Investing, Resources + Tools

WTF is Investing and Where Do I Begin?

Full disclosure–I did not start contributing to a retirement account until 2 years ago.

Even more disclosure–I did not know the first thing about investing until about 4 years ago.

But I’m guessing I’m not the only one. It’s no surprise that the United States is severely lacking in financial education for its youth. Many people never learn what a credit score is, how to properly balance a checkbook, or how to plan for retirement! As a result, 1 out of 3 Americans have NOTHING saved for retirement, according to a 2016 survey of over 4,500 people conducted by GoBankingRates.com.

I graduated from college in 2009, when the recession was still a dark cloud over the U.S. and I took the first job I could find, which had nothing to do with my degree, did not offer benefits, and left me with nothing to put toward any sort of retirement savings each month.

I started my master’s program in 2010, graduated in 2011, and began my PhD program in 2012. During that time, I did have student health benefits from the university as long as I was a full-time student receiving graduate funding from the department. However, I still didn’t have any extra money to contribute to retirement savings (note: I did save some money, but this was earmarked for emergencies and not enough to put toward a legitimate retirement account).

When I got my job in Columbus in October 2015, I finally had a position that offered health and retirement benefits (and vacation time!). For the first time in my life, I was able to select what percentage of my paycheck to contribute to retirement and what kinds of funds I wanted to invest in. I was making more money than I had in my entire life, so I maxed out my retirement contribution in an effort to make up for lost time.

I had questions.

My knowledge of investing was very basic. I knew that I could earn or lose money based on whether the market rose or fell, but I had no idea how much the type of funds I chose could affect my returns. There was so much stock market jargon to learn that I felt overwhelmed at first.

But it doesn’t have to be overwhelming!

“There seems to be some perverse human characteristic that likes to make easy things difficult.”

This is one of my favorite quotes from Warren Buffett. The man is worth over $66 billion dollars and built his wealth on two things: Continuous learning and making calculated decisions.

Whether you are building your retirement savings or investing in the stock market for fun, the good news is that you don’t have to be a financial expert to make money! When I was finally able to invest my own money and plan for retirement, I knew I was behind on the curve and needed to start learning about managing my money and how to make it work for ME.

Fortunately, my employer offers retirement benefits through a 401K that allows me to invest my contributions in a variety of funds in the financial market. However, even if your employer does not offer this benefit, you can still invest your money directly with various stock trading companies.

Fortunately, we are children of the 80’s and 90’s–we grew up with technology and, therefore, realize we have the ENTIRE INTERNET at our fingertips! When I finally got to the point where I was able to start investing my money, I Googled, “Wtf is the stock market and when do I get money?”

Not really. But I did Google the definitions of the most basic investment terms, which began my education of how the stock market works and how it can build my savings over the long-term. And that’s exactly what I needed as a 28-year-old post-grad–a long-term strategy for building my retirement savings.

WTF is Investing and Where Do I Begin?

The basics of investing

What is the stock market? In the most simple terms, the stock market is a particular market where stocks and bonds (e.g. shares of a company) are bought and sold. If you own a share of a company and it makes a lot of money, then you also make money. The opposite is also true, so there is a certain amount of risk that goes into selecting where you want to invest your money.

How do I invest in the stock market? There are a few ways to invest in the stock market.

1) Find a stock broker or financial adviser that will do it for you. Keep in mind that you will also have to pay for this individual’s services.

2) Invest through your employer. If your employer offers retirement benefits, you will be able to select a specific percentage of your paycheck you would like to contribute to retirement. This amount will automatically be deducted from each paycheck and automatically sent to the investment company utilized by your employer. You will also be able to choose from a list of funds offered by the investment company, so you still have some choice over where your money is invested.

If you’re not well-versed in investing, this is an awesome benefit to have since the company can guide you through the process and provide more educational resources. A major plus to this opportunity is that, hopefully, your employer will match a certain amount of your savings when you retire (free money!).

3) Choose an investment company and do it yourself! Even if you are currently making retirement contributions through your employer, many people also go this route to learn more about investing and increase their returns. Remember–you don’t have to be an expert to choose this option!

