How to Start Investing | 5 Simple Steps

These 5 simple steps take out the confusion and intimidating words with a simple guide to start investing for beginners.

Like many things we want to achieve in life, often the hardest part is starting. Once you’ve started investing, everything starts falling into place and you wonder why you didn’t start investing earlier.

That’s why we’ve made this simple 5-step guide that any first-time investor can use to start investing, even if you have no experience investing or only a small sum of money to invest.



STEP 1: Save money to invest from your budget 💰

Before you even start thinking about what investments to make, the first step is making sure you have some money to invest. The number one rule is that the money you use for investing should be money that you don’t need for life’s essentials like paying rent or the mortgage or groceries.

TIP: A good place to start is to put 100 CHF aside each paycheck for investing.

Once you get more comfortable with the process, you can aim for 10% of your salary or month earnings going towards investments. If your budget is tight, then some sacrifices will need to made by reducing spending on some areas to make room for investing.

There is no minimum amount of money you need to invest. You can start investing with $100 but again like most things – the more you put into it, the more you will get out! If you already have some savings, don’t invest it all at once, start slow and increase your asset allocation towards investments as you grow your understanding of how investing works.

STEP 2: Invest in your company pension scheme 🌃

“But I want to do my own investing!” we hear you say. That’s fine and you will. The huge advantage to company pension schemes is that it is so easy to start. You can setup an automatic payroll deduction of a set amount each month and your investing goes into autopilot. Other benefits include tax deductions and ‘matching-schemes’ where your company will match the contributions you make to the scheme. Taxes and matching can make a huge different to your returns once you retire.

The disadvantage to company investment schemes is less choice. Oftentimes they will be restricted to the investment vehicles of one asset management firm. However, there is an increasing amount of autonomy available where you can mostly pick the kinds of investments you want in your retirement account. The other disadvantage is that these schemes are geared towards retirement, and you can be penalised if you withdraw funds early for other purposes like buying a home or paying for your children’s education.

STEP 3: Open an investment account 🌐

For most types of investments, even in real estate which is not something we discuss here – you need a financial intermediary. This normally means opening an online brokerage account or finding a financial advisor. If you plan to make your own investment decisions, the online broker will offer the lowest fees. A financial advisor will charge additional fees to give you investment advice.

FlowBank offers the security of a Swiss bank account with over 50,000 financial products to invest in using a convenient mobile banking app and desktop trading platform. Open a FlowBank account today.

STEP 4: Invest in bonds and index funds (passive) 📊

At this stage you need to assess your own risk tolerance, as well as how much time you will spend learning about investing and analysing opportunities in the market.

If you think you will prefer a “hands-off” approach, then you will be more of a passive investor. This means you will setup the investments you wish to make and hold them for the long term, rarely making any changes except by adding to your investments on a regular basis. The best investments to make for a passive investing strategy are bonds and stock index funds.


Governments and companies issue bonds in return for borrowing money from you. You basically become a lender to them. In return for lending your money, you will get regular payments called coupons and when the bond expires, you get your initial investment back. Governments are usually the safest to borrow from unless your country has a history of defaulting (not paying) its debt.

For example, in Switzerland you could buy 10-year Swiss government bond. This in effect means a loan to the Swiss government for 10 years but you can sell the bond earlier if you wish.

The lowest risk corporate debt you can buy is rated as ‘investment grade’. Most companies listed in the fortune 500 in the US or the equivalent well-established companies in your country will ‘investment-grade’ debt you can invest in.

Apple is the largest company in the world by market cap. You can buy Apple 5-year bonds, which means earning a return by lending to Apple for 5-years.

Index funds

A fund is created to make a variety of different investments. This normally involves buying several different stocks. The advantage here is that it means you can diversify. The idea of diversification is that the more different investments you make, the less risk each of those investments pose to your portfolio (all the money you have invested).

Individual investors used to do most of their investing via mutual funds but exchange traded funds (ETFs) are increasingly the most popular. This is because the fees are lower, there is more choice, and ETFs can be bought and sold anytime, just like an individual stock.

The most popular ETFs track the benchmark index of the stock market.

In Switzerland this might be the iShares SMI (CH) ETF that invests in the Swiss Market Index, a collection of the 30 largest company stocks in Switzerland.

STEP 5: Invest in stocks, forex or cryptocurrencies (active) 📈

If you prefer a more “hands-on” approach to investing – that means you are ready to put the time in and take greater risk in order to try to make market-beating returns. This investing approach makes you an active investor.

The idea is that if for example the stock market rises by 7% in the year, by making extra research and finding the best opportunities within the market, you will aim to make a higher return, perhaps 10% or 20% per year. Of course, if these investment picks don’t work out, your portfolio will earn less than the broader market.

Even for the active investor, the bulk of your investments will be passive. An entirely passive investors might have 100% of their portfolio in long term investments. An active investor would normally put 80-90% of their portfolio into long-term investments and leave 10-20% for higher risk/return opportunities.

The most popular short term investment opportunities are in in asset classes like stocks, forex, commodity futures and cryptocurrencies. For stock investors, there are growth invesment strategies, income stock investment strategies for dividend investors, all of which require more learning to perfect. 

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Investing FAQs

How do you profit from stocks?

Long term investing horizon with some selective active investments

How long does it take to make money from stocks?

The goal of investing is to grow your money over time, powered by a generally rising stock market and compound interest.

How can I start investing?

Open an account with FlowBank and use the FlowBank blog for investing education and ideas

What is the best age to start investing?

You must be over 18 to open your own investment account. The best investments are in yourself, for example getting a university degree. After that, the sooner the better.

How much do I need to start investing?

You can start with as little as $100 but ideally you will contribute to your investments on a regular basis by budgeting for it.

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