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When it comes to investing, even the most seasoned investor had to start somewhere. If you’re just getting started with your first investment, you might have some questions and even a little apprehension.
Have you ever wondered how experienced investors got their start? Fortunately, we’ve asked that question for you.
We talked to 27 financial experts about how they started investing, what they did exactly, and whether or not they would do anything differently.
Here are the best ways to start investing, according to the experts.
1. You need discipline
“I got started investing when I was working in the investment management industry. The tech bubble burst and I was too afraid to invest money outside my 401k so I just kept piling in money in my 401k.
“Once the dust settled, I saw how much money you could make if you just stay the course and ignore the noise. My 401k grew and grew without me doing anything. Then came the financial crisis. I watched some of the biggest hedge fund managers scoop up assets at deeply discounted prices.
“That’s when the light went on; invest for the long-term, do not sell in a panic, try to, if you can, take advantage of any big market pull backs by buying assets on the cheap. That’s the joke with investing, it looks very complicated but you don’t need to be a financial expert to invest, you just need some discipline.” says Kathryn of Ms. Cheat SheetInvest for the long-term, do not sell in a panic Click To Tweet
2. Behold the power of compound interest
“When I was 19 years old, I met a mechanic who was a millionaire. He told me that I didn’t have to choose a high salaried career if I wanted to grow wealthy. ‘Find something you like doing,’ he said, ‘But learn how to manage and invest your money.’
He showed me how compound interest worked. He convinced me to start investing $100 a month. That was in 1989. I kept adding to my investments every year. Thanks to him, I’m financially free today” says Andrew of Millionaire Teacher.You don't need to choose a high salaried career to grow wealthy Click To Tweet
3. Invest more early on
“I started in investing in the year 2006 at the age of 22 years old. The capital was a measly $200 back then when I invested in a mutual fund offered by an insurance company which invests in bonds. After a few months, I decided to transfer my investment from bond fund to an equity fund in order to earn a higher income.
“Since then, I have not pulled it out yet and the value now has more than tripled. If I could only bring back the time, I would have invested a higher amount.” says Tyrone of Millionaire Acts.If I could only bring back the time, I would have invested a higher amount Click To Tweet
4. Take the long-term approach
“In my first couple of jobs out of college, my employers didn’t offer workplace retirement plans and I just wasn’t in the game enough to open an IRA. I really regret that. It was only when I went through a financial crisis that I woke up to my need to learn about money in general and investing in specific.
“Now that I write about money full-time, I feel much more informed and confident about how to invest. I take a long-term view of investing, accept the fact that there will be downturns from time to time, and am committed to sticking with a strategy I understand and fully believe in.” says Matt Bell of Sound Mind Investing.Take a long-term view of investing & accept that there will be downturns from time to time Click To Tweet
5. Stay on top of your money
“I’ve always saved money around the house, but I suddenly had a very big year as it pertained to my income and my accountant advised me to invest some of it. I went with the guy she recommended because I trusted her. It was great for a long while until one day I realized I hadn’t heard from him in a while.
“Turns out he’d left that company, they hadn’t named anyone to replace him, and because it was 2008-2009, my portfolio not only lost all it had gained, but more than half of what I’d started with. What I would do differently is do the scheduling of meetings to stay on top of my portfolio. That was a major lesson learned; stay on top of your money when someone else is managing it.” says Mitch of Top Finance BlogStay on top of your money when someone else is managing it Click To Tweet
6. Listen to your dad
“I started investing in my 401k when I got a full time job right out of college. I didn’t want to invest in a retirement account because retirement was 40+ years away! However, my dad convinced me to start investing right away and he was right. Thanks dad!” says Joe of Retire By 40.Start investing right away, even if retirement is 40+ years away! Click To Tweet
7. Own your own property
“I got started investing shortly after high school by buying a rental property. My dad was big into real estate at the time, and he was more than happy to show me the ropes.
“I was instantly hooked; the appeal of creating money out of simply owning something is about as powerful as it gets. It started a lifelong obsession with the topic, something that’s still going strong 15 years later.” says Nelson of Financial Uproar.The appeal of creating money out of simply owning something is about as powerful as it gets Click To Tweet
8. Take more risks
“When I was in college, one of the courses was about derivatives. The course was all about the fencing role of the derivatives for portfolios and business deals to protect against unwanted trends. But a creative student like me could only see the crazy daily yields.
“I knew it then exactly as I know it now — that this was gambling and not investing — yet I was young and wanted to get my bonanza as fast as possible. I had some nice gains and also depressing losses.
