The Beginner’s Handbook to picking the right investment for your bank account and your lifestyle

Your first investment is right around the corner

There is a common misassumption that you must have excess money before you start investing. But then you spend all of this time waiting for this magic day of overflow that you end up never actually investing. There’s just never enough money to do so.

The first step is to change how you think about investing. Don’t think of it as an expense or something that only wealthy people do. Think of it a different kind of bank account that you can’t readily spend from. Think of it as your net worth or value. I tend to look at my checking account as the beginning, middle and end of my body of wealth (or lack thereof), making it difficult for my brain to collectively identify other value containers as a piece of the puzzle. 

The truth is that that elusive excess money you are looking for can come more quickly as a result of investing. It is one of those crawl-before-walk scenarios. You invest to produce excess, you don’t produce excess to invest.

I formerly was resigned to the Maybe Someday Investment Plan, clinging to my paycheck, distributing meager funds to my “Just in case” emergency account, meanwhile spending money on entertainment, clothing, and food with reckless abandon.

I’m not one for budgeting—still working on it mom!—but one day I happened upon an embarrassing bank statement that read like one long, extravagant restaurant menu punctuated by shoes and clothes. And after adding it all up, it occurred to me that I was literally eating and wearing my potential investment money.


So where do we start?

When trying to figure out where to start investing, there is a lot of information out there. But like any financial decision, one size does not fit all. It’s not just about numbers—many factors of your lifestyle require consideration as well.

Let’s first define what an investment actually is. There are a lot of false investments out there but the bottom line is that an investment is something that can gain value over time. Your initial capital can exponentially increase, becoming worth more than what you paid for it. We’ll define an investment as anything that has the potential to make your money multiply. 

It is also important that we don’t confuse liabilities with investments. Even commonly assumed assets can be liabilities. A car or a house is not necessarily an asset until it is no longer costing you money. It is also not an asset if you, in turn, lose money on it. This is where bad investments can arise. 

6 lifestyle factors to take into account

We want to make sure that our investments match our lifestyle. You don’t want to end up investing in something that you can’t manage. A smart investment can quickly become a dumb one if you’re not savvy. 

Here are a few questions to ask before embarking on your investment journey:

  1. How much risk can you take on reasonably (and emotionally)?

    You’ve probably heard “risk big, win big” plenty of times but you don’t want to sacrifice your wellbeing in pursuit of that. It can be very stressful waiting for your investment to return a profit, especially if the markets are volatile. If you invest all of your savings in the stock markets only to check the DOW every 5 minutes, you will take a toll on your sanity. 

  2. What are your standard expenses?

    From those expenses, can any of those be redirected or eradicated completely? I.E, are they all necessary or urgent? Even with debt, there are some circumstances that may actually benefit from you deferring so that you can allocate your money to increase first and then you can resume your payments. It may seem counterintuitive, but in many cases, it is better to pay yourself first so that you are better equipped to pay more to your debts later. Don’t sacrifice your credit for this deferral but explore your options. 

  3. Are you looking for a quicker yield (generally higher risk) or are you trying for a slow and steady investment?

    There are plenty of options for flipping an investment quickly, but they can either have a lower yield or a higher risk than something that simply accrues value over time. Identify your desires for investing and then allocate your money accordingly.

  4. How much time can you invest in your investment?

    Some investments run on autopilot. You put your money in and don’t think about it another second until you’re ready to take it out. Then there are those that require maintenance and more a more watchful eye. Know how much time you’re willing to take on because high maintenances option can get out of control if you’re not prepared to dedicate time and effort towards it. 

  5. What are your investment goals?

    It’s good to approach investing with a specific goal in mind. You can then figure out what kind of investment would help you achieve this goal. Recurring returns may be more useful for someone looking for financial security versus lump sum returns that may apply to someone more interested in a cushy retirement. Try to identify an ideal dollar amount and a deadline by which to reach that amount. 

  6. What is your income level currently? What percentage of that can you invest?

    Your income is the initial foundation upon which you are building your investment portfolio so it is paramount to your beginning stages. This will help you identify how much you are comfortable with starting with right now. Rarely can you invest more than what you currently have. See what your income covers according to your usual budget and then budget your investment in. Your income assessment may vary if it is a one-time investment versus one that you may feed on a periodic basis. 

Picking the right investment

Types of Investments

This is just a crash course on a few types of investments that vary from traditional to modern, maximum effort to minimum, expensive to affordable, long to short term.

Keep in mind that the most important piece of your investment puzzle is education. Do not invest in something you do not understand. I have added some useful links so that if you see something you like, you can gather more information to get further educated and get started. 

Time and money are the two primary start-up factors in your investment to consider. We will use the following key to identify the time and financial responsibility necessary for succeeding in this investment type:

Time required

$ Money required

Modern Investments

We’ll start with a modern approach to investments. Technology has evolved our day-to-day life and the finance sector reflects this change. There are some interesting new ways to dip your toes into the investing world.

