6 Things You Need to Know Before You Start Investing

4/9/20253 min read

Thinking about investing but not sure where to start? Or maybe you've tried but got overwhelmed by all the jargon? You’re not alone. This post will walk you through everything you need to know before making your first investment — in a simple, practical, and no-BS way.

This is the ultimate beginner’s guide to investing wisely, with confidence and a long-term mindset.

1. No More Excuses: Investing Has Never Been Easier

Let’s be real — there are no more excuses in 2025. Investing today is as simple as downloading an app on your phone. Open an account with a brokerage, link it to your bank, and you’re ready to start investing.

It used to be a headache: yelling at stock floors, tons of paperwork, and limited access. Now? It’s just a few taps on your screen. All you need is a little courage and commitment.

2. You Don’t Need to Know Everything to Start

You don’t have to be a financial expert to start investing. If you're just getting started, one of the easiest and most effective tools is the ETF (Exchange-Traded Fund).

ETFs track indexes like the S&P 500 or Nasdaq. They’re great because:

  • They’re diversified by nature;

  • They have low fees;

  • You can invest in multiple industries and countries.

John Bogle, the father of ETFs, famously showed that the S&P 500 outperformed 90% of active mutual funds over 15 years.

With ETFs, you’re already beating most people — without picking individual stocks or timing the market. And the best part? You can start with just a few dollars.

3. Principles Matter More Than Technical Knowledge

Investing isn’t just about technical analysis. The truth is, your mindset matters more than any formula.

Take Peter Lynch’s Magellan Fund, for example. He delivered an incredible 29.2% average annual return between 1977 and 1990. Yet most of his investors lost money.

Why? Because they panicked during downturns and bought during highs — exactly the opposite of what they should’ve done.

Think of investing like shopping: you want to buy when prices are low — not when they’re high.

Building wealth is about patience, discipline, and sticking to a long-term plan — especially during downturns.

4. Watch Out for Fees and Taxes

Here’s a big one most beginners overlook: costs eat into your returns. Be mindful of:

  • Brokerage fees;

  • Expense ratios and performance fees in funds;

  • Opportunity cost of leaving money idle;

  • Currency exchange spreads (if investing internationally);

  • Capital gains taxes and short-term trading taxes.

The more you trade, the more fees you rack up. Over time, these can seriously hurt your gains.

Do your homework. A low-cost strategy often beats a fancy, high-cost one in the long run.

5. You Can Be in the Top 10% of Investors

Did you know that simply investing in ETFs already puts you ahead of 90% of investors?

With discipline, study, and emotional control, you can go even further and join the top 10%. A solid diversification strategy, like the ARCA method (used for long-term protection and growth), can help you build a strong and balanced portfolio — even if you're not a pro.

You don’t need to beat Wall Street. Just avoid common mistakes and stay consistent.

6. Beware of Cognitive Biases

This one’s huge. The greatest threat to your portfolio? Your own brain.

We’re all wired with over 130 cognitive biases. Here are just a few that can hurt your investments:

  • Anchoring bias: Holding onto the past price of a stock and expecting it to “come back”;

  • Sunk cost fallacy: Holding onto a bad investment because “I’ve come this far”;

  • Framing effect: Getting sold on positive spin, while ignoring risk.

The only way to protect yourself is to stay radically open-minded and always keep learning.

Surround yourself with smart sources. Read, listen, watch — and never stop improving.

Final Thoughts: Investing Is More About Behavior Than Brilliance

You don’t need to be a financial genius to build wealth. You just need the right tools, consistent habits, and the ability to control your emotions.

Start small with ETFs, keep your costs low, and follow a long-term strategy. That’s the real secret.

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