Getting started

The first step to investing is setting your financial goals. Start by understanding your current financial situation.

4 numbers to know

1. What you own

List all your assets. This includes big items like your home, car or boat. It also includes your savings and investments. You’ll find this information in bank and investmentInvestment An item of value you buy to get income or to grow in value.+ read full definition statements, retirement savings and other pensionPension A steady income you get after you retire. Some pensions pay you a fixed amount for life. Others save up money for you while you are working. You use that money to create income after you retire.+ read full definition papers, and your will.

2. What you owe

Total up your debts. This includes any student loans, mortgages, car loans, credit cards and other debts. Look for your mortgageMortgage A loan that you get to pay for a home or other property. Often the loan is for 20 years or more. You make a set number of payments for a set amount each year.+ read full definition records, loanLoan An agreement to borrow money for a set period of time. You agree to pay back the full amount, plus interest, by a set date.+ read full definition papers and credit card bills.

Use this worksheet to create your budgetBudget A monthly or yearly estimated plan for spending and saving. You work it out based on your income and expenses.+ read full definition. Learn more about budgeting.

3. What you earn

Figure out your total income, including your pay, investment income and any other income. Look for this information on your taxTax A fee the government charges on income, property, and sales. The money goes to finance government programs and other costs.+ read full definition returns, accountAccount An agreement you make with a financial institution to handle your money. You can set up an account for depositing and withdrawing, earning interest, borrowing, investing, etc.+ read full definition statements and pay stubs.

4. What you spend

Track how much money you spend every month. This includes basics like food, clothing, utilities, and car costs, as well as extra expenses like eating out, going out, insurance, health or dental bills, and money you donate. Look at your bills, receipts and credit card statements. Don’t just estimate – add up bills and receipts for at least a month to get an accurate picture.

Key point

6 steps to investing:

  1. Set your goals
  2. Know your investing personality
  3. Create your plan
  4. Choose your asset mixAsset mix The percentage distribution of assets in a portfolio among the three major asset classes: cash and cash equivalents, fixed income and equities.+ read full definition
  5. Choose your investments
  6. Track your progress

Take action

Find out:

  1. What you own
  2. What you owe
  3. What you earn
  4. What you spend
Last updated