How to Get Started in Stocks When You’re Not a Millionaire (Yet)

The world of stock investing often paints a picture of Wall Street tycoons in power ties sipping impressive and expensive drinks.

For the average Joe or young professional, that picture can make investing look like something for other people. It’s something for millionaires and old money families. 

In reality, you can invest in stocks even if your not a millionaire. Keep reading and we’ll explain how to get started in stocks with a comparatively small investment.

Employer Retirement Program

One of the easiest ways you can get started in stocks is with an employer retirement program. The vast majority of employers that offer retirement programs give you access to a 401(k).

A 401(k) typical lets you invest in one or several available mutual funds. Those mutual funds offer combinations of stocks, bonds, and other long-term investments.

While you don’t pick out individual stocks, it does get your foot in the door and lets you pick types of investments.

Mutual Funds

If you already max out your 401(k) contributions, you can privately invest in specific mutual funds. Mutual funds come in all kinds of shapes and sizes, such as:

  • money markets
  • bond funds
  • income funds
  • equity funds

You can also choose among specialty funds. Specialty funds can lack some of the diversity that limits risk in other types of mutual funds. A specialty fund might focus on an industry sector or only invest in socially-responsible businesses.  

Robo-Advisors

Robo-advisors essentially automate stock investing. When you sign up with a robo-advisor, you build a profile with key information. For example, you’ll decide on your level of risk tolerance and provide long-term financial goals.

The robo-advisor uses the information as the basis for investments. As a bonus, you typically pay fewer fees and can often start investing with a couple hundred bucks.

This approach frees you making decisions based on the corn futures market in Asia or checking Walgreen’s stock price every day.

Micro Investing

The term micro investing offers a surprisingly accurate picture of this approach to getting started in stocks. Rather than dump a lump sum into an investment account of some kind, an app rounds up purchases to the nearest whole dollar. It takes the difference and transfers it into an investment account.

You periodically decide what kind of stocks or mutual funds the balance should invest in. Make sure you read the fine print before choosing an app, as the fees can vary considerably from app to app.

With some apps, you only pay a nominal monthly fee. Other apps charge a per transaction fee.

Parting Thoughts on How to Get Started in Stocks

If you ever wondered how to get started in stocks, it turns out you have lots of options.

You can take advantage of traditional approaches like a 401(k) through your employer or a mutual fund you pick. You can sign up with a robo-advisor and automate the process. You can even use a mobile app for micro investing. 

Looking for other ways to take control of your financial future? check out our post on business opportunities for 2019.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

error: Content is protected !!