How do I choose what company to use? With the internet, financial literacy never seemed so possible. Fortunately, there are a lot of tools out there to help you decide which company to use to invest your money! One is a guide created by Reviews.comThe Best Online Stock Trading Sites for Every Type of Investor

Reviews.com utilized the expertise of two experienced investors to evaluate 13 different online stock trading sites. From these, they compiled a list of the 5 best sites and analyzed their pricing structure, platform, research, and the various tools they offer to investors.

The awesome part is that this list is useful for both beginners and seasoned investors!

But I’m also a beginner, so how do I know if this online stock trading guide is useful for experiences investors? Simple, I asked my dad to review it.

This may sound kind of lame, but let me tell you a few things about my dad…

He’s a retired small-business owner who spends his days planning vacations and collecting trains (envision Gomez Addams in his train room racing the Orient Express around Dead Man’s Curve). Financial planning isn’t just a way of life for him, it’s also one of his hobbies. He has the correct temperament and attitude required to be a successful investor. I trust his financial advice more than anyone else’s because I’ve seen the results first-hand and, in the process, I’ve learned that personal finance does NOT have to be overly complicated.

I will note that I cannot speak to the merit of each individual stock trading site reviewed in this stock trading guide, as I have not personally invested with them or tested their platforms. Instead, I evaluated the usefulness of this guide based on the information included and whether I felt it allowed me to make an informed decision about the 5 companies featured in it.

So, what do I like about this stock trading guide from Reviews.com and why do I think it will be super useful for you?

Where did this list come from?

Did some sketch-tastic con artists pay to have their websites promoted? Did they throw darts at a dartboard covered in stock trading companies? Where did this magical list come from?

Well, what better way to start than to ask experienced investors? Reviews.com compiled their list based on the expertise of two stock traders–a day trader and a financial commentator with more than 20 years of experience. Any person successful at anything will tell you that if you want to learn how to do something, ask the people that do it for a living!

Whenever I’m presented with information, I want to know where it’s coming from. I appreciated that this guide took into account the reviewers’ specific backgrounds and the fact that each will inherently prioritize different things based on their education, experience, and goals. I felt that Reviews.com attempted to strike a balance between the priorities of each to create a list applicable to beginners as well as experts with different financial goals.

Tables

Anyone who knows me knows that I’m all about some spreadsheets.

Budgeting? Spreadsheet. Debt pay-off? Spreadsheet. Car buying? Spreadsheet? Vacation packing list? Spreadsheet. World domination? Spreadsheet.

You get my drift…

Before even getting into the nitty-gritty details of each online stock trading site, the user will find a large table at the very top of the guide identifying the 5 stock trading sites selected for the guide and their corresponding website, stock fees, account minimums, and types of trading they specialize in. A little further down, you will find more tables comparing sites based on expertise and net returns.

Cue the nerd squeal!

Tables make everything easier. I don’t know about you, but I get REALLY annoyed when I’m sifting through an article for information only to discover that it’s buried incoherently beneath fluff or, even worse, that it’s just click-bait that provides no useful information whatsoever. I end up leaving a website if I can’t easily find what I’m looking for because ain’t nobody got time for that!

A few manageable options

I’m no investment expert (for real, I’m still marveling that my employee retirement account is earning a return). A giant list of stock trading companies is overwhelming, especially if you have no idea what you’re looking for. How many times have you wished someone else had done the legwork and whittled a world of possibilities down to 5 or 10 choices?

This online stock trading guide does exactly that.

Reviews.com focuses on 5 online stock trading sites, some of which you’ve probably heard of even if you aren’t familiar with investing and trading. They’re not sites with sketchy backgrounds that look like they were designed by my Great Dane. You’ve probably heard of a few of them, you’ve probably seen a commercial or two, and you can be sure they’re legit.

Context

One thing I REALLY appreciate is when reviews provide context to their recommendations.

In listing their 5 Best Online Stock Trading Sites, Reviews.com immediately identifies the strengths of each one. This is useful because no two investors are the same, and a site catering to an active trader will not be as valuable to a beginner.

