Investing for Beginners: What It Is, How to Start, and Why I Choose ETFs

You don’t need a finance degree, a ton of money, or perfect timing to start investing—you just need a little confidence and consistency. This guide will help you get there.

Written by Kelli, founder of The Pink Ledger with over a decade of experience in the finance industry.

9/2/20255 min read

Why So Many People Hesitate to Invest

Investing. Even the word can feel intimidating. For years, I thought it was something reserved for “rich people,” Wall Street traders in suits, or people who somehow just knew what to do with the stock market.

And I wasn’t alone. A 2023 Gallup survey found that only 61% of Americans invest in the stock market — and women are still less likely to invest than men. Many of us grow up hearing that investing is risky, confusing, or something you’ll “get to later.”

But here’s what I’ve learned: investing isn’t gambling, and it isn’t about luck. It’s simply the practice of putting your money to work so it grows over time.

When you save, your money sits still. When you invest, your money starts earning money — through stocks, bonds, ETFs, or other assets.

The goal isn’t to get rich overnight. It’s to build steady, long-term wealth that supports your goals, your freedom, and your future. And the best part? You don’t need thousands of dollars to start — you just need to start.

This post may contain affiliate links, which means I may earn a small commission at no extra cost to you. I only share products I truly love and recommend!

Why Investing Matters (More Than Just Saving)

1. Inflation Eats Away at Savings

You’ve probably noticed your grocery bill is higher than it was a few years ago. That’s inflation at work. Over time, prices rise, and your money buys less.

If your money is sitting in a basic savings account earning 0.01%–0.50% interest while inflation is running at 3%–5%, you’re actually losing money in real terms every year.

Investing gives your money the chance to grow faster than inflation, so you’re not falling behind.

2. Compounding Builds Wealth Over Time

The U.S. stock market has historically averaged 7%–10% annual returns after inflation. That may not sound like much — until you see compounding in action.

If you invested $100 today and it grew at 8% a year, in 30 years it could become over $1,000.
If you consistently invested $50/month for 30 years, you’d have nearly $75,000 (not including extra growth from reinvested dividends).

That’s the magic of compounding — your money earns money, and then that money earns money, too.

3. Investing Is for Everyone (Not Just the Rich)

This is one of the biggest myths: that you need a lot of money to invest. You don’t.

Today, thanks to beginner-friendly apps and platforms, you can start with as little as $1–$5. What matters most is consistency, not the size of your first deposit.

Example:

Person A invests $50/month for 30 years → nearly $60,000.
Person B waits 10 years, then invests $500/month for 20 years → also ends up around the same.
But Person B had to work 10 times harder to catch up.

Time in the market beats timing the market, every single time.

How to Start Investing (Even If You’re Totally New)

Feeling nervous? That’s normal. But getting started doesn’t have to be complicated. Here’s a four-step roadmap:

Step 1: Choose Where You’ll Invest

You don’t need a Wall Street broker — just a phone or laptop.

Fidelity → Great for long-term investing and retirement accounts (IRAs).
Robinhood → Simple app interface, good for absolute beginners.
Acorns → Perfect if you want a “set it and forget it” option. It rounds up your spare change and invests it into ETFs based on your goals.

Tip: If choosing feels overwhelming, try a robo-advisor (like Acorns or Fidelity’s goal-based accounts). They automatically diversify your money for you.

Step 2: Decide What to Invest In

For beginners, ETFs (Exchange-Traded Funds) or index funds are the simplest choice.

Think of ETFs as baskets of stocks or bonds. Instead of betting on one company, you own a small piece of many — which spreads out your risk.

Step 3: Start Small (But Start)

Don’t wait until you’ve saved thousands. Start with what you can — $20, $50, even $5.

When I started, I set up just $25 a month. Honestly? It felt almost silly at first. But a year later, I realized I had quietly built over $300 without even thinking about it.

Not sure how much you can set aside? Use the Pink Ledger Budget Template to see exactly what’s realistic within your monthly budget.

Step 4: Automate It

The easiest way to stick with investing is to automate it. Set up monthly transfers (just like a bill) so investing becomes a habit, not a chore.

Why I Choose ETFs Over Individual Stocks

When most people think of investing, they picture buying single stocks like Apple or Tesla. But picking individual companies is risky and stressful — especially for beginners.

That’s why I prefer ETFs.

What Are ETFs?
ETFs are bundles of investments you buy as one unit. Instead of putting all your eggs in one basket, you’re spreading them across dozens (or even hundreds) of companies.

Why I Love ETFs:
✅ Diversification → lowers your risk.
✅ Low fees → most cost under 0.1%.
✅ Beginner-friendly → no need to research 50 companies.
✅ Peace of mind → you own a piece of the market, not just one stock.

My Go-To ETFs:

VOO → Tracks the S&P 500 (500 of the largest U.S. companies).
VTI → Covers the entire U.S. stock market, from giants to small startups.

Both are affordable, diverse, and have long track records of steady growth.

Common Investing Myths (And the Truth)

Myth 1: “I need a lot of money to invest.”
❌ False. You can start with $5. Small steps add up.

Myth 2: “Investing is gambling.”
❌ Wrong. Gambling is chance. Investing is strategy + patience.

Myth 3: “I have to time the market perfectly.”
❌ No one can. Even experts fail. What matters is time in the market.

Myth 4: “I’ll lose everything if the market crashes.”
❌ Markets dip, but historically they always recover. Downturns are often the best buying opportunities.

A Beginner’s Action Plan

If you’re ready to start, here’s a simple plan you can put into action this week:

Pick your platform (Fidelity, Robinhood, Acorns).
Choose one ETF (VOO or VTI are great starting points).
Decide your monthly budget (even $20 counts).
Automate your transfers.
Stay consistent — and let compounding do the heavy lifting.

FAQs: Beginner Investing

Q: How much should a beginner invest each month?
As much as you can consistently. Even $20–$50 monthly builds up thanks to compounding.

Q: Is now a bad time to start investing?
No. There is no “perfect” time. Starting early and staying consistent beats waiting.

Q: Are ETFs safe?
ETFs still carry risk, but they’re generally less risky than buying single stocks because they’re diversified.

Q: Should I pay off debt before investing?
Focus on high-interest debt (like credit cards) first. But even while paying down debt, you can invest small amounts to build the habit.

Investing Doesn’t Have to Be Complicated

When I first started, I thought I needed thousands of dollars, perfect timing, and expert knowledge. I was wrong.

The truth is simple:

You don’t need to be rich.
You don’t need to beat the market.
You just need to start.

Even if you invest $20 this month into a broad ETF like VOO or VTI, you’ll already be further ahead than you were yesterday. And that tiny step, repeated over time, can completely change your financial future.

Want help finding room in your budget to start investing? Download the free Pink Ledger Budget Template and see how easily investing can fit into your monthly plan.