When you start investing you need to know that investing money on the stock market comes with certain risk. Before you invest you also have to figure out how much money you want to start with.

If you are new to investing it’s not a good idea not to invest all your money without learning about the basics. There are too many people start investing too much money without the knowing basics of investing. It’s better to start to invest with less money perhaps with a couple of hundred dollars while you master the investment terms. It’s also a good idea to keep an emergency fund and never touch it.

As I mentioned investing comes with risk. How much risk are you willing to take? Remember the money you invest is not insured, when you lose it its gone. Stocks are the riskiest investments. Mutual funds are a lot less risky since they are more diversified. Buying bonds are even much safer and you can still earn a lot more money than in a regular savings account. The higher the risk the more money you can make but also the more money you can lose.

You have to learn how much risk you can take also called risk tolerance. Starting with a little money and watching the stock market you will learn to get used to the market fluctuation without panicking.