Investing can be very confusing for beginners. In this video we'll share three strategies for beginners to get started investing in the stock market.

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The investing world and all of its complexities can get very confusing very quickly, especially for beginners. This was our situation a couple of years ago when we were beginners. We didn’t know much about how the stock market worked, we didn’t know where to start, we didn’t have much extra money, but we did know that growing wealth through investing was one of the ways a lot of people have been able to become financially independent. And since we also wanted to become financially independent, we decided to take a small amount of money and begin investing in the stock market ourselves.

One of the questions we had at the beginning of our investing journey was, how could we invest in stocks or index funds that cost more than the money we had? For example, if all we had was $100 to invest, how could we invest in a company like Apple (AAPL), which today costs around $150? The answer we found out, was fractional shares.

Fractional shares allow you to invest in fractions of a share of a stock or index fund or ETF (exchange traded fund). There are different methods of doing this based on which brokerage you're using (Robinhood, Charles Schwab, Fidelity, etc.), but the basic idea is the same.

The FIRST investing method is to invest solely in index funds. For us, this is a great way to get started as beginners. Index funds are like a basket of stocks, so when you invest in an index fund or ETF, you're indirectly investing in all of the stocks the index fund contains. VOO (Vanguard S&P 500 ETF) for example, is an index fund ETF that tracks the S&P 500, and has about 500 companies within it. When you invest in VOO, you're investing in all of those companies. Regardless of whether you buy many shares or a fractional share. Same with VTI (Vanguard Total Stock Market Index ETF) or any other ETF or index fund.

Index fund investing and ETF investing is extremely common and pretty much offers a guarantee that you'll match the return of the index the fund tracks. We get more into the pros and cons in the video.

The SECOND investing method is to invest in individual companies. Examples of these would be companies like Microsoft (MSFT), Apple (AAPL), Google (GOOGL), Amazon (AMZN), etc. Investing in individual companies offers a much more focused and directed approach that can easily produce bigger returns, but it also introduces more risk and takes more time for research.

The THIRD investing method is to do both. Investing in both index funds or ETFs, and also individual companies. This offers the best of both worlds in our opinion. The diversification of index funds, and also the focus of investing in individual companies you may have high hopes for.


0:00 Intro
0:58 Fractional Shares
2:04 Index Fund Investing
6:26 Investing in Stocks and Companies
8:35 How to do Both


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