It took me about 3 minutes to make my first investment in cryptocurrency. I just downloaded this app and I was all set. From the app, you can invest, sell, trade and check the daily valuation. You can also trade cryptocurrency, which would take more time and effort.
$ You can start with as little or as much as you’d like. Since I wasn’t sure what all the hype was about, I just bought $20 worth of Ethereum and $20 worth of Bitcoin. That way I could develop my understanding with a hands-on approach. As I gain more confidence, I plan to feed it a bit more on a monthly basis.

It is quite the trending topic at the moment, confusing to most of us who prefer the concept of tangible money as a symbol of value. To barely scratch the surface of the what’s and why’s of cryptocurrency, (a long conversation for another article, friends) its value is determined similarly to the speculative nature of stocks. —With one distinguishing factor. Cryptocurrency can be transactional, meaning you can buy things with your investment. Few companies have gotten onboard with accepting bitcoin, (Overstock, Microsoft and Expedia are several of the early adopters) but this should expand over time. 

This speculative quality makes it quite volatile but it is still in the midst of its infancy, meaning the growth potential is strong. Right now, the most popular form of crypto is fluctuating around the $10,000 mark.

Yes, this means that in order to buy 1 whole bitcoin, you’d have to put down $10,000. But you can still buy fragments of a bitcoin, meaning that you can invest anything from $5-$5000. The trick to the trade is nothing new. You buy low and sell high.

Resources: Weigh the Pros & Cons The Future of Cryptocurrency | Terms to know | If you want to get into trading | Everything you need to know

The sharing economy

The sharing economy is a great way to capitalize on the investments that many of us have out of necessity. Below are 3 great ways to invest in the sharing economy.

1. Space sharing –


Sharing a home or workspace with someone can require a lot of maintenance and managing. It is not a set it and forget it kind of investment. I ran an Air BnB out of an apartment and I spent a lot of time marketing my space, monitoring pricing fluctuation based on competition (neighbors) and events. This is in addition to facilitating my guests by communicating with them, cleaning the home, filling the fridge with food and drinks, and coordinating key pick up and drop off.
$$ Space sharing requires ownership of a space, which, in most, cases may require thousands of dollars in start-up capital. You will also likely provide a clean, furnished space, which comes with a separate pricetag. Furthermore, your space may carry recurring utilities, rent, HOA fees, and/or a mortgage. However, with the operative word being “sharing,” you may already have this space out of general bear necessity. 


Air BnB, Oasis or Home away 

This one is a great option for anyone who travels frequently or is able to find a cheap place to stay while you accommodate your guests. (Staying in a hotel only increases your overhead!) I’m fortunate enough that my parents don’t live far from me so I can just go home.

Being able to rent out your home that you already pay for is a great way to not only eclipse your rental expenses but you may actually glean a profit. If you are unable to leave your own home for extended, often random, periods of time, you may either market a spare room or try investing in a separate property.

Just be mindful of both your fixed and variable expenses. In addition to your standard utilities, you may also need to take on cleaning expenses. You don’t want to take on another rent or mortgage and not break even. And always, always, know the terms of your lease. Some places do not allow subletting in any form, and you don’t want to end up with an eviction because you failed to read the fine print. 

Some tips for a successful vacation rental are location location location! The better the location the better the pricing of your home. Be mindful of events in your area. You can increase pricing if there’s a big game or conference in town. Provide your guests with a unique experience. Leave a brochure of your favorite local recommendations. Fill the fridge with continental breakfast items. Find out their favorite kind of wine and have it ready for them when they check in. Your reviews are everything so make sure that you have a clean reputation.


Another great option for absorbing the costs of rent is sharing your space for people to rent out for shorter period times. People use peerspace to find unique and cost-effective locations for their meetings, events, photoshoots, etc. It’s a great way to make your office work for you!


This is a unique approach to space sharing. Some cities have nightmarish parking. If you are exempt from this issue, you may try selling your parking space to somebody for short or extended spans of time. 

2. Transportation-
Similar to the above space sharing, transportation is not a set it and forget it kind of investment. Many of the below options require your full participation. For example, if you sign up to be a Lyft driver, well you return on investment is directly related to your time spent driving. 
$$ Again, similar to space sharing, obtaining transportation solutions may require thousands of dollars in start-up capital. You will also have recurring expenses like gas and routine maintenance. However, you may already be burdened with these expenses out of bear necessity so why not make a bit of cash to offset the inevitable. 

Lyft, Uber, Turo, Postmates, or Roadie

These are great sharing economy options to help with that car note. Turn your car into a taxi (Uber or Lyft) or a delivery service (UberEats, Postmates, Grubhub, Roadie). Turo turns your car into a rental, allowing other people to use your car for a daily fee.

