Investing is no longer just for experts in suits and ties. Today, anyone in can start investing from their smartphone, with affordable amounts and without leaving home. Thanks to technology, platforms and even fintechs have democratized access to the world of investing. And when it comes to financial education, there are options for everyone: from paid courses at universities or brokerage firms to free content on YouTube, podcasts, and specialized blogs. Ready to take the first step? In this guide, we’ll explain how to start investing from scratch and create a realistic plan that fits your goals, risk profile, and current situation.
Create your first investment plan: 5 essential steps to Start Investing from Scratch
Before deciding whether to invest in stocks, funds, real estate, or CETES ( taxable income tax credits), you need something much more important: to be clear about your purpose. Do you want to save for a down payment on a house? Look for extra income for retirement? Or simply make sure your money doesn’t lose value with inflation? Here are the five basic steps for creating a good investment plan:
1. Set clear and realistic financial goals
Your financial goals are the starting point for any investment plan. They’re like a map: if you don’t know where you’re going, any path will seem right… until you stray or get frustrated. The first thing you need to know is that they’re not fixed or eternal. Your goals change over time. What you want at 25 isn’t the same as what you need at 40, and that’s okay.
What types of financial goals exist?
They can be classified according to the time frame in which you expect to complete them :
- Short term (less than 1 year): build up an emergency fund, pay off debt, save for a vacation.
- Medium term (1 to 5 years): make a down payment on a car, take a long trip, invest in a business.
- Long term (more than 5 years): buying a house , saving for your children’s college or your retirement .
Whether it’s saving, investing, paying off debt, buying land, or planning for retirement, it all starts with writing down what you want to achieve.
What makes a financial goal useful?
Be clear, concrete, and realistic. For example:
- ✅ “I want to save $10,000 dollars in 12 months for a down payment on a vehicle.”
- ❌ “I want to have more money”
The more specific your goals are, the easier it will be to design an action plan, choose the right tool, and measure your progress.
2. Know your risk profile: What is your “investor self” like?
One of the most common mistakes when starting out in investing is jumping in without knowing how much risk you can—or want—to take. This is where your investor profile comes into play, which basically defines how comfortable you are with potential losses in exchange for potential gains. Not everyone looks for the same thing when investing: some prefer to play it safe and sleep soundly, while others are willing to tolerate more ups and downs if it means earning more in the long term.
What factors define your risk profile?
Two fundamental elements:
- Potential profit: what you could earn from your investments.
- Risk assumption: how much you are willing to lose without panicking.
The rule is clear: the greater the risk, the greater the potential profit… but also the greater the chance of losing money. And vice versa: if you take on less risk, your returns will also be lower. Therefore, if you’re just starting out, it’s best to take things step by step. No greed or impulsive decisions. Investing is a race for endurance, not a sprint.
Types of risk profile
- Conservative Profile: This type of investor prefers to protect their capital rather than multiply it. They seek stability and avoid volatility.
- Typical instruments: CETES, government bonds, savings accounts with yield, short-term debt funds.
- Yields: low, but stable.
- Ideal if: it’s your first time investing or if you need the money in the short term.
- Moderate Profile: Here, there is a greater appetite for risk, but not to the extreme. Stable assets are combined with a portion of equity.
- Balanced portfolio: one part in fixed income (CETES, bonds, debt funds), and another in variable income, such as shares of large companies ( blue chips ), ETFs or index funds.
- Ideal if: you already have basic experience, invest for the medium to long term, and can tolerate some volatility without panicking.
- Aggressive Profile: This profile seeks high returns and is willing to accept temporary losses. These individuals have experience, time to follow the market, and a high-risk tolerance.
- Typical investments: individual stocks , cryptocurrencies , currencies (Forex) , commodities , REITs or thematic funds.
- They tend to diversify a lot, but they do not invest (or invest very little) in conservative instruments.
- Ideal if: you already master the markets, you can do analysis on your own or you even live off your investments.
Caution: If you’re just starting out, stay away from aggressive strategies. They’re not necessarily bad, but they require knowledge, guts, and time.
3. How much money should I start investing?
One of the most frequently asked questions is: can you really start investing with little money? The answer is yes. What’s more, starting with a small amount of capital is the best option when you’re just starting out. Why? Because you’re learning. And it’s better to make mistakes with $500 than with $50,000. Today, thanks to digital platforms and fintech, you no longer need large sums to enter the world of investing. You can start with just $1 and build your portfolio little by little, at your own pace.
