each investment has what is called a ticker symbol, a short string of mostly letters to identify that investment. 

To give you an example, I mostly invest in Index funds. So when I wanted to invest in the index fund of the S & P 500 through Vanguard I googled “S & P 500 Index Fund Vanguard Ticker Symbol” and I found VFINX. Then I went to my Vanguard account and purchased that. 

You may still feel after reading this that you want to learn more. The good news is that a lot of these firms have great customer service. Anytime I have questions I either google them or call up Vanguard and they walk me through it. Don’t let not knowing everything stop you from getting started. 

The one thing I don’t want you to forget is that there are expense ratios (fees) on most investments. Always look those up. Ramit Sethi who wrote the book ‘I Will Teach You to Be Rich” says that a fee of .75% or more is too high. 

For more resources, my favorite investing YouTube channel is Our Rich Journey. 

Now get out there and invest in your future!