3. Clothing
 Apps have made it extremely easy to resell your possessions. It’s as easy as posting a listing and selling to the buyer. 
The startup costs are minimal being that you are reselling items that you already own. 

Poshmark, Mercari, ThredUp and Style Lend

Poshmark, Mercari, ThredUp let you sell clothes that you don’t wear anymore. Style Lend lets you rent out designer clothing items. 


The JOBS act of 2012 made crowdsourcing funding legal and, as a result, some really interesting investing opportunities arisen. See the three below suggestions for ways to get in on crowdfunded investments. 

1. Peer to peer lending 
 Once you’ve chosen an investment option, connect your bank account and you’re all set.
You can become a lender on Prosper with as little as $25.

Prosper or Lending Club are platforms for peer-funded borrowing where you can sign up to lend money to individuals under the agreement that the loan is repaid with interest. You can get cash each month as borrowers make payments on their loans.

2. Real estate 
 Though crowdfunded real estate investments don’t require you to own, sell or maintain a property, extensive research on wise investments is still necessary.
$$$ Investing in real estate is still expensive, crowdfunded or otherwise, but platforms like Fundrise have entry-level options starting as low as $500.

Real estate investing is easier than ever with crowdfunded options. An individual investor can pool their resources with other investors, making the entry cost as well as the risk lower. Crowdfunded real estate can be a viable access point for less-experienced or less-equipped investors. 

Resources: Why crowdfund real estate | Different types of crowdfunded real estate  | Where to start

3. Startups
Investing in a startup definitely requires some research. A fledgling company comes with as much risk as it does potential. You will have to monitor the company’s progress. You may at first only be rewarded with intangible equity or have to wait indefinitely for any return on investment.
$$ The platforms listed below allow as little as $100 investments so

 Seed Invest, WeFunder, MicroVentures are great starting points for novice investors. These are nothing like the crowdfunded donation platforms, Kickstarter or Indiegogo.

Investing in startups is one of the more uncertain investments listed here. Young companies have the odds stacked against them. I’d recommend that, if you are interested in investing in startups, do it more for propelling social good or supporting things you are passionate about. You can’t go into it expecting to cash in and cash out. Many early investors are promised little more than intangible equity that is essentially worth nothing until the company is worth something.

Domain Names
∞ Buying valuable domains require research and then finding buyers so this kind of investment can have a bit of legwork involved.
The startup costs can vary quite a bit. Most domains are under $10 but many valuable ones can retail as for tens of thousands of dollars. Having insight into what makes a valuable domain is key in making sure you have a lucrative domain portfolio. Straightforward domains are hard to come by decades into the Internet Age, so the best way to find a valuable domain is to pay attention to rising trends.

Domains are the real estate of the internet. The value of a domain is benchmarked on scarcity. And a couple of decades into the internet invariable leaves us with but a few untapped domains. This leaves domain owners in a potentially lucrative position. Valuable domain names are increasingly diminishing so if you own a domain that someone else wants, they may want to pay quite a lot for it. 

Resources: General How-To | Tips

Passive investment portfolios
 I use the Acorns app and it took me no time to set up my account and begin investing. All you have to do is download the app, make an account and connect your bank account. Set up the deposit increments that you are comfortable with and the app will do the rest for you.
Acorns invests incrementally based on your preferences. You can make a singular lump sum investment and let it slowly accrue value or you can let it slowly amass change based on your purchases. 

Acorns is a clever app that rounds up your transactions to the nearest dollar and invests the change into the stock market. This is the kind of autopilot stock investment that is perfect for beginners.

Traditional Investments

Below you will find the tried and true investment mediums, their reliability and potential ROI proven to stand the test of time. Many of these options are a bit less volatile and time-consuming, perfect for someone who is looking for no-frills, low-risk investments. 

Real Estate
 Real estate can be very time-consuming, especially depending on what kind of real estate investment you are making. It requires significant research to come to an informed decision. And after the investment has been made, there is a lot of consistent maintenance required in order to sustain the investment. 
$$$ Investing in real estate is very expensive although there are some lucky instances when you may stumble upon a deal. Careful though, because in real estate if it seems too good to be true, it just might be too good to be true.

There are many ways to invest in real estate. It can have quite the financial barrier to entry but can certainly have quite the return on investment. There are many factors to take into account when finding a property to invest in. Location is an obvious starting point but there are underlying factors that you will consider too. Your purpose is another starting point. Are you going to rent it out, buy low (like due to foreclosure) renovate it to flip for a profit? Rental income can provide a recurring income but you essentially become a landlord, which can be extremely time-consuming. These are but a few options that can vary incredibly on how much time and money will be needed after the initial buy. 