How much to invest according to your profile?
Conservative profile: If you haven’t yet taken the step towards the Stock Market, you can start with low-risk, high-liquidity instruments, such as:
- CETES Direct, where you can invest from $100 commission-free.
- Savings accounts with daily returns, offered by digital banks.
- Short-term debt funds.
These options are ideal for building your emergency fund or saving money with higher returns than a traditional account.
Moderate profile: Want to start trying out the stock market without going all in? There are some super-affordable options :
- Purchase fractional shares from $1 on platforms such as Webull.
- Investing in ETFs or index funds, where you can invest with small amounts and gain diversified exposure to global markets.
- Automated portfolios ( robo-advisors ), which create a diversified strategy based on your profile and goals.
The idea here is to learn while your money works, without putting your financial stability at risk.
4. Where to invest your money? Options based on your risk profile
We’ve reached one of the biggest questions when you’re just starting out:
What’s the best investment option? The good news is that today there are tons of options, with widely varying risks and returns. The key is to choose based on your profile and goals, not what’s “in fashion.”To begin, let’s look at six types of investments, ranked from lowest to highest risk, starting with the simplest:
Interest-bearing accounts and interest-bearing balance accounts
They’re ideal for very conservative profiles. Basically, they’re bank accounts that pay you interest just for keeping your money there, without having to invest it in market instruments.
| Feature | Detail |
|---|---|
| Definition | Bank account that offers interest on the balance you maintain. |
| Profitability | Very low (between 1% and 6% annually, depending on the bank). |
| Risk | Practically zero (they are regulated and protected). |
| Main advantage | High liquidity, without penalties or forced deadlines. |
| Disadvantage | In many cases, it does not exceed actual inflation. |
💡 These accounts allow you to make transfers, receive your paycheck, and use cards. In other words, they work just like a checking account, but with the added benefit that your money actually earns something while it’s there. Some brokers also offer interest-bearing accounts, where uninvested money (but already deposited) also earns interest. For example:
- apps offer an annual return of 4,5% on uninvested balances.
- Some fintech companies such as M2Crowd or CETES Directo+ also use this modality.
Of course, they usually have conditions such as:
- Maximum amounts paid.
- Inactivity fees.
- Limited coverage in case of bankruptcy (up to $200,000; less if it is a fintech).
Bank deposits: safety first
Term deposits remain an attractive option for those with a conservative profile looking for a simple, hassle-free investment. The idea is simple: you give the bank a certain amount of money for a specific period, and at the end, they return it to you along with the previously agreed-upon interest. No surprises, no volatility… but no great returns either.
| Feature | Detail |
|---|---|
| Definition | You give your money to the bank for a fixed term, in exchange for an agreed rate. |
| Profitability | Medium-low (currently between 3% and 7% annually). |
| Risk | Very low. Protected up to $200,000 per holder . |
| Main advantage | Secure and volatility-free income. |
| Disadvantage | It almost never exceeds inflation in the long term. |
How liquid are the deposits?
Although the money is “frozen” for the agreed-upon period, some banks offer liquidity windows. These are dates when you can withdraw your money without penalty. However:
- If you withdraw outside of those windows, the bank may charge you an early withdrawal fee.
- It’s important to read the contract carefully: some deposits lose all returns if you decide to withdraw them early.
💡
Real-life example: If you take out a 180-day deposit at a 6% interest rate, but cancel it on day 90, you may only get your principal back… or receive a lower return.
Are deposits safe?
Yes. Deposits are protected, which covers up to $200,000 per person per bank, in case of bankruptcy or intervention.
Of course, if you deposit more than that amount in a single bank, it’s better to diversify among institutions.
Is it worth investing in deposits?
It depends on your goal. If you’re looking to preserve your capital and have certainty about how much you’ll receive, they can be useful. But if your goal is to beat inflation or grow your money over the long term, there are more cost-effective options.
Index funds: passive, diversified and accessible investment
Index funds are an excellent option for those with a moderate or aggressive profile who are looking to invest simply, with a long-term vision, and without having to monitor the market every day. This type of fund doesn’t try to beat the market. Its strategy is to replicate a stock market index , such as the S&P 500 and the NASDAQ 100. In other words, when you invest in an index fund, you’re buying a “small piece” of all the companies that make up that index.
| Feature | Detail |
|---|---|
| Definition | Fund that replicates the performance of a stock market index. |
| Profitability | Average (historically between 7% and 11% annually over the long term). |
| Risk | Medium. Depends on market volatility. |
| Ideal for | Investors with a moderate or aggressive profile who think long-term. |
| Main advantage | Diversified investment, with low fees and no active trading. |
| Disadvantage | You are exposed to market ups and downs. |
How to invest in index funds?
