Investing 101: How to Start Investing | theSkimm

New Site: Start Investing

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Start Investing

Learning about investing can feel like a lot. But actually doing it...could make you a lot. So you can retire, buy a home, island-hop in Greece, or just stop stressing every time you check your bank account. Because when your money is multiplying, your options are, too.

Step 1: Get the Basics

If you’ve been sleeping on investing, time to wake up. Start by understanding what investing really is. Then take the quiz to see where you stand.


Step #2: Talk the Talk

From bulls to bears, investing lingo is a whole other animal. We Skimm'd the words of Wall Street here.


FSL Stock Market Compounding Returns V2
Compounding Returns

When your investments start earning money, then that new, bigger amount earns even more money. Like magic, but real. The sooner you invest, the more time compounding has to make you rich.

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FSL Stock Market Bear Market V2
Bear Market

Opposite of a bull. The market’s going down, and investors are nervous. Fun memory trick: Bears attack their prey by swiping their claws down.

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FSL Stock Market Blue Chip V2
Blue Chip

In poker, blue chips are worth the most. In investing, blue chips are stable companies (Coca-Cola, Disney) with a rep for making people money. Yes, please.

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FSL Bonds
Bonds

A loan investors give to a gov or company. In return, you get an IOU to get paid back the face value of that bond. Plus interest.

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FSL Stock Market Bull Market V2
Bull Market

The kind everyone likes. Bulls attack prey by thrusting their horns up...like prices in a bull market. No bullsh*t.

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FSL Stock Market Dow Jones V2
Dow Jones

30 respected US stocks investors watch to gauge overall market performance. A group of Wall Street Journal editors decide which companies are in or out. If you hear ‘the market’s up,’ the Dow is probably having a nice day.

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FSL Stock Market Index V2
Index

A group of investments used to ballpark how the broader market is doing. Basically, the yard sticks of the investing world. Names you should know: the Dow, S&P 500, and NASDAQ.

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FSL Stock Market Initial Public Offering V
Initial Public Offering (IPO)

 A private company’s big debut on Wall Street. Once a private biz goes public, anyone can buy its stock.

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FSL Stock Market NASDAQ V2
NASDAQ

The world’s largest totally digital stock exchange. Fancy. Also a nickname for the Nasdaq Composite — Mark Zuckerberg’s fav index (probably), which tracks over 3,000 (mostly) tech stocks.

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FSL Stock Market NYSE V2
NYSE

Stock market HQ. The New York Stock Exchange is the biggest marketplace to buy and sell stocks and bonds. Trades go down electronically and via stockbrokers who work at 11 Wall St.

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FSL Stock Market Portfolio V2
Portfolio

All the investments you own (stocks, bonds, real estate, cash, etc.). Make yours like you would a donut: fat and well-rounded.

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FSL Stock Market S&P 500 V2
S&P 500

Tracks the value of 500 big US company stocks. Like the Dow Jones index, it’s a good indicator of what kind of day your friends who work in finance had.

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FSL Stocks
Stocks

A tiny slice of ownership in a company. When the company is doing well, you get a piece of the pie. And vice versa.

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FSL Stock Market Volatility V2
Volatility

The market has a hard time controlling its emotions. Volatility measures the frequency and severity of the market’s short-term mood (er, price) swings.

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FSL Yield
Yield

Ugly word, beautiful meaning. It’s the money you earn from an investment over time, written with a % sign. Includes interest and dividends. Very rewarding.

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FSL 401(k)
401(k)

A retirement account you get from work. You can invest money Uncle Sam hasn’t gotten a piece of yet and pay taxes on it later. Learn more from that new hire welcome packet you forgot to read. 

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FSL 403(b)
403(b)

Your version of a 401(k) if you work for a public school, charity, or nonprofit org. Invest for retirement now, and pay taxes later. 

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FSL Employer Match
Employer Match

Extra money from your employer you didn’t have to work for. Some companies will match a certain amount of your retirement contributions...just to be nice. And get a tax break. 

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FSL IRA
IRA

Stands for Individual Retirement Account, and just about anyone who earns money throughout the year can have one. For a traditional IRA, you invest already-taxed dollars, but might get a tax deduction come April depending on your income. 

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FSL SEP IRA
SEP IRA

A retirement account just for small biz owners and people who make their own rules at work. Boss retirement moves. 

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FSL Social Security
Social Security

Money the gov pays you just for being old. It’s a federal program that gives most retirees a steady check once they hit a certain age.

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FSL Rollover
Rollover

When you move investments from one retirement account to another. Like from a 401(k) to an IRA. Usually because you’ve changed jobs and want to remember where all your money lives. 

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FSL Roth IRA
Roth IRA

Another type of IRA where you can invest post-tax dollars. This time, there’s income maximums. The more you make, the less you can contribute. The money you invest today grows and can be withdrawn in retirement totally tax-free. 

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FSL Vesting
Vesting

A timeline for how long until ALL the funds in your retirement account — specifically any employer-match money — belong to you. No take-backs. 

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