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 Market Mysteries of the week

  Okay, I’m ready to invest. Where do I start?

Answer:

Open an account. Start small. Stay diversified. Keep a long-term mindset.

How do I know I'm ready to start investing?

Investing in

the stock market is for everyone

. But it

might not be the right time for everyone

. You need to

have your basic financial health in order

to be able to start growing your wealth.

When we talk about investing, we talk about the typical Scoop investor who has

paid off all of their high-interest debt

. That means things like credit cards, where the interest rate is double-digits. We don't have to be debt-free to invest. It's okay to invest alongside student loans or mortgages with low-interest rates, as long as you're making the payments. The deciding factor is the interest rate. Credit cards eat away at your wealth with interest rates of 10-20% annually. The stock market has grown by 8-10% annually. So you can't really outgrow that negative draw.

The Scoop investor also has

enough cash set aside for emergencies

like losing your job or some unexpected medical expense. There's no perfect rule, but many people think about saving six months of income or expenses.

You should also never invest money that you'll need in the next 3-5 years. Investing takes time. Companies don't grow overnight. The market crashes. You have to be prepared to

leave your money alone for the long term.

Should I be doing this in a retirement account or something else?

Most people think about doing a mix.

Investing for retirement is great, and retirement account investments can grow quickly because they're excused from some taxes. But your money is locked away until you're 60. You'll likely want to

have some money saved and growing for significant expenses

along the way, like paying for a home or education.

Always check if your employer matches your retirement account contributions.

Many employers will add $X to your account for every $X you contribute. That's free money.

How do I know what to invest in?

Investing starts with an opinion.

You can pick a particular company you want to put your money behind or select an industry or a whole economy.

The typical Scoop investor

starts by investing in the whole economy

, buying every company so that as the economy grows, our wealth grows with it. For most Scoop investors, purchasing a single fund that spreads their money across the whole economy is all they ever need. If you find a company you want to own, you can always add that in later.

Either way,

it's essential to understand what you're trying to invest in

. Different mutual funds, index funds, ETF's, etc., are all just different packaging. Vanguard, Fidelity, iShares, etc., are all just different branding. You don't head to the supermarket without intention. You also don't start by saying I want a General Mills product. You say, "I need some graham crackers," then decide what to buy based on the brand's price and quality.

Can I invest in the same stuff everywhere?

Pretty much.

"Brokerage" or "self-directed" accounts are like the supermarket.

The same options are available at most stores, aka investment platforms.

Figure out what you want, go to the aisle, and pick a brand. If you're going to invest in US companies, you have to look up US Total Market, select a trusted brand you've heard of like Vanguard, Fidelity, or iShares. Make sure it has billions of other people's money in it (Assets Under Management), and the fees (expense ratios) are low (less than 1%). In a brokerage account, you can also choose individual companies.

Retirement accounts typically have a restricted menu.

Your employer partners with one provider and allows you to choose from their branded packages for US companies, international companies, tech companies, etc.

Okay, that sounds easy enough, but where do I start?

We have more guides and tutorials here

. Send us any questions you have. We've helped tons of people through the process. You can do it.

Feel free to share this with anyone who might find it helpful.

💙 The Share Scoops Team

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