The Ultimate Beginner's Guide To Investing In The Stock Market

How To Start Investing In Stocks

You’re probably thinking: but the stock market isn’t for me. And it’s true, to a point. When we think of Wall Street, we often think of white men in suits who don’t necessarily reflect us or our values. What’s also true is that we still have a huge gender pay gap where women only make $0.82 for every $1 that men make. And when a recession hits or layoffs start happening, women are often the ones hit hardest. Just think back to the economic impact of the pandemic. Now, more than ever, we women have to put our money to work for us, through investing in the stock market.

Plus, investing in the stock market has never been easier. With apps like Robinhood, Eight Core and Stash, investing is so much more accessible than it was for our mothers and grandmothers. Yet, many of us don't know what to do beyond purchasing the random stock that was given to us when we opened our account. But, here’s another secret those suited-up Wall Street types don’t want you to know: you can invest with as little as $100, and it all starts with your mindset.

Design Your Investing Mindset

The first item to tackle when it comes to investing is your mindset. A lot of people fail with sustainable and consistent investing because they don't have the proper investor mindset. Of course, investing in the stock market does involve risks, but if you don't take any risks, there are no rewards.

The biggest mistake new investors make is playing the short game and panicking at the first drop in value. They get nervous and cash out before they’ve even given the investment time to work. When you start thinking about investing, you want to consider the long term. Think about it as if you were meeting a person for the very first time. Would you shut the relationship down after just one week of getting to know each other? Or would you actually put in the time to get to know them more, to see if they're truly the person that you want in your orbit? The same goes for your investments.

Think about the relationship you want to have with your money. How does that relationship live on when you step out of the room? Is your money attached to a lot of negative emotions and past traumas? Or do you have a hopeful view of your money and what you want it to do for you? Is your money going to last for 10, 15, or 20 years, or even for multiple generations? Once you define your relationship to your money, and how you want it to work for you, you can keep those goals in mind and use them to guide you as you build an investing plan.

Build Your Investing Strategy

With your money mindset in check, you can determine your actual strategy for investing, and how you get started.

The first thing you're going to need is a brokerage account. A brokerage account is like your checking or savings account, but it’s specifically used to purchase stocks. When you’re considering which brokerage account to set up, look at the tax benefits and income limits of each. If you're a beginner and you're not certain you want to invest long-term, go for something simple, and start with an easy-to-use brokerage account like Robinhood.

Once you have your account, you’ll want to fund it. Now, I know for many of us, it might not be in our best interest to spend thousands and thousands of dollars investing in the stock market, especially if we don't know what to do with the money, or are not yet confident in our investing capabilities.

I like to start with $100 and I recommend my students do the same. In fact, it’s how I started investing in the market while making just $40,000/year straight out of college.

It's not about having too little to invest, it's about where you are going to invest. There are lots of companies in the market with shares worth less than $100, like Coca-Cola Company at $60.01/share, AT&T at $20.38/share, and Roku Inc. at $65.53/share. You can start investing with just $20, $30, $40 or $50 a month, and build up your confidence until you're ready to spend more.

Investing With Debt

When I started investing in the stock market, a lot of people told me that I shouldn't have, because I had debt. But the reality is, the average American household is $165,388 in debt. How are we supposed to build wealth if we're always focused on getting rid of our debt? I counter that we begin investing while paying down debt. If you’re able to make a few, small cuts to your monthly spending, you can allocate those dollars toward investing, rather than just putting everything extra toward debt.

Decide Where to Invest

Start by taking inventory of the companies you already buy goods from. Through investing, you have the chance to start owning a part of that company and actually reverse the relationship of spending.

Let's take Lululemon for example. You can find out the price of Lululemon stock with a quick Google search. At the moment, the price of Lululemon stock is $320. But if you don’t want to spend $320 on a share, you can actually purchase a part of Lululemon with just a dollar amount. Let’s say you purchase $100 worth of Lululemon. You'll now have roughly 25-30% of a share. If Lululemon increases in value, so does your share price!

As you’re considering your options, there may be times where you’ll need to learn some technical analysis to see why the company is moving up or down in the market, to ensure that your investment is well-informed.

If you don't want to just buy one stock in one company, you can always buy an exchange-traded fund like SPY that tracks the movement of the entire stock market. Historically, the stock market has gone up after dipping down, making this another great avenue for beginner investors.

Taking Your First Steps

Investing in the stock market can be scary, especially if it's something you weren't raised around, or you didn't grow up speaking about money at the dinner table. However, it's an important part of adulthood that we need to address more often.

As women, we want to start understanding why our money treats us the way it does, and how we can have it become our biggest advocate. Even though investing can be daunting in the beginning, it's worth it to keep pushing through.

If you need a little extra nudge to get started, you can take my first stock challenge where I'll show you exactly how to take that $100 and invest in the stock market.