A free guide for U.S. adults
Okay, let’s start.
Which account? What do you buy? And how do you know the money went where you intended?
Read in order or jump to what you need. Investing involves risk of loss.
1. Before you start
When will you need this money?
A trip next summer and retirement in 25 years ask different things of your money. A market drop matters a lot more when the bill is due soon.
Coming up soon
For a goal within five years, risky investments could leave you short when you need the money.
Further away
You have more time to invest. You still need to be able to handle losses along the way.
Before you invest a dollar, know where your emergency money lives. A high-yield savings account at an FDIC-insured bank is one option to compare. Check fees, access to withdrawals and insurance coverage.
Three to six months of essential expenses is a common goal for that cushion. Start with what you can build and adjust for your situation. Make a plan for high-interest debt, too.
Start here: write down one goal, when you’ll need the money, and how much loss you could manage.
What if I’m not ready to invest yet?
Totally fine. Building your cash cushion, tackling expensive debt or finding out what your workplace plan offers all count as progress. You can learn the rest without moving any money today.
There isn’t one starting amount for everyone. Account minimums, investment minimums, fractional-share rules and fees all matter.
2. Accounts
Choose where the money will live.
An account holds your money and investments. Its rules matter just as much as what you put inside it.
Saving for retirement? A common starting route:
- Have a workplace match? Start in your benefits portal and find the contribution needed to get it.
- Already getting the match, or no workplace plan? Explore an IRA if you qualify.
- Saving more for retirement? Compare extra workplace contributions with a taxable account.
For a goal before retirement, access to the money matters too. You don’t have to open every account. Start with the one that fits your goal.
Workplace planThrough your job
A 401(k), for example, lets you save for retirement from your paycheck. Some employers add a match.
Check the match, investment choices and vesting: when employer contributions become yours to keep.
IRAYour retirement account
A traditional or Roth IRA offers tax advantages with eligibility, contribution and withdrawal rules.
Compare the tax treatment and check that you qualify before contributing.
Taxable brokerageGeneral investing
A general investment account without an IRA’s retirement tax treatment. Investment income and realized gains may be taxable.
Compare fees, investment choices, cash arrangements and access to your money.
Roth, traditional and employer match, in plain English
- Roth IRA
- Contributions aren’t deductible. Qualified withdrawals are tax-free. Whether you can contribute directly depends on income and filing status.
- Traditional IRA
- Contributions may be deductible; withdrawals are generally taxable. Deductibility depends on your circumstances.
- Employer match
- Your employer adds money under the plan’s rules. Vesting tells you when employer contributions become yours to keep. Your own contributions are already yours.
For 2026, the combined traditional and Roth IRA contribution limit is $7,500, or $8,600 if you’re 50 or older. It can be lower if your taxable compensation is lower; eligible joint filers can use the spousal-IRA rules. Roth contributions also depend on income and filing status. Withdrawal taxes and early-distribution taxes have their own rules and exceptions.
Where could I open one?
A workplace plan usually starts in your benefits portal. For an IRA or taxable brokerage account, Fidelity, Schwab and Vanguard are examples to research.
Can you buy part of an ETF share? An ETF (exchange-traded fund) is a fund whose shares you buy and sell on a stock exchange. Buying part of a share can help when your starting amount is smaller than a full share’s price.
| Provider | Fractional ETF purchases |
|---|---|
| Fidelity | Eligible U.S. ETFs, from $1. |
| Schwab | Eligible U.S.-listed ETFs, from $1. |
| Vanguard | Fractional purchases of Vanguard ETFs. |
Check the provider’s current account eligibility, fees, minimums, available investments and cash arrangements. These examples have no referral links.
Cash account or margin account?
A cash account requires you to pay in full for the investments you buy. Margin lets you borrow from the broker and can magnify losses. Confirm the account type before signing; some applications make margin the default.
3. Investments
What’s actually inside a fund?
A broad stock fund holds shares in many companies.
You own shares of the fund.
Your money is spread across companies. The fund can still lose value.
Three things to check
Holdings
What does it own? Two different funds can hold some of the same companies.
Costs
The expense ratio is the fund’s annual operating cost as a percentage. At 0.10%, that’s $10 a year on a $10,000 average balance.
Risk
If it falls 20%, $1,000 becomes $800. Bigger losses are possible.
Try it: use one of the examples below to practice finding a fund’s holdings, costs and risks on its official page.
Stocks, bonds, index funds and ETFs: a quick translation
- Stock
- A share of ownership in a company.
