The idea of investing may be especially intimidating for young adults — that group between the ages of 18-24 — currently called Generation Z. But as intimidating as it might sound, the earlier you start investing, the more successful you will likely be. And since Generation Z collectively holds $115.5 billion in student debt, it’s more important than ever that they begin proactively working toward a financially secure future.

One element of investing that can be specifically overwhelming for newbies is knowing where and how to start. Here are eight easy ways for Gen Z to start investing.

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1. Investing goals

The first step to achieve any goal is to establish what your goal is. So before you start investing, decide on a few specific investment goals. Having short-term goals as well as long-term goals is a good way to get yourself on track and stay there. For example, a short-term goal might be to save $2,500 in a year to start your investing, while a long-term goal is retirement.

Trying to meet your short-term investment goals will show you if your investment strategy is working and it will also allow you to make adjustments to your portfolio as needed. Long-term goals will take patience, but you need to stick to them.

2. Do your research

Investing through a company such as Fidelity or Robinhood can be a great place for young people to start investing. Trading fees are typically low and they have good educational materials.

Once you have chosen which company will handle your trading, think about what company’s stock you might want to invest in. That’s where the real research begins. Is it a company you want to own for a long time or one whose share price you think will rise quickly and then you’ll sell? Or you may want to invest in a company whose products or services you already use.

Before you invest, make sure you read the company’s annual report and read what professional money managers think of its prospects. This is how you begin to build your portfolio.

3. Risk tolerance

Not all investments are created equal. Some investments offer high risk and high reward, while others are low risk but may take more time to deliver a smaller return. Assess your individual comfort level as well as your financial position. Can you stomach a 20% drop in the market?

Being able to financially and emotionally survive the highs and lows is crucial to successful investing. So, try to find an investment option compatible with your individual risk tolerance. Your stress levels will likely thank you for it.

4. Select an investment vehicle that works for you

Different investments work for different people. It can be easy for people interested in becoming investors to think only of the most recognizable investment options as a starting point: individual stocks, mutual funds, index funds, exchange-traded funds.

Other areas like real estate investing, commodities, cryptocurrency, or starting your own business may require more research. While these can all be great options, you can also consider safer vehicles such as high-yield savings accounts, money markets, and bonds. The important thing is that you understand all your options before making your selection.

5. Choose how you will invest

These days, new investors have many options when it comes time to decide how they will invest. In fact, there are so many options it may feel a bit overwhelming. But taking your time and doing your research will allow you to find the best brokerage accounts, the best robo advisors, the best online brokerages, or the best investment apps.

Choosing which method will work best for you will largely depend on your personality, your lifestyle, and how much money you are planning to invest.

6. Get your compound interest rolling

The Gen Z cohort is still young, which makes saving for the future sound like something you’ll have plenty of time to do later. But if you invest in an interest-bearing account — like a high-yield savings account — your money is earning money. For instance, you invest $5,000 in an account with an annual percentage yield (APY) of 0.50%. After a year, you will have $5,025. That will continue to grow 0.50% each year, but each year you will have more money as your base. We call this compound interest.

If you get your compound interest rolling when you’re young, you can save less money and still make more of it. While retirement may seem very far away, when you do retire, you’ll still have a large chunk of your life left to live. You cannot save for retirement too soon. So begin by contributing to your 401(k), a traditional IRA, or a Roth IRA now, and you will likely be able to retire with security later.

7. Look into crypto

Investing in cryptocurrency is a popular choice for both Gen Z and millennials, with 94% of crypto buyers falling between the ages of 18 and 40. Crypto is a form of digital currency created through encrypted algorithms. You can buy and sell crypto through either a broker or a crypto exchange.

Crypto exchanges may be overwhelming for beginners, but most of them offer interface options designed for newbies, although these beginner-friendly options will typically cost more. Brokers like Robinhood and SoFi may be a better fit, but keep in mind that they often restrict investors from moving their crypto out of their account.

Whether or not investing in crypto is a good fit for you will depend on your personal risk tolerance. Crypto is the hot new thing, but keep in mind that also means its success remains largely untested.

8. Invest through your employer

One of the simplest ways to start investing is to look into your company’s retirement investment options. At many companies, retirement investment plans like 401(k)s are a standard part of the benefits package.

One of the best parts about investing through your employer is that there’s someone to help you every step of the way and that you can begin investing for as little as 1% of your paycheck. Be sure you find out if your company offers to match some of your annual contribution and take advantage of that.

Bottom line

One of the reasons investing can be so intimidating at first is the terminology. Most people may be familiar with some of the terms but not be entirely sure what they actually mean. So, start slow, read a basic investing book, and don’t be afraid to ask for help.

Many young people report wanting to invest in ideas that align with their values. Perhaps one of the best ways to start investing is to find a business you feel good about supporting, even as you invest in your own future.

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