Start Investing

Document created by janetsalt on May 20, 2016Last modified by on Dec 5, 2016
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Usually advice runs this way: first pay off debts, then build up your savings, then start investing. But I think it important to note that the same principle that makes debt harder to pay off if you ignore it (accumulating interest) is the same principle that makes it difficult to get ahead if you start investing later in the game. If you have debt, it should be central to your budget. (I really liked the submission that outlines The Avalanche Effect.) But rather than moving all of the extra cash to debt, I'd suggest investing some of it.


Not all mutual funds require a buy-in of $2,500. (And up.) You can make initial investments for as low as $100. This article (Great Funds You Can Own for $500 or Less-Kiplinger) on Kiplinger lists several that you can start with just $100, $250 or $500, and Charles Schwab now offers funds that start at $100 as well. The list on Kiplinger is by no means exhaustive. Start researching funds on Morningstar ( and make a list of the funds that you would like to invest in.


If you want to try out the funds before actually investing, marketwatch ( has tools that let you simulate investing.


What I've done:


I didn't have much capital to work with on the outset. I made investing a goal, and tried to save $50 a month (which for me, was as simple as bringing my lunch to work with me more often and making do with the terrible coffee in the lounge rather than buying it from the friendly fellow in the donut cart on 18th and 6th. I didn't say that this was going to be easy.) (That coffee was so bad.) In the three months spent setting aside enough money to make an initial investment, I "simulated" investments on marketwatch and got my head around the terminology. I found my $500-dollar fund on Morningstar (the fund search requires membership, but they offer a 14-day free trial, so get on it!).


Once you've a few long-term investments established, it's not a bad idea to start trading. Robinhood, a new app available for download on most smartphones, offers no-fee trading. All they ask is that your account have at least $20 before you start.


My budget is such that settling debt is still priority. Approximately $800 a month is siphoned directly to fedloan. And another $500 is saved. (For a high-yield savings account, I highly recommend American Express.) What extra money I have to invest with is just that... extra. But if you consciously decide to maximize how much "extra" you have, it's definitely in your best interest to start investing.