How to Invest Your First $1,000.

A lot of my friends and people that I encounter who have yet to start investing seem to tell me the same thing. A similar worry. I hear it all the time, whether someone is in school or just started his or her career: I don’t even know where to put my money. “I just don’t know what to do.” It’s why only slightly more-than-half of Americans own stocks.

Well, the first step is to open a brokerage account. Some of the largest platforms that people tend to use are Fidelity, Charles Schwab, and TD Ameritrade. The process is very simple. You should have the following information handy as well:

• Social security number (or taxpayer identification number)

• Address

• Telephone number

• E-Mail address

• Date of birth

• Driver's license, passport information, or information from other government-issued identification

• Employment status and occupation

• Whether you are employed by a brokerage firm

• Annual income

Once you get that out of the way, what’s worth investing in? Isn’t that the real question (Hamlet, be damned!). So we’re here to make this easy for you: a good idea is to put your first $1,000 (or even up to your first $10,000) of disposable income into an index fund that tracks the 500 largest American companies by market capitalization. It’s low-cost, low-work. A couple of good index funds that do this are the SPYDER ETF (Ticket symbol: SPY) and Vanguard’s TOTAL STOCK MARKET INDEX ETF (Ticker Symbol: VTI).

The reason is simple: the 500 largest American companies are relatively safe. Think of the biggest names and brands you know (Apple, Facebook, Disney—chance are, they’ll still be around in the next 10 years.) Also, in the last 30 Years, the SPDR SP 500 (SPY) ETF obtained a 9.79% compound annual return, with a 14.87% standard deviation. In 2021, the ETF granted a 1.54% dividend yield. That’s really good.