Resources: Real Estate Investing for Beginners  | Getting Started

  Education should never end. Especially now when it is literally at our fingertips at all times. It does require diligence and can take some time but there is no better investment than yourself. 
It has never been so affordable to learn something. With Youtube, CreativeLive, Udemy, and the millions of blogs, online courses, and ebooks scattered throughout the World Wide Web, you can learn anything for a fraction of the traditional university tuition.

While this may initially sound abstract, education has one of the highest and most overlapping returns that you can muster. And these days, it doesn’t have to have to be a traditional university supplying that knowledge. Online courses, seminars and classes are as rich with relationships as they are with knowledge. And you can manage your own time, many times getting the knowledge you need in less time than a college curriculum.

401Ks and IRAs 
  Retirement funds are as set-it-and-forget-it as it gets. A 401k takes a portion of your paycheck and stows it away for you until you have come of age. You literally just opt-in when filling out your employee benefits forms. But you may don’t get a return on this kind of investment for decades.
Retirement funds are usually based on income constraints. They are an investment option that, by definition, has little to no barrier to entry.

These are retirement funds that you generally do not touch until you have reached retirement age. Though very similar, 401k’s primarily differ from IRA’s (Individual Retirement Accounts) in that they are employer-sponsored retirement plans. 

Resources: If you are interested in a 401k, try talking to your employer/HR department. If you are looking for an IRA, you may try a bank or brokerage firm.

  Time required for stock investment is dependent upon whether you are buying to hold or buying to trade. If you are trading, you are taking an active role in the exchange. This requires more time and effort than someone who is simply picking a few stocks to hold onto and potentially sell off after they’ve appreciated. 
Startup funds for stock investment vary based on the company you are investing in and the state of the market. The trick is to buy low and sell high.

Many of us have at least some familiarity with the stock market, whether from grade school textbooks or mid-century themed movies. Stocks are probably what first comes to mind when one thinks about investing, but they have a certain caché. The stock market is notoriously volatile and largely unpredictable. Even trained professionals rely a lot on luck. But when you strike gold, you can really strike gold. 

  Bonds don’t require a lot of time or effort, but the returns are slow and steady.
$$ Bonds pricing can vary by type, but the investment formula applies here as well. The higher the investment that higher the potential yield on that investment. 

Bonds are long-term investments that offer fixed rate returns. They are great for someone would like a steady return without the risk of the stock market. The returns can be much lower but they don’t come with the stress of an unpredictable investment.

Resources: Getting started  | How to invest in bonds

Index Funds and ETFs 
  Your time investment will depend on your purpose for investing. If you are investing for a long-term return, you can set your investment and check it intermittently. If you are trading, you will be vigilantly watching the market.
$$  Minimum investments for Index Funds and ETFs are usually around $2500, but Charles Schwab has an option for $1. 

Index funds and ETFs (Exchange Traded Funds) are passive strategies to invest in the stock market. Rather than investing in one company or a series of companies— which can require a lot of education, strategy and luck— you are investing in a broader index. They trade like stocks, but rather than concerning yourself with the ups and downs of a sole company, you are investing in the welfare of an overall stock market. 

Resources: Which is best for you

Mutual Fund 
  Mutual funds don’t require the investor to be hands-on as there is a fund manager who does the legwork for them.
$$ Mutual funds generally require an initial investment of over $3000. There are several companies that do offer some more inexpensive options between $100-1000.

Mutual funds are a stressless investment, as your money is pooled with other individual investors and/or companies and then invested in shares by fund managers. A fund manager’s entire job is dedicated to the savvy investment of the collective funds. Knowing there is a trained eye on your investment can provide you peace of mind that your money is well taken care of. 

  A certificate of deposit doesn’t require much time to initiate, but the return on investment is determined by the maturity date. The longer the more interest your deposit will accrue.
$ A CD investment can be as low as you’d like, dependent on the specific bank’s minimum regulations. There are some banks that require $0 to open a CD account, although there would be no way for $0 to accrue interest. 

A certificate of deposit is a deposit you make to the bank with the agreement that the bank can actually use those funds until the deposit’s maturity date. The maturity date can be as short as 3 months and as long as 5 years. When you withdraw the deposit, you will have the amount of your initial deposit plus accrued interest.



  There are several ways to invest in gold. You can take a tangible approach (collect jewelry or coins,) to a more indirect option (stocks and ETFs of companies that invest in gold.) 
$$ Startup capital will vary based on the type of investment you choose. 

Gold may seem like an antiquated concept of currency. It bears little use to many of us outside of jewelry. But gold’s value is not so much found in its immediate transactional function, but rather the stability of its intrinsic value. People appreciate this as an investment in relation to paper money’s susceptibility to inflation. 


Will you be investing this year? How do you pick the right investments for you?

Also published on Medium.


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