Investing 101: Tips for beginners from a finance major

February 22, 2019

Investing can sound pretty scary, especially if you don’t know anything about stocks and markets or you don’t have a lot of spare cash to invest. But if you’ve thought about investing and aren’t quite sure where to start, we have a few tips for you from our Q&A with Tammy Tran, president of the Financial Management Association at ASU.

Tran is a junior majoring in finance and has industry experience from her time with Vanguard, an investment management company, where she spent time on trading floors, worked with financial analysts and wealth and portfolio managers.

What is investing and why should I start … or at least start thinking about it?

Simply put, investing is having your money make you more money! By leveraging your dollars (and being patient!) you can have money work for you. Anyone can start investing, and everyone should start investing, like … yesterday.

You should start thinking about it now because of a concept called the power of compounding, which basically means that the earlier you invest, the richer you can get due to the snowball effect of earning interest on interest. When you invest could be the difference of whether you come out a millionaire or not!

If I don’t have thousands of dollars to invest, is it still worth it?

Because of the power of compounding, time is on your side! As young college students, saving and investing small chunks now could be equivalent to someone in their late 30s just starting to invest big chunks. Even if you don’t have thousands of dollars, it is incredibly important to start as early as possible — I can’t stress that enough.

ASU junior Tammy Tran


OK, I’m convinced — so what are some ways to invest?

For your typical non-finance individual, you don’t have to understand everyday stock market movement or fancy techniques to become an investor and be smart with your money.

The easiest way to start investing with virtually no risk is to open up a high-yield (high-interest) savings account such as Vio Bank or Ally Bank. These online banks are among the highest interest yielding, and you have the luxury of easily accessing your money.

Another way to invest is to open up a retirement savings account. Even if you’re as young as 18, the best time to invest for retirement is now. You can open up an Individual Retirement Account (IRA) and contribute annually.

If you’d like to dabble in more technical investing, such as trading stocks like Apple or Tesla, commission-free trading apps such as Robinhood are great for small trades (under $10,000.) These apps are great for learning and understanding the stock market and the financial world around us. Whatever method you choose to start investing, make sure to do your research first.

Who should I talk to if I’m not sure I’m doing the right thing?

Investing can seem overwhelming and too scary to even begin, but you can start by simply educating yourself. There are thousands of YouTube videos that break down the individual components of investing.

After getting acquainted through research and learning, you can get help or additional information from a brokerage or investment management company. If you don’t have one yet, you can call one anyway. Companies like Charles Schwab and Vanguard are great at providing support for new investors and would love to help guide you to your financial goals. Keep in mind, they are not allowed to give technical investing advice.

You can also talk to a trusted, financially literate friend or family member who you feel comfortable with. There is a wealth of knowledge around you, and starting that conversation can be worth thousands of dollars.

What should I be careful about or keep in mind when investing? What are some risks?

Investing is inherently risky. There are no guarantees, and you could potentially lose everything if you’re not careful. Be mindful of fees, company credibility and your own risk tolerance. In order to be successful, you have to understand how much risk you can actually handle. Overshooting it could cause you to “buy high and sell low.”

Additionally, remember that most investors don’t get rich overnight. It takes years of saving, patience and growing your knowledge to become a millionaire from investing. But if done right, the average person can retire with seven figures.

What’s your personal investment strategy?

As a personal investor, my preferred style is passive investing with the occasional fun in arbitraging stocks. But for the most part, I’m a buy-and-hold type of gal.