How much do I need to start?

Many brokerages allow fractional shares, so $25 a month genuinely works. Consistency matters more than the amount.

Should I invest my emergency fund?

No. Emergency money belongs in high-yield savings where its value can't drop the month you need it.

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LI-007

Investing Fundamentals

Investing is not stock picking. For almost everyone it is a small automatic contribution into a broad, low-cost fund, left alone for decades.

MoneyIntermediate 7 min read

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The guide

The order of operations

Work down this list before anything more exotic.

Employer 401(k) match — an instant return you cannot beat elsewhere.
High-interest debt above roughly 7%.
Roth IRA up to the annual limit.
Back to the 401(k), then a regular brokerage account.

Accounts vs. investments

An account is the container; the investment is what's inside it. A Roth IRA holding only cash grows nothing — you still have to buy a fund inside it.

Why index funds

A total-market index fund buys thousands of companies at once for a fee near 0.03%. Over long periods it beats the large majority of actively managed funds, and it needs no decisions from you.

The behavior that decides your outcome

Contribute on a schedule regardless of headlines, and don't sell during downturns. Time in the market, not timing, produces compounding.

Remember this

Take the full employer match — it's free money.
Roth = taxed now, tax-free later. Traditional = deduction now, taxed later.
Automate contributions and check the balance rarely.

Common questions

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