How Should a Beginner Start Investing?

Updated 8/29/2025

Investing is one of the most effective ways to build wealth and secure your financial future. But if you’re just starting out, it can feel overwhelming between all the terminology and investment options available. Understanding where to start and how to plan everything out can help make achieving your investment goals much easier.

Reasons to Start Investing

Investments are a great way to build wealth through returns as your portfolio grows year after year. This can give you the monetary resources you need to meet your financial goals. It’s also a good way to stay ahead of inflation so your money can hold more of its value.

How to Start Investing

Assess Your Current Financial Situation

Take a moment to think about your current financial situation.

• Income & expenses: How much you’re earning and how much you’re spending.
• Debt: Balances on credit cards, personal loans, and other debt sources can outweigh investment gains. Try to eliminate any high-interest debt either by having a plan to pay it off or consolidate it into a more manageable interest rate.

Understanding your financial situation can help you plan out your financial goals:

• Short term (1-3 years): Paying down debt.
• Medium-term (3-7 years): Buying a house.
• Long-term (10+ years): Planning for retirement.

Once you make a plan and know what your goals are, this can help you figure out what investment options you should pursue.

Review Investment Options

There are many types of investment options to help build a portfolio. Each of these can be another step in having a diverse investment portfolio.

• Stocks: The most well-known type of investment that represents ownership in a company. Good for long-term investment strategies, but prices can be volatile.
• Certificates of Deposit (CDs): A low-risk, federally insured savings account that offers a fixed interest rate over a predetermined period.
• Bonds: A lower-risk option since it’s essentially a loan to a company or government that includes steady interest payments.
• Mutual Funds: A pool of money from shareholders that’s spread across various types of investments. Good for diversification and reducing individual risk.
• Exchange-Traded Funds (ETFs): Like shares of the stock exchange but are invested in a wide range of assets. An easy investment option for beginners.
• Real Estate: Investing money into a physical property or a Real Estate Investment Trust (REIT) that’s good for long-term value appreciation based on the housing market.
• Index Funds: A type of ETF or mutual fund designed to track a specific market index like the S&P 500.

Creating a Brokerage Account

A brokerage account is an investment account that allows its holders to invest in stocks, mutual funds, bonds, and ETFs. You can personally set these up through financial organizations like Robinhood and E*Trade. Mobile applications like Acorns or Stash ease beginners into the concept of investments by offering lower volume investing. These are good solutions if you want to handle everything yourself or just want to be introduced to investing.

For a long-term, guided approach, investment services are offered through credit union memberships. Their advisors will sit down with you and develop a personalized investment strategy based on your financial goals. Plus, you’ll have the support and expertise of professionals in case you have any questions or concerns.

Building Your Investment Portfolio

Don’t put all your eggs into one basket. Most investment options come with some degree of volatility. By spreading your investments across multiple assets, you reduce your risk of loss. With that said, experiencing loss in investments is almost unavoidable. Before committing to anything, you should understand your risk tolerance.

What is Risk Tolerance?

Risk tolerance is how willing an investor is to endure the volatility of an investment. In other words, how much are you willing to lose. If you want a long-term investment plan, you might be more tolerant of market fluctuations, so stocks, equity funds, and ETFs make more sense knowing you don’t need to see returns immediately. For short-term investors, you might not be able to afford any loss and should stick to bonds or CDs.

Reviewing Your Investments

While it may be tempting to sit down and stress over every change that happens in the stock market, it’s important to remember that investing is a long-term effort. Avoid the temptation to try and predict where the market is going or chasing a new trend. Checking your portfolio should be about making sure your investments are still aligned with your financial goals. If you have any questions or concerns, it’s best to speak to a Wealth Advisor versus making any rash decisions.

Additional Investment Help

If you need help working towards your financial goals, Community First provides comprehensive financial solutions for investment management and financial planning from a team of advisors. If you’re ready to work towards your financial goals, call us today at (904) 371-8076 and select Option 9.

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