Introduction

Your 20s are the best time to start building your financial future. With time and the magic of compound interest on your side, even modest investments can grow into significant wealth. This beginner’s guide will walk you through the key steps to start investing in 2025—even if you don’t have much money to spare. Let’s get started!

1. Start Small, Think Big

One of the biggest myths about investing is that you need a lot of money to start. Platforms like Acorns, Robinhood, or Stash make it easy for beginners to invest with as little as $5.

Why It Works:

• Small, consistent contributions build discipline.
• Over time, these small investments add up thanks to compound interest.

Example: Let’s say you invest $50 per month into a diversified ETF with an average annual return of 8%. In 10 years, your portfolio could grow to over $9,000, even though you’ve only invested $6,000.

Action Tip: Open an investment account today and start with what you can afford, even if it’s just $5 or $10.

2. Understand Your Investment Options

Before diving in, familiarize yourself with key investment types:

• ETFs (Exchange-Traded Funds): Diversified funds tracking markets, like the S&P 500.
• Index Funds: Similar to ETFs, but typically purchased through mutual fund companies.
• Stocks: Shares in individual companies.
• Bonds: Loans to companies or governments with lower risk than stocks.

Example: An S&P 500 ETF gives you exposure to 500 of the largest U.S. companies without needing to pick individual stocks—a great starting point for beginners.

Pro Tip: Use resources like Investopedia or YouTube channels like Graham Stephan for beginner-friendly investment education.

3. Automate Your Investments

Automating your investments makes saving effortless. Most platforms allow you to set up automatic contributions from your bank account to your investment account.

Why It Works:

• Removes the temptation to spend the money elsewhere.
• Builds consistency, which is critical for long-term growth.

Example: A Chicago college graduate automated $50 every payday into ETFs and grew their portfolio to $3,000 in just two years.

Action Tip: Set up an automatic transfer to your investment account right after your paycheck clears.

4. Focus on Long-Term Growth

Investing is a marathon, not a sprint. Avoid chasing short-term market gains and focus on a buy-and-hold strategy. The stock market may fluctuate in the short term, but it historically trends upward over the long term.

Why It’s Important:

• Trying to “time the market” often leads to losses.
• Holding investments for the long term reduces tax liabilities and increases gains through compounding.

Pro Tip: Set specific financial goals, like saving for retirement or a home, and allocate your investments accordingly.

5. Educate Yourself

Investing can feel overwhelming at first, but the more you learn, the more confident you’ll feel. Thankfully, there are countless free or affordable resources to guide you:

• Books: The Simple Path to Wealth by JL Collins or Broke Millennial Takes On Investing by Erin Lowry.
• Podcasts: BiggerPockets Money or The Dave Ramsey Show.
• Online Communities: Join Reddit forums like r/personalfinance or r/investing for beginner-friendly advice.

Action Tip: Dedicate 15 minutes a day to reading an article, listening to a podcast, or watching a video about investing.

Call-to-Action

Are you ready to start investing and take control of your financial future? Share your investment goals and first steps in the comments below. Let’s build wealth together, one dollar at a time!