Investing 101: How do you actually do it?

“You should invest”, “everyone needs to be investing”, “investing for your future is so important.” You’ve probably heard some version of this recently (like last week, from us!) but so much of this advice skips the next part: how do you do that exactly?

If you’re just starting out, the best place to invest for long term goals like retirement is a tax advantaged account like a 401(k) or an IRA. If your employer offers a 401(k), that’s going to be the most straightforward option for you. If they don’t, an IRA (Individual Retirement Account) offers similar tax benefits in a personal account.

Once you have your account opened your work isn’t quite done. You’ll fund the account by contributing money to it (via payroll deduction for a 401(k) or by transferring cash for an IRA) but you’re not actually investing yet! You’ve got to make a decision on what investments to choose. This difference between the accounts (401(k) and IRA) and the investments the accounts hold (stocks, ETFs, index funds, mutual funds) trips up a lot of people. We’ve got a great explainer on the difference, and the most important things you need to know, right here.

If you want to learn more about investing at different stages in your life, we have an upcoming live event you might be interested in. Space is limited so register here now!