Investing 101 covers the practical steps a beginner takes to move money from a savings account into the market: opening a brokerage account, picking a small set of low-cost funds, sizing that mix to their age and timeline, and then leaving it alone. It matters because sitting entirely in cash loses purchasing power to inflation over time, while a simple, diversified portfolio held for decades has historically been the most reliable way ordinary savers build wealth. The non-obvious part is that the hardest skill here isn't picking investments — it's behavioral: the biggest gains in market history cluster tightly around the worst days, so an investor who panics and sells during a downturn often locks in losses and misses the recovery that follows. Everything below assumes a taxable brokerage account used for general investing, not a tax-advantaged retirement account (that's its own topic) or short-term savings goals.
What This Cheat Sheet Covers
This topic spans 11 focused tables and 82 indexed concepts. Below is a complete table-by-table outline of this topic, spanning foundational concepts through advanced details.
A jump-to index of every table row in this cheat sheet.
An interactive map of every table and concept in this topic.
Table 1: Opening and Setting Up a Brokerage Account
Before you can buy a single share, you need a place to hold it. This table covers the practical mechanics of choosing a broker and opening the account itself, including the paperwork, protections, and account types you'll encounter.
| Step | Example | Description |
|---|---|---|
Fidelity, Schwab, Vanguard, Merrill Edge | Most beginners use a self-directed online broker rather than a full-service advisor; look for $0 commissions, no account minimum, and a solid mobile app. | |
One owner, no contribution limits, no early-withdrawal penalty | The default account type for general investing outside retirement plans; you can deposit, withdraw, and invest any amount at any time. | |
SSN, address, date of birth, employment status, annual income, investment objectives | Brokers must collect this to comply with know-your-customer and tax-reporting rules before the account can trade. | |
Cash account: pay the full price for every purchase | A cash account requires paying in full for trades; a margin account lets you borrow against your holdings, which adds leverage risk beginners should avoid. | |
ACH bank transfer, wire transfer, mailed check, or an account transfer (ACAT) from another broker | ACH transfers are free and typical but can take 1-3 business days to clear before funds are available to invest. |