How to Start Investing in Stocks?

Why Should You Invest?

In order to build your wealth, you need to invest your money. Investing in the stock market lets you build wealth without working, your money will work for you, instead of working for your money. Do you have to invest in stocks to make money? No, there are hundreds of different investments like real estate, art, baseball cards, and bitcoin (for some people).

Why Stocks?

The main reason why I  invest in stocks is that its very easy for beginners. You could download and sign-up with Robinhood and start buying stock the same day! Also if you invest in a low-cost index fund, on average you will profit 8-12% per year. The last reason is that everyone has the same opportunities to make money.

Dow Jones 100 Year Chart

How to Start Investing

1) Invest in Education

Now I believe that before you open your brokers account you should invest in education. This could be anything from reading books, reading articles, buying a course, watching YouTube videos, and much more. The reason why I think this is because you should be an expert in where your money is. 

2) Commission Free

Never pay for a commission to buy stock. The commission is when a broker charges you $2-$10 per trade. Meaning when you buy a stock they charge you, and when you sell they charge you. Finding a commission-free broker will save you hundreds of dollars per year.

Commission Free Brokers:
a. Robinhood
b. TD Ameritrade (Thinkorswim)
c. WeBull

3) Choosing Stock
For most people picking the right stock is like finding a needle in a haystack, I try to make simple. I would recommend putting your money in a low-cost index that tracks the overall market. These have a very low risk and high reward for long term investors. Index funds pool the top companies together using fraction shares. So Vanguards S&P 500 Index Fund (VOO) owns the top 500 companies but only costs $250.

Vanguards Companies in the ETF

4) Reinvesting Dividends

A dividend reinvestment plan is also known as DRIP, automatically reinvests your dividends back into the companies. So honestly your dividends will buy stock, then those stock will create dividends, this process is called compound interest. DO IT YOU WILL MAKE SO MUCH MONEY!