Want to invest but don't know where to start? Here are some pro tips

Nobody wants to worry about money, but many do, with high living costs and expenses. Saving and investing might seem like a fantasy for some, but it is just a matter of taking the proper steps.

According to a survey by The World Economic Forum, half of US adults lack financial literacy. However, with the right tips, investing is simpler and less risky than it seems.

For LearnVest CEO and financial expert Alexa von Tobel, the most critical step in starting an investing plan is understanding one's psychology and financial goals.

Wall Street Journal's Glenn Ruffenach agrees: it is vital to have a financial plan and commit to it, he said in a 2021 column about starting an egg nest.

Ms. Von Tobel recommended, during an interview on Vivian Tu's 'Net Worth and Chill' podcast, following a rule of five: do not invest money you need for goals set in less than five years.

So, her advice is to devise a financial plan with clear goals—buying a house, having children, or starting a business, for example—and use midterm investment options to achieve those goals.

The best options are high-yield savings accounts or certificates of deposit. In these, you commit to not moving the money for a fixed time while earning a percentage over it.

After you have guaranteed savings for emergencies and immediate goals, you can start thinking about investing money that you will not need for many years, Von Tobel added.

There is no clearer long-term money bucket than retirement funds, which could be the ideal goal for an investment plan. Mr. Ruffenach's advice is to start said plan early.

According to his 2021 column, a 2019 Morning Consult study found that 49% of subjects saving for retirement started in their 30s or older, but nearly half also said people should begin in their 20s.

Starting early could be the key to making a lot more money, despite the method you use for investing, due to compound interest (the interest accumulating over your initial investment), Mr. Ruffenach explained.

So, if markets seem big and scary, a simple way to start could be 401Ks, which employers sometimes double, or investment retirement accounts (IRAs).

According to Von Tobel, people often underestimate the amount of money they can earn by simply using the tools everyone has on hand.

Von Tobel also told Tu that whatever money is left, after filling the primary buckets of short and midterm dreams, can go to investing. For that, she recommends following the S&P 500.

The S&P 500 index tracks the performance of the largest 500 companies in the US stock market. Still, steadiness is critical, says Vivian Tu, the podcast host and author of the NY Times best-seller 'Your Rich BFF.'

According to Ms. Tu, buy-and-hold investors have a very high (90%) chance of making money in the long term. Thinking of stocks as a long-term investment helps.

Ms. Von Tobel said the most important advice she could give someone buying stock is to not react to sudden changes, circling back to the first lesson: know your psychology.

The financial expert recommended anticipating your reactions. If you are anxious, seek the aid of a financial advisor who can act as a "buffer" in times of panic.

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