The beginning of the guide is broken down into multiple sections, such as Best Platform, Best for Beginners, etc. Again, this guide spells it out for you and allows the user to decide what information is most valuable to them. After identifying the strengths of each stock trading site, Reviews.com provides a general review of each site, complete with their strengths and weaknesses compared to the others.

It’s easy to get discouraged when faced with so much information as a beginner. However, I was able to view this guide in the context of my personal goals instead of trying to cherry-pick information that may or may not actually work for me as a beginner investor.

Cost

You know what really steams my clams?

Account minimums.

I have to deal with that garbage from bank accounts, why should I take it from a broker? I’m sure there’s a reason for banks doing it, which I would still say is highway robbery, but if I’m investing money of my own free will, the last thing I want to do is worry about getting hit with a fee for falling below an account minimum.

Investing your money can be exciting, so why worry about hidden fees that ruin your whole experience? This guide includes costs you should keep an eye out for such as cost per transaction, account minimums, charges for data, research, and tools, and finally, extra costs for services such as 24-hour access to financial experts. But don’t worry–many sites offer additional services like this for free!

Platform capabilities

You might find the best stock trading website in the world, but it doesn’t mean a thing if the platform is unusable! If I go to a website and it looks like it was designed by my dog in 1998, I’m not going to use it no matter how awesome the actual company is.

Seriously, we live in a world with Google and SpaceX–make your website functional and responsive!

Reviews.com identifies whether a site’s platform is up to snuff and what features make it easy to use. This is invaluable as a beginner investor. The last thing you want to do is try to decipher a dysfunctional website when you’re already nervous about taking the plunge and investing your money. The online stock trading guide also provides direct links to each company’s site so you can explore while learning about each one.

Information and tools from Reviews.com

What is the difference between stocks and bonds? What is a future? What does Forex mean? Have you just made a huge mistake??

If you’re taking the time to learn about investing, then probably not.

You don’t have to start out as an investment expert as long as you’re willing to keep learning! Reviews.com includes a glossary of common terms used in stock trading to help you out while you’re checking out each site on the list. I REALLY appreciated this detail because it shows the guide actually caters to investors of all levels.

After reading the reviews and forming your own opinions, Reviews.com offers a few tips on how to get started, such as brainstorming what kinds of companies you want to invest in. The online stock trading guide also mentions a couple of sites that offer virtual trading platforms so you can practice with fake money before throwing down the real stuff!

It’s no secret, I’m a HUGE proponent of reviews. I don’t make a major purchase without extensive research, so why would I invest my money without doing the same? I found The Best Online Stock Trading Sites for Every Type of Investor on Reviews.com to be an excellent resource for beginner investors based on its comprehensive overview of each featured stock trading site, honest reviews, and applicability to both beginner and experienced investors.

After finally pulling my life together following my escape from academia, I’m proud to say that I am back on track and saving for retirement. But that doesn’t mean I’ve stopped learning. If you’re still confused by the stock market and investing, keep researching!

Interestingly enough, this is an area where Millennials currently have the upper hand–time is on our side! Investing only sounds scary if you’re not familiar with how the market operates. There is a certain amount of risk involved, depending on how you invest your money. However, investing a percentage of your income over a long period of time can provide you with a secure and comfortable retirement in the future!

(Visited 48 times, 1 visits today)

2 thoughts on “WTF is Investing and Where Do I Begin?

  1. Great overview, Emily! I’ve had great experiences with Fidelity and E-Trade (both listed on the Top 5 on reviews.com).

    Have you tried Betterment? They’re a newer player in online finance, and they use robo-advisors to keep fees low. They also automatically rebalance your portfolio so you don’t have to actively manage your account. I just set and forget mine. And check the growth just once/year to make sure I’m still happy with it. It’s been a game-changer for me 🙂

    1. Thank you so much, Michelle! I am not familiar with Betterment, but now I’m totally going to check it out! 🙂 From how you describe it, it sounds like my kind of setup. I truly believe the less I look at my statements, the better! That kind of automated system sounds awesome–completely remove the middle man, which is just another expense… 😉

Leave a Reply

Your email address will not be published. Required fields are marked *