Would like to start buying stocks/ETFs but not sure where to start

EstherKim·Apr 14, 2021

Posted in:Advice Lifestyle Management and Leadership Personal Growth Productivity Resources Money

Hello! Although late, I would like to finally jump on the train and start investing in stocks/ETfs/Roth or Traditional IRA(?) for my retirement and/or live a comfortable life financially. Currently, I live in California, USA, so living expense prices are killing me but I am close to family which is the plus. I'm not sure where to begin, so if you have any recommendation on books or YouTube channels, I would much appreciate it! Thank you!

LeenaB·Apr 14, 2021

Hi @EstherKim - congrats on the start of your financial journey! At a high level, there are "buckets" where you would start investing (purchasing ETFs/mutual funds/indexed mutual funds aka index funds) into. I would not recommend individual stocks.Buckets:* For retirement - 401(k) if this is an option with your employer (the funds you go put in here are pre-tax, and the money that will grow there will get taxed when you withdraw after retirement)* For retirement - traditional IRA (if you don't have a 401(k) option). Note you CAN'T contribute to both 401(k)s and traditional IRAs at the same time.* Roth IRA - post tax retirement contribution (you can also use this for education FYI). This money will not get taxed again as it grows, and once you withdraw after retirement.* Non-retirement "regular"/individual investment brokerage accounts - all contributions are post-tax and the money gets taxed as well You can open brokerage accounts with Fidelity, Vanguard or Schwab. Each of these also have roboadvisors. You can't open a 401(k) by yourself.You would then purchase index funds or ETFS in these accounts. I recommend index funds not only coz they are low cost, but also coz you can automatically invest every month (you can't purchase ETFs automatically/auto-setup not possible).Books that I recommend (especially if you're starting out):- The automatic millionaire by David Bach- I will teach you to be rich by Ramit Sethi (the book is actually very good, ignore the silly title!)- The Bogleheads guide to investing (more intermediate, but is a great book once you get your foot in)Finally, I had done a talk on personal finance 101 - I'll be happy to share the link if you're interested.Happy to chat further if you have any questions.

EstherKim·Apr 15, 2021

Thank you for the information and book recommendations! Yes, I would to watch your talk if you can share your link :) For the 401(k), is it better to put it in pre-tax or roth? I hear so many different opinions, but can never get a full answer.

melaniewilmesher·Apr 15, 2021

HI Esther, great question! Honestly, that really depends on you. Do you have a preference around paying taxes on the money before it goes into the account or would you rather pay taxes when you withdraw the money? Things to consider when weighing your options are things like your current tax bracket and if you imagine that being higher or lower around the time you'd like to retire. At this time, taxes are historically low, so there has been more conversation around Roth contributions with the idea that the taxes you will pay now will be lower than what you would pay in the future and your money will grow tax free. Again, there's no way to know exactly what taxes will be like in the future but it's a factor to consider. So once again, it comes down to your personal preference. I also wanted to add that after you've made the contributions that leenab suggested, you can always explore index funds. They typically have lower expense ratios (fees) than mutual funds and they track with the major indexes like the S & P 500. They are always a good way to get started investing rather than picking individual stocks you hope will grow free. Hope that helps!

AmandaWilliamson·Apr 15, 2021

Check out Kiplinger's finance magazine. It's a good place to get solid money advice in addition to investing logic. Also, there's a group on Facebook called Stock Sisters. It's an amazing group of women (<~ can't emphasize that enough). It's women encouraging and helping other women. The creator of the group has hours of learning modules that will take you from start-to-okay candothis.

EstherKim·Apr 19, 2021

Will check them out! Thank you for the recommendations!

Ray29·Apr 16, 2021

https://www.etoro.com/Super easy and you can copy other people's portfolio's/trades - so you don't need to worry about watching the market every day and buying/selling yourself. Plus they normally talk through why they are investing in what - so you learn too.

EstherKim·Apr 19, 2021

Will check it out! Thank you for the recommendation!

Annae·Apr 20, 2021

https://www.ellevest.com/Ellevest is the first female investment company to reach over a billion dollars in woman owned wealth.