- Bond
- A loan to an issuer. Interest and repayment depend on its terms and the issuer’s ability to pay.
- Fund
- A pool of investments. It can hold stocks, bonds or other assets.
- Index fund
- A fund that aims to track an index. An index is a defined group of securities used as a market benchmark.
- ETF
- A fund whose shares trade on an exchange. Mutual fund shares are usually bought or sold at a price calculated once per trading day. Either type can follow an index or use an active strategy.
Three real fund examples to look up
Use these to compare coverage, costs and risks. They aren’t a suggested portfolio; VTI and VT overlap in U.S. stocks.
U.S. stocks · VTI
Vanguard Morningstar Total Stock Market ETF. Broad U.S. company exposure, from large to small. U.S. stock-market declines can cause large losses.
Global stocks · VT
Vanguard Total World Stock ETF. Companies in developed and emerging markets, including the U.S. It carries stock-market, international and currency risks.
U.S. bonds · BND
Vanguard Total Bond Market ETF. Broad exposure to taxable, investment-grade, U.S. dollar-denominated bonds. Bond prices can fall, including when interest rates rise; credit and inflation risks also matter.
Expense ratios and holdings can change. Read the current documents before investing.
How does the fund fee come out?
Fund operating expenses come out of the fund’s assets and reduce returns. The expense ratio expresses annual operating expenses as a percentage of average assets.
On a constant $10,000 average balance, 0.03% is about $3 a year; 0.06% is about $6. The $10 example above uses 0.10%. Brokerage charges and other costs may also apply.
What if I want one fund with a mix?
Some target date funds hold a mix of stock and bond funds and change that mix as a retirement year approaches. Their costs, risks and changing allocations differ. They can still lose money, including around retirement.
4. Start & check
Make one move. Check what happened.
Opening an account, adding money and buying an investment are separate steps. Here’s how that works in an IRA or taxable brokerage account.
- Open and fund the account.Go to the provider’s own site or app. Have your Social Security or tax ID number, government ID and bank account details ready. Review the fees and account agreement. For an IRA, check eligibility, limits and the contribution year.
- Review the investment and order.Check the investment’s name and ticker (its trading symbol), then the amount, risks, costs and order type. Wait for the provider to confirm the funds are available to invest.
- Confirm the result.Look at order status, transaction history, holdings and remaining cash. Submitting an order doesn’t mean it has filled.
Your deposit may be moved automatically into a bank deposit or money market fund. That’s called a cash sweep. It hasn’t necessarily bought the investment you chose. Check what you own, especially if you’ve set up automatic investing.
Starting with a workplace plan?
In your benefits portal, review or set your payroll contribution amount or percentage and choose from the plan’s investment options. Some plans enroll you and use a default investment. Once contributions start, check your pay stub and plan account to confirm the amount and what you own.
See how $100 moves through an account
One fictional brokerage account, at three different moments. The $100 is just an example, not a minimum.
The account is open. Nothing has been added yet.
No fees or price changes in this example. Real minimums and cash arrangements vary.
Market order or limit order?
A market order asks to buy at the next available market price, without setting a price ceiling. A buy limit order sets the most you’ll pay per share. If that price isn’t available, the order might not fill.
Read the provider’s order terms, especially for fractional shares and orders outside regular market hours.
Give yourself a simple routine.
- Check what you own, including cash and recent transactions.
- Choose an amount you can repeat. If you automate, check both the transfer and the investment purchase.
- Revisit whether the investments still fit your goal, timing and ability to take a loss.
See what regular contributions could add up to.
Try an amount and a time frame, then change the return. These are made-up scenarios. Real returns vary, and losses are possible.
What if the market falls?
It can, including just after you buy. A falling price alone doesn’t tell you whether to buy or sell. Revisit why you invested, when you need the money, and how much loss you can handle.
When the market has three moods before lunch, I write about it in Markets & Mimosas. What happened, what the numbers say, and what deserves a closer look.
Is my investment insured against losses?
FDIC insurance covers eligible bank deposits within its rules and limits. A money market fund isn’t a bank deposit and has no FDIC insurance, even if it’s used for a cash sweep. SIPC helps restore missing customer assets when a member brokerage fails, within its own rules and limits. Neither protects an investment from falling in market value.
Choose your next step.
You don’t have to do everything today. Pick one. That’s today’s job.
Your checklist stays on this page and clears when you reload. It doesn’t connect to an investment account.