- Save a 3-6 month emergency fund (avoid forced selling in urgent situations)
- Pay off high-interest credit card debt (interest rates far exceed stock returns)
- Open a tax-advantaged account (e.g., IRA/Roth IRA)
Comparison factors:
✓ Commission fees (mostly zero now)
✓ Platform usability (app ratings)
✓ Investment products (support for ETFs/options/international stocks)
✓ Research tools (what data is provided)
- Don't wait to save a "lump sum"—$100 is enough to begin
- Use dollar-cost averaging: invest a fixed amount on a fixed date each month to average out costs
- Beginners should start with index fund ETFs (like SPY tracking the S&P 500)
Simple framework:
1. How does this company make money? (Business model)
2. Are profits growing? (Review 5-year financials)
3. Who are the competitors? (Moat)
4. Is the price reasonable? (Compare P/E ratio to industry)
Remember: Investing is not gambling—it's sharing in economic growth. Use money you won't need soon, hold for the long term, and time will be on your side.
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