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How to Start Investing: 6 Steps to Jumpstart Your Portfolio

When it comes to building wealth over time, investing is one of the best steps you can take. However, aspiring investors may be unsure how to get started. The truth is that starting an investment portfolio isn’t as hard as it sounds. And you can begin at any time. 

Whether you’re a recent college grad or seasoned professional looking for a fresh start, you can start investing with a few key steps. This guide will help you open your first investment account, choose the right strategy for you, and start making your money work for your future. 

1. Start Now

Many people wait for the perfect time to start investing. You might be waiting for that salary increase or to finally pay off your debt. However, the best way to start investing is to start now. In other words, it’s never too early nor too late. 

You can start investing at any income. Even just a few hundred dollars per month will grow over time, and you can increase your investments as your income changes. As for balancing your investments with debt payments and savings, it can be a tricky balance. Building an emergency fund and paying down debt should still be a top priority, so you might have to start investing on the lower end until you meet those other financial goals. 

2. Learn Your Investment Options

When you start investing, you’ll have several investment options to choose from. You’ll want to learn about these options before opening your first investment account. Many people will choose to diversify their portfolio by investing in stocks, bonds, and funds. 


A stock is a share in a publicly-traded company. When you own a stock, you own a small piece of the company. The value of the stock changes with the company’s value. You can hold your stock for as long as you’d like and sell it when you’re ready. 

Stocks are a higher risk and higher reward investment option. This is why many financial advisors recommend that you allocate more of your portfolio to stocks when you’re younger. The price of the stock can fluctuate greatly, but you may see more earnings over time. 


While a stock is a share of a company, a bond is a type of loan. When you buy a bond, you’re loaning the money to a company or to the government. The company then pays the money back over time with interest. That interest becomes your earnings. 

Bonds are a lower risk investment option than stocks. This is particularly true for bonds with lower interest rates and those backed by the U.S. government. So, investors often allocate more of their portfolio to bonds when they’re getting closer to retirement. 

Mutual Funds

Investors also have the option to purchase groups of stocks and bonds in the form of mutual funds. When you invest in a mutual fund, you purchase a whole bouquet of securities along with a group of other investors. This purchase happens at the end of the trading day. The price of the mutual fund fluctuates as a whole. 

Index Funds

Index funds are types of mutual funds that follow a stock market index. The main indices in the United States include the S&P 500, Dow Jones Industrial Average, and NASDAQ. You’ll notice that your index funds rise and fall with the corresponding stock index. 

Exchange-Traded Funds

Exchange-traded funds, or ETFs, are another investment option that fall under the mutual fund umbrella. You can purchase ETFs at any time during the trading day. This is unlike mutual funds, since you have to wait until the end of the trading day to purchase those. Just keep in mind that like a stock, ETFs will go up and down in price during the trading day. 

While we’re focusing on the market here, there are plenty of other ways to invest that don’t involve stocks, bonds, or funds. Many people will build wealth, and find enjoyment, through avenues like real estate investment. Remember that a financial advisor can help you determine which investment options are best for you. 

3. Open an Account

Now that you know your investing options, it’s time to open your first investment account. There are three types of accounts that beginner investors should consider: retirement accounts, brokerage accounts, and robo-advisors. 

Retirement Accounts

Retirement accounts are your personal superhero when planning for the future. These accounts are also a great place to start your investing journey. Check whether your employer has a 401(k) or 403 (b) option (they might even offer a contribution match!). An individual retirement account (IRA) is another common investment option, and you might go in this direction if your employer doesn’t offer a 401(k) or you’re self-employed. 

Brokerage Accounts

If DIY investing sounds more appealing to you, a brokerage account might be the right option. You can use this account to buy and sell stocks as you’d like. Keep in mind that many online brokerages, like Fidelity, offer both retirement and brokerage accounts. 


When you have a brokerage account, you need to do your own research and pick stocks to invest in. A robo-advisor might be a better option if you want to avoid this step. When using a robo-advisor for investing, the online service will select stocks for you based on your goals and preferences. You will need to pay a small fee (that the robo-advisor will take out of your account), but this can be worth it if you want to save time and effort. 

Remember, there is no one-size-fits all investment account. Research various options and choose one to start out. You can then open new accounts as you max out your retirement and start meeting your initial investing goals. Again, a financial advisor can help with these decisions. 

4. Focus on Diversification & Allocation

Investing is a long-term game–at least for the most part. Remember that the goal of investing is to grow your money over time. You’ll notice that stocks fluctuate on a daily basis, so it’s important to stay patient and ride out these dips. 

However, you’ll want to check in on your investments occasionally for a few reasons. It’s important to make sure that your investments are diversified enough. Check whether your portfolio has a balance of domestic and international stocks, as well as a combination of stocks and bonds. This balance of stocks and bonds is called asset allocation. 

Changing Your Strategy Over Time

Above, we discussed that it’s common for younger investors to have more of their portfolio allocated to stocks. Investors who are closer to retirement might have more of their money in lower-risk bonds. 

Some financial advisors recommend subtracting your age from 100 to determine how much of your portfolio should be in stocks. So, a 25 year old would have 75% of their investments in stocks, while a 55 year old would have 45%. However, this is only a general recommendation. A financial professional will help you balance your portfolio to best fit your money goals. 

5. Fit Investing into Your Budget

While you’re investing to support your future, you still want your investing strategy to fit in with your current financial situation. And this means finding room in your budget to make investments. Again, paying down debt and building up an emergency fund are still among your top priorities (along with paying your bills, of course). Once you have those priorities set, you can ask yourself a few questions:

  • After savings and bills, how much money is left for investing?
  • Are there areas in your budget where you can cut back?
  • If you’re starting with lower investment amounts, can you make a plan to increase contributions?

Meeting your annual contribution limits in your retirement account may be your ultimate goal, but you have to start somewhere. Review your current budget and see how much you can contribute to your investment accounts at this time. Then review your budget and make a plan to increase your investments over the coming years. 

6. See a Financial Advisor

Once you decide to start investing, you want to make sure that your investment strategy fits into the bigger picture. And everyone’s big picture looks different. A financial advisor can help you manage your investments, so that your money constantly supports your future goals. They can also work with you to open your first investment account and make a plan for investing on a monthly basis. 

Your financial needs change with time and so should your investment strategy. The team at Second Opinion Partners is here to guide your financial choices through all of life’s milestones. Our expert financial advisors work with clients navigating life transitions, planning for retirement, or simply working to improve their financial wellness. Contact us today to schedule an appointment with one of our knowledgeable team members.


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