There are two main paths:
- ETFs (exchange-traded funds):
You can purchase them from platforms and fintechs. Some of the most popular ones are:
- VOO (replicates the S&P 500)
- IWDA (replicates the MSCI World)
- QQQ (NASDAQ 100)
- SPY (replicates the S&P 500)
- Robo-advisors and platforms with automated index funds:
Some platforms offer diversified passive investment schemes, ideal if you want to make regular contributions without complications.
Why are they so popular?
Index funds have gained ground around the world for several reasons:
- Low fees: Since an active manager is not required, costs are minimal.
- High liquidity: you can enter or exit easily.
- Instant diversification: You reduce risk by being exposed to dozens or hundreds of companies.
- Simplicity: You don’t need to know technical analysis or monitor the market.
💡 An S&P 500 index fund includes companies like Apple, Microsoft, Amazon, Google, and other global giants. It’s like having an automatic portfolio of the world’s strongest companies.
Investing in the stock market (stocks and ETFs): more risk, more potential
If you have a moderate or aggressive profile, the stock market may be the next logical step in your investment journey. We’re already talking about greater risk exposure here, but also real opportunities to achieve attractive returns in the medium and long term. Both stocks and ETFs (exchange-traded funds) allow you to participate directly in financial markets, either actively or through more passive strategies.
| Feature | Detail |
|---|---|
| Definition | Direct purchase of stocks or ETFs that replicate indices or sectors. |
| Profitability | Medium-high (depending on the asset and investment horizon). |
| Risk | Medium to high. Frequent volatility. |
| Main advantage | Access to global companies and the possibility of significant returns. |
| Disadvantage | It requires financial knowledge and tolerance for uncertainty. |
What does it mean to invest in stocks?
This is the most traditional way to invest in the stock market:
you buy a company’s stock, hoping its value will increase over time or that it will pay dividends. For example, you could invest in:
- US companies such as Apple , Tesla , Amazon or Microsoft , through all platforms that operate in US and international markets.
- Companies from other countries like in Europe.
Each share you buy represents a part of the business. If the company does well, you win too. If it falls, you also feel the impact.
And what are ETFs?
An ETF is like a combination of many stocks. Instead of buying just Apple, you buy a fund that contains Apple, Microsoft, Google, and many more. Some popular examples:
- VOO: Replicates the S&P 500 (the 500 largest companies in the US).
- QQQ: Technology-focused, replicates the NASDAQ 100.
- Vanguard FTSE Emerging Markets: exposure to emerging markets.
What factors cause a stock or ETF to rise or fall?
Investing in the stock market isn’t a gamble. Many factors influence the price:
- Market supply and demand.
- Economic news or central bank decisions.
- Quarterly results of the company.
- Entries or exits from stock market indices.
- Regulatory changes, splits, or even rumors and leaks.
That’s why it’s crucial that, if you decide to enter the stock market, you get training or seek professional advice.
Real estate investment: Is it worth investing in real estate?
Although it’s not the easiest way to get started, real estate investing remains one of the most popular. Culturally, many people prefer to see their money converted into bricks and mortar rather than stocks or funds, due to the sense of security and control it provides. But beware: it’s not a beginner’s game. Buying a property requires capital, time, and assuming certain risks. Still, if done right, it can be a solid source of passive income. Common ways to invest in real estate
- Buy to resell: The classic strategy of buying low and selling high. This involves acquiring properties in areas with potential for capital gains and selling them after a few years.
- Advantage: capital gain.
- Risk: The market may stagnate and take longer to recover than expected.
- Buy to Rent: The idea here is to generate monthly cash flow. You can buy a property and rent it out:
- Traditional (long stay): ideal for urban apartments or family homes.
- Vacation (Airbnb): attractive in tourist destinations.
Pros
- You generate passive income while holding the asset.
- You can sell later, even with a current contract.
Cons
- Legal uncertainty: If the tenant stops paying, legal proceedings can be lengthy and costly.
- Fixed expenses: property tax, maintenance, insurance, utilities, and potential periods without a tenant.
What if I don’t want to buy an entire property?
