How to Start Investing in 2022

The best time to start investing was 10 years ago. The second best time to start investing is today.

How to Start Investing in 2022
Photo by Andrea De Santis

Disclaimer: None of the following is financial advice.

The best time to start investing was 10 years ago. The second best time to start investing is today.

The following guide has 3 steps:

  • Step 1 covers basic finance knowledge.
  • Step 2 covers which bank accounts and finance apps to set up.
  • Step 3 covers strategy and tactics.

Step 1: Basic knowledge

What is the stock market?

The stock market is where portions (shares) of a public company are bought and sold.

It is also called: the equity market, the securities market, or "the market."

What is a share?

A share represents ownership of a portion of a company. All of the shares of a company are of equal value and can be bought and sold.

A share is also known as a stock.

What is a market capitalization?

The market capitalization (market cap) is the total value of all of the shares of a company.

As an equation, it's: (shares) x (price of a share)

What is a stock ticker symbol?

A stock ticker is a unique 1-5 letter identification symbol. No two stocks have the same ticker symbol.

For example, Tesla motors is represented as ticker symbol: TSLA. Salesforce is represented as ticker symbol: CRM.

What makes stock prices go up and down?

Many factors influence the price of a stock. The most important influence is probably the business fundamentals – how much money a company makes and will make in the future.

Other factors include product execution, politics, and macroeconomics.

What is a stock broker?

A brokerage account is where you buy and sell stocks.

It is like a regular bank account except it holds stocks, stock options, and cash.

What is the crypto market?

The crypto market is like the stock market except people buy and sell cryptocurrencies instead of stocks.

Does crypto have shares?

You can think of them as shares but they are not typically called shares. Cryptocurrencies are digital currencies, not shares.

For example, you'd say, "I have 2 bitcoins," or, "I have about $100,000 in bitcoin." Not, "I have 2 bitcoin shares."

Does crypto have a market cap?

Yes, like a company, each cryptocurrency has its own market cap.

It is the (total amount of coins) x (price of a coin).

What is a crypto ticker symbol?

Like in stocks, a crypto ticker symbol is a 1-5 letter identification symbol. No two cryptocurrencies have the same ticker symbol.

What makes the cryptocurrency price go up and down?

Many factors influence the price of a cryptocurrency. One of the major factors is the type of coin: store-of-value, smart contract, utility, meme coin, etc.

I explain cryptocurrency prices in more detail in this article.

Other factors include product execution, politics, and macroeconomics.

What is a crypto exchange?

A crypto exchange is like a stock broker but for cryptocurrencies.

It is like a bank account but it holds cryptocurrencies and cash.


Step 2: Set up your bank accounts and finance apps

Stock Essentials

  1. Charles Schwab is the best bank account. I use them for checking, brokerage, and Roth IRA. They have no fees. The only problem is they don't have stock splits (fractional shares), so I use Cash app and Fidelity for stock splits.
  2. Cash app. I like using Cash app to buy stock splits. It's convenient and they have a great app but it's not as reputable as Schwab or Fidelity.
  3. Fidelity. I like using Fidelity because they have stock splits and they have a great track record like Charles Schwab. But the app interface is outdated.

Crypto Essentials

  1. Coinbase Pro. Coinbase is the most reputable crypto exchange. Make sure you use Coinbase Pro. "Coinbase" without the "Pro" has VERY high fees. Coinbase Pro has low fees.
  2. FTX.US. FTX is the second most reputable crypto exchange. Their app interface is MUCH better than Coinbase Pro.

Stock Advanced

  1. Trading View. TradingView is a stock and crypto charting software for desktop and smartphone. It helps you analyze stock prices. They also have the best iPhone widget for stocks and crypto. But it's a paid app – the lowest price subscription is $155/year. I'd only get this if you're really into finance.

Crypto Advanced

The following crypto wallets are listed in order of risk. Starting with the riskiest and ending with the least risky. Crypto wallets are the safest place to hold your cryptocurrencies.

Note: APY is the amount of money you make per year from holding money in your bank, exchange, or crypto wallet. If you have $100 and you're getting 6% APY, you'll have $106 at the end of the year.
  1. Exodus or Phantom wallet. Exodus wallet (for iPhone) and Phantom wallet (for Google Chrome) are the best wallets to hold and stake the Solana cryptocurrency. Staking Solana can earn you ~6% APY.
  2. A hardware wallet. A hardware wallet (cold wallet) holds your crypto offline so nobody else can get access to it. Why is this necessary? Because a crypto exchange could get hacked or they could freeze your account. Hot wallets, like Exodus and Phantom, are connected to the internet and could be hacked. A hardware wallet is nearly impossible to hack – it is the safest place to hold your crypto. I recommend the Trezor Model T.

Step 3: How to start investing

The 2 steps to personal finance:

  1. Spend less money than you make.
  2. Invest for the long-term (5–10 years).

How to invest for the long-term:

  1. Thoroughly research and pick 2–5 stocks or cryptocurrencies that you think will go up in value. I recommend researching Tesla (TSLA), Google (GOOG), Bitcoin (BTC), Ethereum (ETH), and Solana (SOL).
  2. Dollar cost average (DCA) into your top 2–5 stocks and cryptos over a 6 month time frame. Dollar-cost averaging is when you divide up the total amount you want to invest and invest equal amounts every month for a certain amount of time.
  3. DCA until your portfolio is 20% in cash and 80% in investments.
  4. Wait for a market dip or crash.
  5. Buy the dip with your cash.
  6. Every time you get more cash to invest, wait for a dip and buy more investments.
  7. Don't sell.