The Lazy Girl’s Guide To Investing in the Stock Market


You’re a modern woman who’s all about making her own money and paving her own way. So, of course, you’re fully aware of the importance of investing. And yet, for some reason, that investment portfolio never comes to fruition. Why? Because investing in the stock market can be intimidating. Potentially putting your hard-earned money into the wrong thing can feel like too big a risk.

Contrary to popular opinion, though, you do not need to be a mathematical genius, have tens of thousands of dollars, or be the female Wolf of Wall Street to start investing in the stock market. When done correctly, you can get a huge payoff in the long run and grow your wealth without having to lift a finger. This is the ultimate lazy girl’s guide to investing in the stock market. Read on to learn exactly how to get started, the best ways to play it safe, and what to look out for.


1. Decide how much you can afford to invest

The last thing you want to do is overleverage yourself. So, take the time to figure out how much money you can afford to invest. Calculate the total amount of your living expenses and any debt you’re paying off. Once you have that number, subtract it from your income to see how much leftover money you have. From there, set aside 50% of it for “fun” expenses (like going out to eat or shopping), 25% for savings, and 25% for investments. Following this or a similar method will help ensure you’re keeping your finances on track. Of course, you can tweak it if need be.

Additionally, take the time to check in on your savings. The general rule of thumb is to have at least 3-6 months’ worth of expenses saved up. But with rising costs and inflation, you might want to have a little more to fall back on. That said, if you do have the extra money, consider putting some of it into your investment account. For example: If you have $20k saved up and need $12k for six months’ worth of living expenses, you could take $2k and deposit it into investments.


Key things to remember when deciding how much you can afford to invest:

  • Don’t put yourself into debt over investments. Make sure you’re still paying for living expenses and contributing to your emergency fund and outstanding debt.
  • You don’t need a lot of money to start investing.
  • The amount you decide on will be dependent on your unique financial situation.
  • Investing a little is better than not investing anything at all.


2. Figure out what you want to invest for

The first step is to figure out if you want to grow your wealth with a personal investment portfolio or if you want to invest for retirement. With a personal portfolio, you can take money that’s sitting in savings and contribute as much as you’d like to your account. You have free reign to cash in on and make withdrawals from it whenever. However, these withdrawals and any investment earnings will be taxed, and contributions can’t be written off. That said, investments held for over a year are considered long-term capital gains and therefore taxed significantly less.

On the other hand, there’s a limit to how much you can contribute to a retirement fund—up to $6k per year, or $7k if you’re 50 and older—and it can’t be touched until you’re 59 ½. Early withdrawals are penalized and taxed. However, unlike personal portfolios, retirement funds can be a bit more tax-friendly. Traditional IRAs and Roth IRAs are the two most popular options, and each comes with its own tax perks. With a traditional IRA, earnings aren’t taxed, and contributions can be written off, but withdrawals are subject to income tax. However, earnings and withdrawals are tax-free with a Roth IRA, but contributions can’t be written off.

It’s important to note that unless you’re day-trading, these investments are meant to be held long-term. So, in theory, you can hold onto a personal investment portfolio for as long as you’d like—until retirement, even. Take the time to really think about what best suits your needs and lifestyle. If you’re looking to grow your wealth and have immediate access to it, a personal investment portfolio might be the right move for you. A retirement fund might work better if you want to ensure you’re financially secure for the future, are self-employed or a business owner and want extra tax write-offs, or would prefer to make smaller contributions over a longer period of time. Whatever you decide, just remember that there’s no right or wrong option. It’s all about doing what’s best for you.


Source: Social Squares


3. Find a broker that works for you

Now that you’ve figured out your investing goals, it’s time to find a broker that can make it happen. There are a lot of investment platforms out there, but there are some tried-and-true choices that are perfect for beginners.