“Do I see it as a mistake? Absolutely not. I was young and gambled only on money I had. Young people can afford themselves taking higher risks as they have more time to fix if things went the wrong way.” says Assaf of Best Rates In.Young people can afford taking higher risks because they have more time to recover Click To Tweet
9. Take advantage of free money
“We started investing the way many people do with a company sponsored 401k plan. It was an easy decision to invest that way because it meant ‘free’ money. The only change I would make is that we would have started sooner! “ says Kelly of The Centsible Life.A 401k plan is easy to start investing in because it often means free money Click To Tweet
10. Invest more after debt
“I got my start in investing by contributing to my 401k at my first employer. If I were to do it all over again, I would definitely contribute more after we paid off our debt! I am very thankful that I did contribute what I did to get the 6% match that my employer offered at the time. They don’t do that any more!” says Mrs. Money of Ultimate Money Blog.Pay off debt, then invest more! Click To Tweet
11. Simplify your investments
“I bought and sold used cars while completing my bachelor’s degree. I used that income to start funding a Roth IRA at Vanguard. Looking back, I probably should have simplified my investments further and worried less about which ETFs to purchase. VTI, which tracks the entire U.S. stock market, does just fine, and only costs 0.05% annually.” says Jacob of Cash Cow Couple.Simplify your investments and worry less about which ETFs to purchase Click To Tweet
12. Invest to save on taxes
“I got my start in investing with tax-saving mutual funds on the behest of my employer who encouraged us to invest as a way to save on taxes. Consequently, I started learning more about various investment vehicles and expanded my investment portfolio to include equity based mutual funds and then into equity investing (public markets).
“Looking back, if there is one thing I would change is to have gathered more knowledge and researched more before foraying into stock market since the risk exposure is significantly higher than mutual funds” says Ankit of Getting Money Wise.Gather knowledge and research before foraying into the stock market Click To Tweet
13. Try the Roth IRA instead
“I began investing before I really knew much about investing – by investing in a company sponsored 401(k) plan through my workplace. The plan was an awful plan, with high fees and poor investment options, but at least it got me thinking about saving for retirement. I just wish I had saved more during those years, and of course, that my company had offered a better plan that didn’t cost nearly as much.
“If I could give my past self some advice it would be to invest more of my 401(k) money in a Roth IRA with low cost index funds, where I could keep the expenses low and the expense ratios minimal.” says Peter of Bible Money Matters.I would invest more 401(k) money in a Roth IRA with low cost index funds Click To Tweet
14. Invest more early on
“I started investing shortly after I started my first post college job. Since I didn’t have enough to meet the fund minimums at Vanguard immediately, I saved money in a savings account until I had $1,000, enough to start investing in the STAR fund with Vanguard at the time.
“Eventually, once I had $3,000 invested, I transferred my investments over to the Target Retirement Date 2050 Vanguard fund which had a $3,000 minimum investment at the time. The only thing I wish I would have done differently is invested more of my paycheck early in my career, but I think everyone says that!” says Lance of Money Manifesto.Invest more of your paycheck early in your career, everyone wishes they did it! Click To Tweet
15. Get rich slowly
“My first investment was as a child. Someone talked my dad into buying options and I invested $500 of my money alongside him. The options expired worthless and I lost it all. Next, after my first few real paychecks, I mistook a financial salesman for an advisor and bought a few loaded mutual funds.
“When I realized my mistake, I began my self-taught financial education, ended up primarily invested in index funds, and “got rich slowly.” says Jim of White Coat Investor.Learn from mistakes, get a financial education, invest in index funds, & get rich slowly Click To Tweet
16. Choose index funds instead of managed funds
“I began investing when I was ten. I chose a fund designed specifically for children. About a year later, the SEC filed a civil fraud action against the fund.
“The managers were found guilty of basically stealing kids’ money. And the price tanked with the 9/11 crash at about the same time. I still invest in the stock market today – I just choose index funds instead of managed funds.” says Will of First Quarter Finance.Choose index funds instead of managed funds Click To Tweet
17. Educate yourself & invest responsibly
“I got my start in investing after I bought my first blue-chip stock, TransCanada. But my investing journey actually began earlier than that. I first had to educate myself on how to invest responsibly, I read books on value investing and spoke to other successful value investors.
“Once I understood how to purchase quality dividend paying stocks I began my investing journey, a journey I am still on after more than 17 years.” says Kanwal of Simply Investing.Start by educating yourself on how to invest responsibly Click To Tweet
18. Understand risk management
“My first investment was a complete loss. It was money saved to pay for graduate school, and it literally went to zero. It taught me the critical importance of risk management that ultimately became the centerpiece of my investment discipline to this day.” says Todd of FinancialMentor.com.Risk management is critically important. Its the centerpiece of investment discipline. Click To Tweet
19. Automate your investments
“I started investing in my early to mid 20’s. I’ve been fortunate to prioritize “saving/investing” and financial security over ‘things’.