There are ways to invest in real estate without buying an entire property:🏢 FIBRAs (Real Estate Investment Trusts)They’re like shares in a real estate portfolio. You invest in shopping centers, hotels, offices, or industrial warehouses, and you receive a share of the income they generate.
- They are purchased from platforms from $1.
- They are liquid (you can sell them whenever you want).
- They pay periodic returns similar to dividends.
🏦 Real estate investment funds – there are specialized funds that invest in companies in the sector or in rental properties. They give you diversification without having to manage anything yourself.
- These may include construction companies, developers, international REITs, etc.
- They are accessible through mutual funds or global ETFs .
Other alternative assets (more complex and risky)
To close, there are some assets that may sound tempting, but are not recommended if you are just starting out:
- Gold or precious metals: used as a safe haven, but with high volatility and no cash flow.
- Cryptocurrencies such as Bitcoin or Ethereum: highly speculative assets, with drastic price fluctuations and still limited regulation.
💡 If you’re interested, do your research and start small. Remember:
don’t invest in anything you don’t understand.
5. Define your strategy: How to invest intelligently?
You already know how much you’re going to invest and where. The next step is equally important: defining how you’re going to do it. Because, while the asset you choose is important, the strategy you follow makes a difference in your long-term results. Here I explain two key concepts that every investor should know (and apply): compound interest and Dollar Cost Averaging (DCA) .
Compound interest
You’ve probably heard it before, but it’s worth repeating: compound interest is the most powerful force in the world of investing. What does it consist of? Basically, it involves reinvesting profits so they also generate returns. That is, the interest is added to the principal, and that total amount generates more interest… and so on.💰 Practical example: Suppose you invest $10,000 and earn 5% annually. At the end of the first year, you have $10,500. If you reinvest that total in the second year, you’ll earn 5% on $10,500—not the original $10,000—giving you a profit of $525 that year.Over the long term, this effect becomes exponential .🔁
The longer you let your money work, the stronger this effect becomes.
Dollar Cost Averaging (DCA)
DCA , or “dollar-cost averaging,” is a simple yet powerful strategy. It involves investing consistently over time, regardless of whether the market is rising or falling. Instead of putting all your money in at once, you divide it into regular contributions: monthly, biweekly, quarterly… whatever suits your budget.📈
Practical example: You have $100,000 and want to invest them in an index fund or stocks.
- Option A: You invest them all today and wait.
- Option B (DCA): You invest $10,000 each month for 10 months.
If the market falls after your first purchase, you’ll be buying more cheaply on subsequent purchases, which lowers your average cost and improves your profitability when the market recovers.
Pros
- Reduce the risk of investing just before a crash.
- It allows you to take advantage of market declines.
- It’s automati : you can schedule your contributions and forget about the topic.
- Ideal for those who don’t want to guess “when is the best time.”
Cons
- It requires patience and discipline.
- It may seem boring, especially if you like to be “doing things” all the time with your money.
But remember: in investments, boring is often the most profitable.
Why start investing?
It doesn’t matter if you want to invest to buy a house, retire comfortably, pay for your children’s college tuition, or simply make your money work for you.
The important thing is to get started. And the sooner you do it, the better. Still, if you need a good reason to take the plunge, here’s the most powerful one: inflation.
Inflation
Average annual inflation has ranged between 4% and 7% in recent years, with even higher peaks in food and services. What does this mean in practice? That if you leave your money sitting idle (in cash or in a non-earning account), it’s worth less each year. It’s that simple. And you don’t need to be an economist to understand the impact: money that isn’t invested loses value over time. Many people still think that keeping their money in cash or a payroll account is “the safest option.” But in reality, that’s letting inflation slowly erode it. That’s why investing is necessary, not optional. Even if you’re just looking to maintain your purchasing power, you need to find instruments that offer a return that exceeds inflation.
Building long-term wealth
Beyond protecting yourself from inflation, investing is the most effective way to build wealth with a vision for the future. If you really want to stop living paycheck to paycheck, this is the way to go.
Compound interest + time = real growth
Investing isn’t just about seeking high returns, it’s about understanding how money grows over time. And in that sense, compound interest is your best ally: you earn on your initial investment and on the accumulated profits. The key? Start as soon as possible.
Time is more important than amount.
🧠
A young person who invests $100 a month from age 25 can end up with more money than someone who invests $200 a month from age 40.
Relying solely on your pension? Bad idea.
The current pension system doesn’t guarantee a decent retirement for most people.
