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How To Start Investing

Investing, Stocks, Bonds, Securities, S&P, DOW….all words you may have heard before.  The complexity of these financial terms shouldn’t scare you away from a rather simple process of investing for your future.  For years, or a least the several decades I’ve been alive, people have always been intimidated by numbers.  Kids, even worse adults, want nothing to do with math or money issues.  I’m here to tell you, MONEY ISN’T COMPLICATED AND NEITHER IS INVESTING IT.  If you stick with Jiu-Jitsu Finance, I’ll breakdown these topics in a way that won’t have you feeling like you’re about to fail a 6th Grade math test.  I’ve been there (many times) and I don’t want you to feel that way.  I can tell you, by my own account, I am not a mathematical genius but I do know Finance.  And don’t worry, you won’t need one of those fancy scientific calculators we all dreaded in school.

1) Educate Yourself

Like I say in my “About Me” Page, the book “Rich Dad, Poor Dad” gave a really good basic understanding of the theory of money.  If you are a beginner, this book will set you on the right course. I do feel that the author is a bit biased toward real estate investment vs other types.  That may or may not be for you but we can get into that another day.  Read this and you’ll be exposed to the psychology of those who are financially free.

Though this book is 10 years old, it’s principles have been priceless to me.  Jim Cramer’s “Real Money” gave me what I call a “feel” for the markets.  Cramer has a nightly show on CNBC and somewhat of a questionable past but that’s not for me to judge.  Either way, this content is perfect for a beginner.  Read this and you’ll better understand the stock market’s intimate relationship with the overall movement of the US Economy.

Another book that has been quite influential of late is Tony Robbins’s “Money: Master the Game.”  Tony interviewed 50 of the brightest financial experts in the world.  The insight he provides is rare and extremely valuable.  One of my biggest takeaways was his explanation of the difference between a Registered Investment Adviser and regular Financial Adviser (For more info on this difference, ask me inside our closed facebook group)   If I had to recommend one book to read on investing, it would be this one.  Read this and you’ll be armed with the BEST strategies to create your long-term financial plan.

2) Where to Trade

If you take the traditional route, you can open an account with E-Trade, Ameritrade, or Scottrade. There are many others, but those 3 come to mind right away.  I’ve personally only ever used Scottrade.  It has $7/commissions per trade, which is low for industry standards.  Even with those low commissions, they can add up quickly so beware!  The process for opening one of these accounts is much like opening a bank account with slight differences.

Lately, apps like Robinhood and Acorns have gained popularity for their simplicity and ease of use.  Robinhood doesn’t charge you a fee per trade and Acorns will round up your credit card transactions to the nearest dollar, while investing the difference.  These are a product of the FinTech movement happening as we speak.  It’s making everything easier and cheaper.  In the coming months, I’ll be posting products reviews for both of these apps.

3) Don’t Pigeon Hole Yourself

If you are paying attention to the news, you’ll hear a lot about the “markets”, which of course we know is referring to the DOW, S&P 500, and NASDAQ.  But don’t think this is your only avenue for “investing.”  You also have real estate or small business.  Historically, these take a lot more money to start but things have changed a bit with all of this technology we have available now.  Nowadays, you can put up a fully functioning eCommerce business within a day’s work or you can search sites like Flippa for established/startup opportunities.

Whatever path you choose, I’ll challenge you to be patient and keep yourself from getting on that emotional roller coaster.  Especially with the stock market, it will be easy to panic.  Knowing why you’re doing what you’re doing will be the most important aspect of your trade.

4) Know Your Numbers

Whether its the stock market, real estate, or investing in a small business, you’ll need to understand financial statements in order to assess its value.  I recommend reading “Financial Intelligence for Entrepreneurs.” It will be difficult to know what a good investment is without understanding what’s behind the numbers.  The ability to analyze financials is what separates investing from gambling.  A common theme in the books referenced above will be to financially educate yourself.  This book will be a good start.


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Eric Estevez
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