Summary
The term investing alone is enough to intimidate most people, but it doesn’t have to be. Whether you're looking to grow wealth, save for the future, or make your money work for you, the key is to start small and stay consistent.
Per research from Statista, “In 2024, 62% of adults in the US invested in the stock market. This figure is… still below the levels before the Great Recession when it peaked at 65 percent in 2007.”
This means that while more people are investing, many are still hesitant—often due to a lack of financial knowledge, fear of risk, or uncertainty about where to start.
Let’s break down the basics so you can start working towards your first investment.
Investing Defined Simply
Investing is putting your money to work so it grows over time. Think of it like planting a tree—the sooner you start, the bigger it can grow. Instead of letting money sit under your mattress, investing allows it to generate returns through stocks, retirement accounts, real estate, and other assets.
The best way to start is to start small. Even if you don’t have large sums of money, small, consistent investments add up over time.
Before you jump in, it’s essential to understand both the risks and rewards.
The Risk and Rewards of Investing
When looking to put your money to work, it’s important to understand what could happen with your investment over time.
Rewards:
- Your money grows over time through compound interest and market gains.
- Investing historically outpaces inflation, meaning your savings sustain value.
Risks:
- The market fluctuates, meaning investments can lose value in the short term.
- Higher potential returns often come with higher risks.
Making the most out of your investment requires balancing risk with smart decision-making and a diversified portfolio. Most investments require patience, so stay disciplined. Instant wealth is oftentimes an unrealistic expectation.
Accessible Investments
Now that we have covered the fundamentals, let’s outline which types of investments are easiest for someone just starting out to consider. Here are some beginner-friendly options to get you started:
Low-Cost, Beginner-Friendly Investments
- Employer 401(k) or 403(b) Plan. If your job offers one, take advantage, especially if there’s a company match. That match equals free money!
- Health Savings Account (HSA). A great option for long-term savings with tax benefits used for qualified medical care.
- Roth IRA or Traditional IRA. A must-have for retirement savings offering tax advantages that help your money grow over time.
- 529 College Savings Plan. Save for education with tax advantages. (Our guide “Generational Foundation: A Financial Guide for Parents” breaks down both IRAs and 529s).
- Certificates of Deposit (CDs). Secure, fixed-rate investments for short-term savings. OneUnited Bank’s UNITY CDs help you maximize your returns with terms from 4 months to 2 years.
Easy Stock Market Investments
- Fractional Shares. Own a piece of big-name stocks without needing hundreds of dollars.
- Index Funds. A passive investment that mirrors the stock market, offering low fees and broad diversification.
- ETFs (Exchange-Traded Funds). Similar to index funds but trade actively like stocks, allowing for more flexibility throughout the day.
Alternative & Passive Income Investments
- Real Estate. Invest in rental properties or explore Multifamily Real Estate Property* ownership with us at OneUnited Bank.
- Cryptocurrency. High risk, high reward—do your research before jumping in and only invest what you can afford to lose.
These investments can be accessed through employer-sponsored plans, brokerage firms, financial institutions, or fintech apps that allow you to start with as little as a few dollars.
Smart Investing Tips
You are now up to speed on several accessible means of investing, but before diving in, keep these key tips in mind.
- Understand What You Invest In. Never put money into something you don’t understand. Research before you commit.
- Diversify Your Portfolio. Spread your investments across different asset types to reduce risk.
- Start with Long-Term Goals. Investing is a marathon, not a sprint. Set long-term financial objectives.
- Keep Emotions in Check. Markets go up and down. Stay patient and avoid impulsive decisions.
- Be Aware of Fees. High management fees can eat into your returns. Opt for low-cost options when possible.
- Stay Consistent. Invest regularly, even if it’s a small amount, to build wealth over time.
Start small, stay informed, and build your financial security one investment at a time!
OneUnited Bank is not a financial advisor. This guide is for informational purposes only and is not investing advice. We recommend consulting a qualified wealth advisor to best suit your investing needs.
*Our Multifamily Real Estate Loan Program helps qualified candidates get the financing necessary to purchase or refinance a commercial real estate property in the Boston, Los Angeles and Miami areas.
