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Getting started

Your first steps

Before putting money into investments, it is wise to have a stable financial base. Investing works best when you are not forced to sell at the wrong time to cover an emergency.

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Two foundations matter most. The first is an emergency fund, a cash reserve covering several months of essential expenses, kept somewhere safe and easy to access, so that an unexpected bill or a loss of income does not force you to sell investments at a bad moment. The second is dealing with expensive debt: high-interest borrowing, such as on many credit cards, often costs more each year than investments can reasonably be expected to earn, so clearing it is frequently the better use of spare money.

Only money you will not need in the near future, and that is not tied up servicing costly debt, is generally well suited to investing. Getting these basics in place first gives you the stability to stay invested through market ups and downs, which is exactly what long-term investing rewards. It is a less exciting step than picking investments, but it is what makes the rest possible.

This content is general information, not investment advice.