“Now, many decades later, it’s gratifying to see the impact of the compounded wealth. In fact, while working at San Diego State University in the 1980’s and 1990’s I contributed to a TIAA CREF retirement account. After I left that job, I never contributed another dime and since then the account has increased 538%. The best way to build wealth with investing is to start today and automate a direct deposit into a retirement account and don’t stop.” Barbara of Barbara Friedberg Personal Finance.Start investing today and automate direct deposits into a retirement account Click To Tweet
20. Prepare yourself for life after debt
“My first real experience in investing was through a 401(k) several years after graduating from college though I had no idea what I was doing at the time. I had put off investing for several years after college as I was paying off credit card debt. Looking back, I would’ve started right after college as I was missing out on matches for several years.
“I was so focused on paying off debt that I wasn’t preparing myself for life after that. I would’ve also educated myself so I’d know what I was doing, not to mention more comfortable with investing.” says John of Frugal Rules.Take advantage of 401k matching even while paying down debt Click To Tweet
21. Stick to an investment schedule
“When I first started investing I tended to pick single stocks and try to time the market. If I could do back in time I’d stick to an investment schedule (just investing on a regular basis regardless of the market) and focus on low fee funds instead” says William of Doctor of Credit.Invest on a regular basis regardless of the market Click To Tweet
22. Keep emotions out of investing
“I began investing when I got my first job not long after grad school. The internet was still fairly new and online brokerages were just beginning to become popular with investors, so I decided to jump in head first and open an IRA account online.
“I’ve put a lot of that knowledge to good use over the years, and made a lot of mistakes too. In hindsight, probably biggest thing I would do differently would be to keep my emotions out of my investing. I’m doing a lot better with that these days, but over the years emotional investing has cost me a LOT of money!” says Jason of Celebrating Financial Freedom.Keep your emotions out of investing. Emotional investing can cost you a LOT of money. Click To Tweet
23. Help others while investing
“I used to lend money to redditors on r/Borrow back when I was still in college. I thought it was a fun and easy way for me to earn some cash while helping out people who were in a tight spot financially. I didn’t do it too much, because I understood the risks, but I made a few hundred off of those transactions.
“After graduating from college, I started putting money into my employer’s 401k plan, because they offered to match my contributions up to 3% of my salary. Now I invest in Vanguard’s index funds which has made my investments incredibly easy to manage.” says Anum of Current on Currency.Lending on r/Borrow can earn you cash while helping others, but understand the risks Click To Tweet
24. Don’t be a money moron
“I got started investing by being a money moron. I opened an eTrade account and bought and sold tech stocks I knew of, but knew little about: (Yahoo!, Oracle, Cisco, Intel). I lost $40,000 when the tech bubble burst.
“After that, I learned about smart, passive investing strategies using low-cost index funds with a well-diversified portfolio and proper asset allocation and I’ve never looked back.” says Scott Alan Turner, host of the Financial Rock Star Podcast.Don't be a money moron. Learn about passive investing, low-cost funds, & asset allocation Click To Tweet
25. Avoid outrageous fees
“I started investing through a Roth IRA set up by my insurance agent. I had no idea what I was doing and paid outrageous fees for an actively managed mutual fund.
“After learning a little more, I rolled my IRA into a new Roth account that focuses on indexing, with much lower fees, and that doesn’t have anything to do with my insurance agent.” says Miranda of Planting Money Seeds.Don't start investing through your insurance agent... Click To Tweet
26. Invest in dividend paying companies
“What got me interested in investing was the constant flow of dividend cheques that used to arrive in our family’s mailbox (as my father had invested in shares of dividend paying companies). This concept of being paid to hold pieces of paper (shares) and to have a regular flow of passive income, without going to work for anybody else – seemed quite marvelous to me.” says Dev of Stable Investor.Being paid to hold pieces of paper is quite marvelous Click To Tweet
27. Pay close attention
“I started investing when I was in my early 20s. I started my investing journey, albeit blindly all those years ago by putting my hard-earned money into big-bank mutual funds and paying high management expense fees (MERs) in the process. Little did I know how much these fees would kill my portfolio returns over the years.
“Over the years, I’ve learned to pay close attention to where, how and when to invest my hard-earned dollars. Why? The way I see it, nobody cares more about my money than I do. You should feel the same about your hard-earned dollars.
“I’m now into my early 40s and my days investing in high-priced mutual fund products are long over…I invest in dividend paying stocks and low-cost Exchange Traded Funds now.” says Mark of My Own Advisor.Nobody cares about your money as much as you do Click To Tweet
Now It’s Your Turn!
From our expert answers, its obvious to see that there’s no single best way to start investing and everyone had to start somewhere – even if it meant making mistakes along the way.
How did you get your start in investing? Would you do anything differently? Tell us in the comments below!