Pension system functions as individual savings accounts, but what you accumulate depends on how much you contributed, how many years you worked, and your salary. According to estimates, many people could retire with just 30% or 40% of their last salary. Is that enough to live well? That’s why investing to supplement your pension is essential. If you build a retirement portfolio now, you’ll have a financial cushion that will make the difference between worrying and enjoying your old age.
How to start investing as a young person?
Blessed is youth… make the most of it.
If you’re in your 20s or even younger, you have an asset no veteran investor can buy: time. And in the world of finance, time is money. Or rather, it’s compounding returns.
Golden rule: the sooner you start, the more your money grows
Investing from a young age isn’t about having large sums, but rather understanding that compound interest multiplies your money the longer it’s invested. Plus, by starting early, you have room to learn, experiment, make mistakes, and start over without it destroying your financial future.
📈 If you invest from age 20, even a little, you can accumulate more than someone who invests three times as much… but starts 10 years later.
What if I don’t have much money? It’s okay: start small.
A common excuse is, “I want to invest, but I don’t have enough money. ”Spoiler alert:
You don’t need much to get started.
Real options for investing with little money:
- Fractional shares: Platforms allow you to invest from $1 in fractional shares of companies like Tesla, Apple, or Amazon. Ideal if you’re just starting out.
- ETFs or mutual funds with minimum contributions: you can start with $1 in index funds. The important thing is to be consistent: schedule automatic monthly contributions, even if they’re small.
Why start even with a little?
- You’re starting to understand how brokers, the market, and your investor profile work.
- You create the habit of investing, and that is worth more than any simulator or course.
Today is learning. Tomorrow is financial freedom.
How NOT to start investing? 3 common (and avoidable) mistakes
Starting to invest is exciting. But it can also backfire if you get carried away by impulses, unfounded advice, or poorly chosen platforms.
The most common mistakes when investing are many, and some are expensive: choosing the wrong broker, trading without a strategy, getting carried away by rumors, or investing in assets you don’t even understand. But if I had to choose just three, these would be the most dangerous for someone just starting out:
Mistake 1: Choosing the wrong market
One of the most common mistakes is wanting to start with the most complex and volatile markets, such as:
- Cryptocurrencies
- Forex (currencies)
- International stock indices
- Raw materials such as gold or oil
And don’t even mention leveraged products like futures, options, CFDs, or warrants. All of this may sound very attractive, but it’s not for beginners. If you’re just starting out, focus on intuitive and stable products, such as:
- Fixed-income investment funds
- Global ETFs
- Shares of solid and well-known companies
The key is to learn the basics first and grow from there.
Mistake 2: Using leverage without knowing what you’re doing
Leverage is like driving a sports car without brakes… if you don’t know what you’re doing, you’re going to crash. It involves trading with more money than you have, using a kind of “temporary credit.” If it goes well, you earn more. But if it goes wrong, you can lose all your capital in minutes.
Example: You invest $1,000 with 10x leverage. If the asset drops by just 10%, you’ve already lost your $1,000.
❗
Leverage is not bad per se, but it is NOT for beginners.
Instead, focus on creating a healthy, long-term investment strategy without risking what you’re not willing to lose.
Mistake 3: Bad psychology — cutting profits and letting losses run
This is a classic… and even experienced investors fall for it. When an investment starts to make a profit, many rush to sell it “just to be safe.” But if it starts to lose money… they let it ride, hoping “it’ll recover.” This is a dangerous psychological mistake that can affect your long-term results.
🔁 The pattern repeats itself:
quick sales when you’re making a little, and eternal endurance when you’re losing a lot . The result: a stagnant or overdrawn portfolio.
💡 The solution? Have a clear strategy and follow it with discipline. Define your goals, set stop losses if applicable, and don’t make impulsive decisions.
Financial culture: never stop learning
In the world of investing, as in life, you never stop learning. Even if you’ve been in the markets for years, if you’ve mastered concepts, or if your portfolio is doing great… there’s always something new to discover, adjust, or better understand. Markets change, products evolve, technology advances, and so does your life. Therefore, financial education must be ongoing, no matter what stage you’re at. Today more than ever, there are many resources to continue your education without spending a fortune:
- Classic and modern books on investing, behavioral economics, and personal finance.
- Online courses: free and paid on platforms such as Udemy, Coursera, and even some banks and brokerage firms that offer education to their clients.
- Stock market simulators: practice without risking real money.
- Community: Social networks like Twitter, Reddit, or investor forums where you can exchange ideas and learn from others.
