How to Get Started if you Want to Invest in the Stock Market

Stock MarketI had the pleasure (or mis-pleasure possibly) of working in the retail brokerage industry for a little over four years and every day I spoke with dozens of individuals who had no idea where to start when it came to investing in the stock market. Whether it was lack of time or knowledge, they simply did not know where to start and many were unfortunately held back by this naivety. Most knew that they needed to be in the stock market, but many failed to take action simply because they didn’t know where to start. My desire is to combat the assumption that it’s difficult to get started with investing in the stock market and will provide a few simple ways to get started.

Look No Further Than Your 401k

For many professionals, the simplest way to start investing in the stock market is through their 401(k)s. Some might say that a 401k is not being in the market, but the fact is that putting your money into a 401k is investing in the stock market. The beauty of the 401k is that it gives you a number of benefits:

  • The money comes out of your paycheck pre-tax, creating tax savings
  • The possibility of a 401k match – free money anyone?!
  • A select group of mutual funds (generally speaking) so you’re not overwhelmed with options

This is not to mean though that all 401k plans are great or that there aren’t things you shouldn’t look out for, because that wouldn’t be the case. The big key with investing in your 401k plan is to avoid any mutual funds that are expensive, meaning charging excessive fees. The fund may look good, but if they’re fee heavy then that will only eat into your returns.

Choose a Broker to Get you Access to the Stock Market

Let’s say you don’t have access to a 401k or want to invest in the stock market outside of it. The best route for many to take is to find an online brokerage to do business with. This will open you up to pretty much any mainstream investing option that you can imagine. The key is to find a broker that fits your needs and offers you tools you can use to educate yourself. There are many brokers to choose from, each with their own offerings to differentiate themselves but you need to find one that works for you. As with a 401k, watch out for ones that are fee happy so as to not hinder your returns. One added tip – many brokerages offer automatic transfers of cash into your account. If they do, take advantage of them so you can actively be setting money aside to invest in the stock market on a regular basis.

It all Comes Down to Education

The most common issue I saw with those not knowing how to start investing in the stock market was education. That lack of education makes it very easy for many to feel overwhelmed when it comes to investing in the stock market. What I’ve found though is that a little education can go a long way to helping many feel more comfortable with getting in to the stock market. The key is knowing where to get it.

I believe that one of the best options to look at is paper or virtual trading offered by many brokerages. It allows you to use fake money to help you get your feet wet in investing without losing actual money. Another great option that many brokerages and some 401k plans offer is online educational course, many of which are free and go from very basic to fairly in-depth. Not only will this allow you to become more knowledgeable with stock market basics, but more comfortable as well. If you’re with a broker and don’t know if they provide such benefits, you should ask about them as any broker worth his or her salt has some sort of course you can take to help get you started investing in the stock market.

How did you get started investing in the stock market? What is the best way that you think someone can get started?

[Featured image courtesy of]

Join our newsletter

Get financial tips from a licensed professional directly to your inbox.

Powered by ConvertKit

About John S

John Schmoll is the founder of Frugal Rules, a Dad, husband and veteran of the financial services industry. He's passionate about helping people learn from his mistakes so that they can enjoy the freedom that comes from living frugally.

Speak Your Mind