If you're new to investing, here are five easy ways to test the waters
Almost half of Black stock investors are between the ages of 18-34
This post is part of a series entitled “BlackTechLogy.” Click here for the archived posts.
I was casually scrolling through Bluesky when I came upon one status update declaring that the majority of Black people don’t own stock and don’t always invest in 401(k)s, so we wouldn’t care that it’s crashing under the Trump administration’s tariffs. Meanwhile, I actually do invest in stocks and bonds and wondered why this lady was speaking on behalf of the entire Black population instead of her social circle.
That declaration bothered me enough to point out that not only is it discouraging to claim she knew what the majority of us do and don’t do in our own households, but the National Financial Capability Study confirmed that “investors of color are entering the market at a faster pace than white investors” since 2021.
The NFCS and Financial Industry Regulatory Authority’s “Investor Education Foundation” report went on to elaborate about how African-American and Latino investors tend to be much younger than white investors. While they don’t have the family lineage to take personal notes from prior investors the way that young, white (and Asian) investors potentially could, that hasn’t stopped a new crowd (between the ages of 18-34) to start investing: 49% Black (18-34) and 45% Latino (18-34). Meanwhile, they’re joined by 21% of white people and 23% of Asian people in the same age group.
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As an Amazon affiliate, I earn a percentage from purchases with my referral links. I know some consumers are choosing to boycott Amazon for its DEI removal. However, after thinking about this thoroughly, I choose to continue promoting intriguing products from small businesses, women-owned businesses and (specifically) Black-owned businesses who still feature their items on Amazon. All five of my Substack publications now include a MINIMUM of one product sold by a Black-owned business. (I have visited the seller’s official site, not just the Amazon Black-owned logo, to verify this.) If you still choose to boycott, I 100% respect that decision.
While Black and Latino investors are not working with the same amount of money to invest — 59% have less than $50,000 in their non-retirement portfolios — that hasn’t stopped their motivations to invest. For Black investors, the top three reasons they’re investing are: 1) to make money for the long term, 2) to make money for the short term and 3) to learn more about investing.
Recommended Read: “If Trump permanently gets rid of pennies, what happens to Acorns? ~ Consumers who invest loose change in savings programs and investing will be on the losing end”
But without a family lineage of investors, knowing how to invest may be confusing. It helps to have a few options under a new investor’s belt to see what type of investing makes the most sense for their future.
Here are five (reasonably) easy ways to start investing as a newbie.
1. Support e-commerce companies where you already shop online and in person.
While diversifying a portfolio is a constant piece of advice offered to new and established investors, it may seem more attractive to invest in companies you actually want to support as opposed to opening a brokerage account to buy an exchange-traded fund (ETF) or buy a mutual fund in which you can’t pick and choose. (Mutual fund portfolios change regularly and are less transparent than ETFs. ETFs will show you the package of companies you’re investing in. For example, an S&P 500 ETF may list Apple, Microsoft and Amazon.)
Recommended Read: “Apple and Costco defending DEI proves companies can fight back against GOP ~ Consumers can make their voices heard online and at brick-and-mortar stores”
But let’s say you’re opposed to Amazon and Microsoft because of the recent anti-DEI decisions, and you still have love for Apple and retailers like Costco. Beginner investors can specifically choose which individual stocks they want to buy. Brokerage platforms like Fidelity and Vanguard make this a possibility. If you don’t need a house full of bulk items, investing in Costco stock is another way to say “thank you” for them fighting back against anti-DEI demands. New stock investors can buy a portion of stock (fractional shares) until the amount reaches one individual stock (or more), or invest in the asking price outright. If the deductions are on autopay, it’ll be that much easier to stop staring at the highs and lows in the stock market too.
Recommended Read: “What Costco has that Amazon doesn’t ~ How the well-known warehouse has made itself the winning underdog”
2. Find platforms (like bonds) that make you comfortable while investing.
In the NFCS and FINRA report, one Black male user summarized investing this way: “For me, the stocks are for being responsible. And the crypto is more like a casino.” For some people, visiting a casino is a world of entertainment and excitement. They can’t wait to head toward the Blackjack table or play Poker. Some will even see what’s going on with slot machines. For others, this type of gambling makes as much sense as playing the Lottery. In other words, they’re not even slightly interested.
Recommended Read: “5 reasons to avoid joining Robinhood ~ Finding a mobile-friendly app for IRAs and stocks doesn't outrank human customer service”
Instead of trying to invest in something you don’t understand — nor do you even want to understand, regardless of how popular it is — stick to an investment option that you’re comfortable with. Compared to stocks, U.S. Treasury bonds are a snoozefest — and you like it that way. You could open an account with Vanguard, Fidelity, Firstrade, Etrade, Webull, Wells Fargo or Charles Schwab. Or, go straight to Treasury Direct. Set up a brokerage account. Then, buy a short-term bond (less than three years) or a long-term bond (10 or more years), and just let it sit there.
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The lender (you) has deposited money to a company or government, who then borrows it. You would then receive funds from investors in exchange for them borrowing your money, promising to pay back the principal amount at a later date. (This is sorta like buying items on Affirm. You’re borrowing money to buy something on an e-commerce platform like Amazon, and then Affirm makes a profit from you borrowing from them.)
The main difference is instead of paying the platform back in three months to a year, bonds should ideally be held for up to 10 years until it fully matures. Then, the bondholder receives the original investment you deposited (principal) back, in addition to interest payments (coupons) that were distributed semi-annually or annually.
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As an Amazon affiliate, I earn a percentage for every purchase with my referral link.
3. Look for neighborhood companies to invest in.
While companies like the Community Development Financial Institutions Fund already focus on providing economic growth and opportunities in some of our nation's most distressed communities, you can do the same. Let’s say there’s a beauty supply store in your neighborhood, and you know the company is struggling to make ends meet (especially now with the uptick in tariffs).