Vanguard is ideal for those who are creating a retirement fund because it’s safe and secure with inexpensive, long-term investment options—perfect for retirement. Plus, no minimum balance is needed in order to open an account. For a personal portfolio, Robinhood probably has the most user-friendly interface out there and can be accessed from your computer or through the Robinhood app. Since their account minimum is $0, you can get started right away. They now offer 1.5% interest on uninvested cash sitting in your account—which means that you can grow your money before you start making investments. Public is another option that, like Robinhood, offers a streamlined interface, which makes it perfect for beginners. There’s no account minimum or trading fees, either, and they also offer 2% interest on cash sitting in your account.


4. Make your first investment

One of the safest ways to start is by investing in an exchange-traded fund (ETF, for short), which is essentially a basket of various stocks. This is an affordable way to get more skin in the game and diversify your portfolio. For starters, investing in an ETF that tracks the S&P 500—a stock market index that measures the overall performance of the 500 largest publicly traded companies in the U.S—is your best bet. Although lone stocks can go up and down, historically, the stock market as a whole has gone up. An S&P 500 ETF will let you get a fraction of a little bit of everything while decreasing volatility and risk of exposure.

SPY, VOO, and IVV are the three S&P 500 ETFs. They’re all essentially the same, but since all funds come with expense fees, the biggest difference between them is the cost. SPY is the most popular choice, but I personally prefer VOO because it’s run by Vanguard and is slightly cheaper and less volatile.


5. Grow your portfolio

A little goes a long way with long-term investments. Although your initial investment will grow on its own over time, it’s crucial that you continue to grow your portfolio. Along with initially investing in ETFs, set up a system that automatically deposits a percentage (read: 25%) of your leftover spending money into your portfolio. From there, you can choose to add it to your current investments or branch out and diversify a bit more. Whatever you decide, following these tips will help you grow your wealth to its maximum potential.



Consider investing in a value stock

If you have a little bit of extra money, consider adding a value stock to your portfolio. These are stocks that are less exciting than “trendy” stocks like Gamestop and Tesla but are currently considered the backbone of society. They’re healthy, secure, conservative, and consistent. When the market goes down, they tend to hold on nicely. Johnson & Johnson, CVS, and Walmart are some examples of value stocks. They will not increase your account dramatically overnight. However, over time, they will grow your portfolio.


Use the DRIP model

ETFs, along with most value stocks, pay dividends. Dividends are sums of money paid regularly (typically quarterly) by a company to its shareholders out of the company’s own profits. With the DRIP model (dividend reinvestment plan), dividends are reinvested directly back into your portfolio and used to purchase more shares of said dividend.

For example: If you receive a dividend of $20 from your ETF, you can choose to have that automatically reinvested into the same ETF to grow your shares. Over time, this will compound your investment and accumulate more shares, which will increase your dividend payment. It’s an upcycle of growth that’s totally free. No matter how small your dividend is (one of mine is just $7 at the moment), set up a DRIP plan with your broker. It’s a guaranteed way to grow your portfolio at no cost to you, so you can’t go wrong.


Avoid over-the-counter (OTC) stocks

Over-the-counter (OTC) stocks are stocks that are unlisted on national securities exchanges, like the New York Stock Exchange or Chicago Stock Exchange. This means that they’re unregulated and unreliable. To put it simply: They’re a gambler’s stock. Penny stocks are probably the most notorious OTC stocks, and if you saw The Wolf of Wall Street, then you already know how dangerous they can be. Do yourself a favor and avoid OTC stocks at all costs. They’re not good for long-term investments.


Remember: Time in the market beats timing the market

It’s not uncommon for people to talk about “buying at the bottom,” but long term, the market will be higher. Decide what you want to buy and get started. Time in the market always beats timing the market. If the market does go down, you can always buy more at the bottom.

With that being said, it’s important to remember that stocks will move up and down, but whatever you do, don’t panic. What comes down must go back up, and vice versa. You won’t lose money unless you sell, and you can’t lose if you leave it alone. The best thing to do is to follow the steps above, make similar investments over time, and forget about them completely. When you come back to them in the future, you’ll be pleasantly surprised at your little nest egg.