Start by setting aside a small amount regularly, even $25-50 per month. Consider low-cost index funds or ETFs that don't require large minimum investments. Many brokerages now offer fractional shares, allowing you to invest in expensive stocks with small amounts. Focus on building the habit of consistent investing rather than the amount.

Risk tolerance depends on your age, financial goals, investment timeline, and emotional comfort with market fluctuations. Consider how you'd react to a 20% portfolio decline. Younger investors can typically handle more risk due to longer recovery time, while those nearing retirement should prioritize capital preservation. Online risk assessment tools can help evaluate your comfort level.

ETFs are investment funds that trade on stock exchanges like individual stocks. They typically track an index, sector, commodity, or basket of assets. ETFs offer diversification, lower fees than mutual funds, and the flexibility to buy and sell throughout the trading day. They're ideal for investors seeking broad market exposure with minimal effort.

Stocks represent ownership shares in a company. When you buy stock, you become a partial owner and can profit through price appreciation and dividends. Stock prices fluctuate based on company performance, market conditions, and investor sentiment. Stocks offer higher growth potential than bonds but come with greater risk and volatility.

Inflation is the rate at which prices for goods and services rise over time, reducing purchasing power. It impacts investments by eroding returns if they don't outpace the inflation rate. Investors combat inflation by choosing assets that historically outperform it, such as stocks, real estate, and inflation-protected securities like TIPS.

Risk tolerance is your ability and willingness to endure losses in your investment portfolio. It's influenced by factors including financial situation, investment goals, time horizon, and emotional capacity to handle volatility. Understanding your risk tolerance helps you choose appropriate investments and maintain your strategy during market downturns without making emotional decisions.

An IRA is a tax-advantaged retirement savings account. Traditional IRAs offer tax-deductible contributions with taxed withdrawals in retirement, while Roth IRAs use after-tax dollars but provide tax-free withdrawals. Annual contribution limits apply, and early withdrawals before age 59½ typically incur penalties. IRAs are essential tools for building long-term retirement wealth.

Compound interest is earning interest on both your initial investment and previously earned interest. Often called "interest on interest," it accelerates wealth growth over time. The earlier you start investing, the more powerful compounding becomes. For example, $1,000 invested at 7% annual return grows to over $7,600 in 30 years through compounding alone.