Advice for people new to investing - What to buy, how to start, etc...
Hey guys, I've noticed a lot of people tend to have the same questions getting started, so I wanted to help point you in the right direction. For context I come here from WSB and have been trading for about 10 years.
"I have X dollars, how can I make a lot of money off this?" (usually $2K-$10K)
-This post I've seen the most and the honest answer is... unless you have a ton of starting capital, don't expect to solve your financial problems through investing. The stock market has done around 10% per year historically. If you have <$20,000 in capital , it's probably not worth your time and stress worrying about the market. If you have any debt such as credit cards, use the capital to pay off those ASAP. Getting 20-30% returns risk free is nearly impossible in the market. Btw, I'm not saying you shouldn't invest with a small amount of money. You totally can, but it should be for LEARNING, don't expect to get rich off such a small amount of capital.
"What should I invest in first?"
-That depends entirely on your goals, knowledge, and level of risk tolerance. Usually lower risk assets provide lower returns and vice-versa. Below is a table of investment types from least to most risky:
| Investment Type | How to buy | Expected Return | Note |
|---|---|---|---|
| Dollars/Currency | Checking Account | 0% | Negative return with inflation |
| High Yield Savings | Savings Account | 2-3% | Depends on interest rate, some banks have promotions |
| Money Market Accounts | SPAXX (or other brokerage MM) | 3-4% | Capital can be in brokerage account |
| Government Bonds - Short Term | SGOV | 3-5% | Lower risk than long term bonds |
| Corporate Bonds | USHY | 6-7% | AKA Junk Bonds -Higher Risk than Government Bonds |
| S&P 500 (Top 500 Largest US Stocks) | SPY or VOO | ~10% Historically | Returns vary year to year |
| NASDAQ 100 (Top 100 Tech Stocks) | QQQ | over +10% Historically | Higher risk, some believe there's an AI bubble |
| Paying off Debt | Credit Cards, Mortage, Student Loans | 5-30% APR | Depends on the interest rate (DO THIS ASAP FOR +10%) |
| Mag 7 Stocks (High performance tech giants) | Nvidia, Amazon, Google, Apple, Tesla, Microsoft, Meta | 20-40% Historically | Risks include AI bubble and diminished growth (S-curve adoption) |
| Individual Stock Picks | Brokerage Account | Depends on your skill level and knowledge | Most people lose money trading individual stocks |
| Precious Metals and Crypto | Gold, Silver, Bitcoin, Ethereum, Solana, etc | Varies | These don't cash flow, but are considered a hedge against traditional assets. |
| Options Trading | Brokerage Account (level 2+) | Negative expected returns. | Options are not investing, they're essentially gambling. |
Here's what I do personally:
I keep my cash in the brokerage's money market (SPAXX) and I'll purchase individual stocks when I find something at a great price. If the market is moving sideways or prices are too high, I like high yield bonds and sometimes selling options for premium. I enjoy trading stocks, have a high risk tolerance, and have been doing it for years. If you don't want the stress or risk losing your money, ETFs and bonds may be best for you.
If you want to buy stocks and forget them, the S&P500 is a great option. You get diversified exposure to the Top 500 companies and a 10% historically return.
A huge regret I have personally is not starting sooner. It's better to learn this stuff while you're young and benefit from compounding, rather than feel like you have to catch up later in life. In one day you could open a brokerage account and buy your first share of SPY (or even just get 3-4% passively).
Lastly for beginners, please don't expect to get rich from investing. Investing is great for increasing wealth, but you need starting capital first, and you might start taking a bunch of unnecessary risk if you get into investing with the wrong idea (WSB has a lot of examples of this haha).
If you have any questions about this stuff let me know, I'd be happy to answer!
Posted Apr 8, 2026, 1:09 PM UTC