How to Start Investing and Build Real Wealth Over Time

Most people think investing is for rich folks with fancy desks and Bloomberg terminals. That’s not true. You don’t need a six-figure salary or a finance degree to start. You just need to begin. And the best time to start was yesterday. The second best time is now.

Why Waiting Costs You More Than You Think

Let’s say you’re 25 and you put $200 a month into a low-cost index fund that averages 7% annual returns. By age 65, you’ll have about $520,000. Now, if you wait until you’re 35 to start-same amount, same returns-you’ll end up with just $240,000. That’s half the money, for the same effort. The difference isn’t how much you earn. It’s how early you start.

Compound growth doesn’t care about your job title. It cares about time. The longer your money sits, the more it grows on its own. That’s the secret most people never learn until it’s too late.

Start With What You Already Have

You don’t need $10,000 to begin. You don’t even need $1,000. You need $50. Or $25. Or whatever you can spare after rent, groceries, and your coffee habit.

Most brokerages now let you invest with no minimums. Robinhood, Fidelity, Charles Schwab, and Vanguard all let you buy fractional shares. That means you can own a piece of Amazon or Apple for less than the price of a sandwich. Start small. Stay consistent. That’s the real formula.

Set up an automatic transfer from your checking account to your investment account. Even $25 a week. Do it the day after payday. Make it as routine as brushing your teeth. You won’t notice the money leaving your account. But over time, it will grow.

What to Invest In (And What to Avoid)

There are thousands of investment options. Most of them are distractions.

Stick to three things when you’re starting:

• Low-cost index funds - These track the whole market. The S&P 500, for example, includes 500 of the biggest U.S. companies. Historically, it’s returned about 7-10% a year over the long term. You don’t pick winners. You own them all. That’s the point.
• Target-date funds - These are like set-it-and-forget-it funds. You pick the year you plan to retire (say, 2050), and the fund automatically shifts from stocks to bonds as you get closer. Great if you don’t want to think about rebalancing.
• Real estate investment trusts (REITs) - These let you invest in buildings, malls, and apartments without buying property. They pay regular dividends and add diversification.

Avoid these when you’re starting:

• Individual stocks unless you’re willing to spend hours researching them
• Cryptocurrency - it’s speculation, not investing
• Get-rich-quick schemes, penny stocks, or anything that sounds like a “guaranteed return”

One study from Dalbar showed that the average investor underperforms the market because they buy high and sell low-usually because they panic during downturns. Index funds help you avoid that trap.

Open an Account. Any Account.

Choosing the right brokerage feels overwhelming. But here’s the truth: the difference between platforms is minor when you’re starting. Focus on these three things:

1. No fees - No account fees, no trade commissions, no hidden charges.
2. Easy to use - You should be able to buy your first fund in under five minutes.
3. Access to low-cost index funds - Look for Vanguard, Fidelity, or Schwab funds with expense ratios under 0.10%.

Here’s a quick comparison:

Don’t overthink it. Pick one. Open the account. Deposit $50. Buy one index fund. Done.

How to Think About Risk

Risk isn’t about losing money in a single month. It’s about not having enough when you need it.

If you’re under 35, you can afford to put 80-90% of your money in stocks. Why? Because you have time to ride out crashes. The market drops 10-20% every few years. It always recovers. In 2020, the S&P 500 dropped 34% in a month. By the end of the year, it was up 16%. In 2008, it fell 38%. By 2013, it had doubled.

But if you’re 55 and plan to retire in 5 years, you need to shift more into bonds. That’s not because stocks are risky. It’s because you can’t afford to wait 10 years for a recovery.

Rule of thumb: Subtract your age from 110. That’s the percentage you should keep in stocks. So if you’re 30, keep 80% in stocks. If you’re 50, keep 60%. Adjust as you get older.

What Success Looks Like

Success isn’t becoming a millionaire overnight. It’s having enough to retire without worrying. It’s not needing to work past 60. It’s having the freedom to take a year off, start a side project, or care for a family member without financial stress.

Real investors don’t chase hot trends. They show up. Every month. Even when the news is scary. Even when the market is down. They keep adding. They keep waiting.

One of my neighbors, a schoolteacher in Evanston, started investing $100 a month at 28. She didn’t tell anyone. She didn’t post about it. She just kept doing it. At 52, she retired early. Not because she got lucky. Because she stayed consistent.

Common Mistakes (And How to Avoid Them)

Here’s what trips up most new investors:

• Waiting for the "perfect" time - There’s no perfect time. The market is always expensive or uncertain. Start anyway.
• Checking your balance every day - Daily swings mean nothing. Look at your portfolio once a quarter. Focus on adding, not reacting.
• Trying to time the market - No one consistently predicts crashes or rallies. Even pros fail at this.
• Following TikTok gurus - If someone’s selling you a "secret" stock tip, they’re not trying to make you rich. They’re trying to sell you a course.

Build your own system. Automate it. Ignore the noise.

What Comes Next

Once you’ve got your first $5,000 invested, here’s what to do:

1. Max out your 401(k) if your employer matches - that’s free money.
2. Open a Roth IRA if you’re under $150,000 in income - contributions grow tax-free.
3. Keep increasing your monthly amount by 1-2% every year. Raise your salary? Raise your investment too.
4. Learn about asset allocation. Read a book like The Simple Path to Wealth by JL Collins. No fluff. Just facts.

You don’t need to become an expert. You just need to be consistent.

Final Thought: You Don’t Need to Be Perfect

You don’t need to know everything. You don’t need to time the market. You don’t need to pick the next big stock.

You just need to begin. And then keep going.

Start small. Stay steady. Ignore the noise. Let time do the work.

That’s how real wealth is built.