How to Start Investing: A Simple Step-by-Step Guide

The good news is that it's a lot simpler than most people think. Here's the complete process, step by step.

Step 1: Open a brokerage account

Before you can buy anything, you need somewhere to put your money. That's where a brokerage account comes in.

A brokerage is a company that handles stock trades for you. You deposit money into your account, and when you decide to buy a stock, you place the order online. The brokerage then sends that order to the stock exchange and completes the purchase on your behalf.

Opening a brokerage account is the easiest way to get started. Large brokerages like Fidelity and Charles Schwab charge nothing to open an account and no commission on most stock trades, so you won't lose money to fees just by getting started.

Once your account is open, link your bank account and transfer in the money you want to invest. It can take a day or two for the transfer to clear, so plan for that.

Under 18 like me? Most brokerages require you to be an adult to open a standard account, but many offer custodial or youth accounts that a parent or guardian can help you set up. For example, I have a fidelity youth account. This account lets me make my own decisions, but is under my dad’s tax brackets.

Step 2: Research what to buy

Here comes the fun part: figuring out what to invest in. Don't skip this step. Buying a stock just because you've heard its name is a gamble, not an investment.

Sites like Google Finance, Apple Stocks, and The Motley Fool offer great data to help you research companies, including their price history, earnings, and recent news. If you want to learn more about how to pick the right stock, read about it here.

Step 3: Buy your first stock

This is the moment you've been working toward. Log in to your brokerage's website or app and click "Trade."

From there, search for the stock you want using its ticker. A ticker is a short abbreviation that identifies a stock. For example, Microsoft's ticker is MSFT, and Apple's is AAPL.

Next, decide how many shares you want to buy. Not sure what a share is or how many you should get? Read more here.

Finally, review your order and click "Place Order." That's it. You're officially an investor!

When should you place your order?

Timing matters more than you might think. The major U.S. stock exchanges are open Monday through Friday, from 9:30 AM to 4:00 PM Eastern Time (8:30 AM to 3:00 PM Central). Placing your order during these hours means it will usually be filled right away, at a price close to what you see on your screen.

You can still place an order outside those hours, but a regular order won't be filled until the market opens again. That's why buying outside market hours generally isn't recommended: the price can change a lot overnight, and you might end up paying more than you expected.

If you really want to trade outside normal hours, some people do. It's called after-hours trading, and it comes with its own risks. Read more about it here.

It really is that easy

Honestly, it's as easy as three steps, and the whole process probably takes less than thirty minutes. So the next time you have half an hour of free time, you really should start investing!

This post is for educational purposes only and isn't financial advice. Always do your own research before investing.