Investing: Building for the Future
I’ve spoken to A LOT of first-time investors in my career and the questions are almost always the same:
“How do I start?”
“Do I need a lot of money?”
“What should I buy?”
“What if I mess it up?”
The good news is Investing isn’t about being perfect, it’s about being consistent.
You don’t need to chase hot stocks, become a day trader, have a big salary, or know everything before you begin. You just need to understand the basics.
Before You Invest
I’ve said it before and I’ll say it again: Before you start investing, you need a financial foundation.
Make sure you have:
An emergency fund (even $500–$1,000 is a great start)
A basic budget
A plan for high-interest debt
Investing without a foundation is like building on sand; the moment life happens, everything starts to fall apart.
The Two Forces that drive Wealth-Building
Simply put, Investing is putting your money to work so it grows over time. Not overnight! Just slow, steady growth fueled by time and consistency.
Savings is more appropriate for short-term goals
Investing is best suited for medium & long-term goals
Time
You’ve probably heard the phrase: “It’s not about timing the market, it’s about time IN the market.”
What that really means:
The earlier you start investing, the more time it has to grow.
But starting late is better than not starting at all. Time will work with whatever you give it.
Growth
So how does your money actually grow?
It’s called “Compounding.” Your money starts to earn more money, that new money then earns more money, which earns more money and they cycle continues.
You want your invested money to have time to grow and time to recover from market ups and downs. So what starts as a small monthly investment grows into a large portfolio, not because you got lucky but rather you allowed time and compounding to do the heavy lifting.
Investment Accounts (And What They’re For)
Before you choose what to invest in, you need to choose where to invest.
Different Investment accounts serve different purposes, some have tax savings, some offer employer matches, or allow more flexibility.
401(k) or 403(b)
These are Employer-sponsored retirement plans. You contribute straight from your paycheck, easily and automatically.
Why it’s great:
Many employers offer matching programs
This mean they match your contributions!
Higher contribution limits allow you to invest more
Contributing to Traditional 401(k)s reduces your taxable income
This means you save money on your taxes!
Best for:
Anyone with employer benefits, especially if there’s a match.
Traditional IRA
These are Individual Retirement Account you open on your own.
Why it’s great:
Contributions may be tax-deductible
This just means it can reduce your tax bill
Investments grow tax-deferred
You don’t pay taxes on this money now, you pay it in the future when you withdraw the money
There’s more Flexibility
You can choose where and how this account is managed.
Best for:
People who want tax savings now or don’t have a 401(k) at work.
Roth IRA
Everyone loves Roth’s!
Why it’s great:
You pay taxes now, but withdrawals in retirement are tax-free
Tax-free growth = huge long-term benefit
Flexible rules for withdrawing contributions
Things to know:
Roth IRA’s do have income limits so not everyone can contribute to a Roth.
Best for:
Younger investors, lower-to-moderate income earners, and anyone who wants tax-free retirement income later.
Regular Brokerage Account
A standard investment account with zero tax advantages.
Why it’s great:
No contribution limits
Withdraw anytime
Full flexibility
Things to know:
You pay taxes on gains, interest, and dividends
Great for medium/long-term goals before retirement
Best for:
Investing for medium or long-term goals like buying a house, business funding, or wealth-building beyond retirement accounts.
HSAs (Bonus Account!)
Health Savings Accounts are often overlooked but incredibly powerful. An HSA can function as a pseudo-retirement account if not needed for immediate medical expenses.
The only triple tax-advantaged account:
Tax-free contributions
Tax-free growth
Tax-free withdrawals (for medical expenses)
Best for:
People with high-deductible health plans.
Which Account Should You Start With?
A simple order of operations works for most people:
Start with your 401(k) employer match (free money!)
Open a Roth IRA and automate monthly contributions
Increase 401(k) contributions if you want more tax benefits
Use a regular brokerage account for everything else
Mindset tip: You don’t need to open every account right now. Start with the one that fits your life today and slowly build over time.
Types of Investments
A lot of people open an investment account, deposit money and think they’re done. Depositing money isn’t the same as investing it.
The most common mistake new investor’s make is not realizing Investing requires two steps:
Where? Having the right investment account
How? Having the right investments
Money sitting in your account is just cash until you put it to work.
Stocks
You own a piece of a company (shares).
It can have great long-term growth potential but fluctuates day to day.
Bonds
You loan your money to a company or government in exchange for interest.
It can be a steadier and lower risk investment compared to stocks but provides lower expected returns.
Mutual Funds
Professionally managed “bundle” of stocks and/or bonds.
Actively managed
Higher fees
May have investment minimums
Index Funds / ETFs
A basket of investments that track a market index (like the S&P 500).
Low cost
Highly Diversified
Great for beginners
Easy to buy and sell
Money Market Funds / Money Market Accounts
Very low-risk options that earn some interest.
Great for money you need in the short-term, like emergency fund or vacation fund.
Certificates of Deposit (CDs)
You lock your money for a set period (6 months, 1 year, 5 years, etc.) in exchange for a guaranteed interest rate.
Safe
Predictable
No market volatility
Best for short to medium-term goals.
Alternative Investments (high level only)
Real estate, private credit, private equity, and more.
Higher risk and not necessary for beginners.
Diversification
Now that you know the different investment types, the next question becomes:
“How do I choose the “right” one?”
The good news is you don’t have to pick just one investment, they’re meant to work together.
Diversification simply means spreading your money across different investments so one bad day in the market doesn’t ruin everything.
Stocks = Growth
Bonds = Stability
Cash Options = Security
CDs or money markets
Factors that Impact Risk
Most new investors see risk as dangerous but risk just means how your investments move up and down over time.
There’s 3 main factors that impact the level of risk in your portfolio: Diversification, Asset Allocation & Risk Tolerance.
Diversification reduces risk
“Don’t put all your eggs in one basket.”
When one area dips, the others help balance it out
It doesn’t eliminate risk, but it smooths out the ride.
Asset Allocation sets your risk
“How much of each investment?”
You determine the right portfolio mix for you
More Stocks = more growth potential + more volatility (up and down)
More Bonds/Cash = more stability + slower growth
Example:
90% stock / 10% bond portfolio = bold & long-term
60% / 40% portfolio = balanced & steadier
40% / 60% portfolio = conservative & calm
Risk Tolerance tells you what mix feels right
Risk Tolerance isn’t a number, it’s how you feel when the market moves
Your emotions, experience, and timeline all combine to determine the right risk tolerance
Ask yourself:
How would I react if my account dropped 10%?
Do I need emotional stability or can I handle long-term swings?
Do market dips make me panic or stay curious?
Am I investing for 5 years or 30 years? (your time horizon matters!)
Mindset tip: The best investment strategy is one you can stick with, even when the market gets noisy.
How do I put it all together?
Step 1: Choose a goal
Retirement? A first home? Investing for Future You?
Your goal drives your strategy.
Step 2: Pick your account
401(k) through work? Start there!
No employer plan? A Roth or Traditional IRA works great.
Step 3: Pick your investments
A diversified index fund or target-date fund is great for most beginners
Low-cost & simple
Step 4: Automate it
Set $25, $50, or $100 to invest automatically every paycheck.
You’ll barely notice it but Future You absolutely will.
Mindset tip: The best time to start was 10 years ago. The second best time? Today.
Start Small, Grow Steady
Investing doesn’t have to be complicated or intimidating.
You just need to:
Start small
Stay consistent
Let time do its thing
At Funwell, we help you understand your plan, your goals, and the habits that build wealth so investing feels simple, not stressful.
