A Step by Step Investing Plan for Beginners Starting From Scratch

I've been investing for over 40 years and made multiple millions in the process. But if I started again today with no investments, a low salary, and a phone, what would I do? I've been asked that question on lots of different occasions. So today, I'm going to show you the step-by-step process I'd follow to set everything up as a complete beginner. By the end of this video, you'll know how to set up your account, make your first investment, avoid all the beginner investing traps, and get a free fractional share to kickstart your investing journey. Just quickly before we start, remember, I'm not a financial advisor and this isn't financial advice.

I'm just showing you exactly what I'd do if I started again today. Most people never even make it past this step and I understand why. Because this first decision can feel like a confusing one. There are so many investing platforms out there and if you're just getting started, it can feel completely overwhelming. I've spoken to loads of beginners who say they don't know which ones are reliable. They're not sure who to trust and they feel like they don't know enough to make a smart decision. So what are the things you need to look out for? Well, if I was starting again from scratch, these are the key things I'd have on my checklist. First, I want to be covered by the FSCS because if it's not, I'm not interested. This means if

the platform goes bust, you'll be protected up to 120k. Then, I look at the fees because even small charges can add up over time. Next, I'll make sure it offers the right account types, especially a stocks and shares ISA, along with a good range of stocks, ETFs, and funds to choose from. Now, don't worry if some of those terms don't make sense. I'll be going over them later in the video. And finally, it needs to be easy to use because the last thing you want is a platform that makes investing more complicated than it needs

to be. There are lots of investing platforms that fit this criteria, such as the ones I'm showing on the screen right now. Feel free to take a screenshot, but if I had to choose just one and I was starting out from scratch, as that's of course the point of this video, I would have to pick Trading 212. If you pick a different app, then that's fine. You'll still be able to get a lot from this video. I'll drop a link in the description. If you use that link, then it'll also make it easier for you to get a free fractional share later on. You're also going to need to grab a few important things.

First is a valid photo ID like a passport or a driving license. Second is your national insurance number. Now, if you don't know this, then just check one of your pay slips and you'll find it just up on there. If you don't have any pay slips, then check your P60, tax letters, or personal tax account online. You're looking for a number like this. It starts with two letters followed by six numbers and then a final letter. Third is proof of address. Something simple like a utility bill is fine. And fourth, you'll need to be ready to take a quick selfie during verification. So, make sure you're somewhere with good lighting. Okay, all set? Let's move on.

Believe it or not, not all investing accounts are equally as good and making the wrong decision could end up costing you thousands in unnecessary taxes. Let me show you exactly what I mean. When you first open up the Trading 212 app, it gives you the option to either log in or open a new account. So, let's just tap open Now, we need to select a country of residence. I'm of course going to choose the United Kingdom and press next. Of course, just select where you're from. Trading 212 actually support over 100 countries globally across the UK, Europe, the Middle East, Asia Pacific, and parts of Latin America. You'll then get to this page which gives you the different account options you can choose

from. Remember how important I said this was? I know it can seem a bit overwhelming, but that's why I'm here to help you. So, let's break it down properly. The first option here is called invest. It's just like a standard investing account where you can buy and sell shares. You can open as many of these accounts as you want with different platforms. It's kind of like opening a bank account. You can have a regular checking account with Chase, Bank of America, and Wells Fargo all at the same time. But, just bear in mind with a general investment account like this one, you do have to pay tax on your profits. This is known as capital gains, and the amount you'll have to pay varies

from country to country, but generally you'll pay 10 to 20% tax purely on the profits. The second account on the list is a CFD account, which is for day trading stocks and commodities. I personally never touch day trading as 80 to 90% of traders lose money. It's also very high maintenance. So, if you're a beginner, I'd recommend to avoid it, too. Then, we have the stocks ISA, also known as a stocks and shares ISA. This is something called a tax advantaged account, and most countries have one, such as a Roth IRA in America. These types of accounts let you invest in stocks, bonds, and other assets, and not have to pay tax on your profits. But, because it's such a powerful account, there is a limit. You can only

contribute up to a maximum 20K per tax year into an ISA. Now, when I tell beginners about the ISA, a lot of them get confused and think it means you can't earn more than 20K, but that's not the case at all. People also assume you can only have a maximum of 20K in the account. This is also wrong. The 20K limit is only on how much you can put into the account per year, not on what you make or how large the account balance becomes. So, you could grow a portfolio of over 1 million and still not have to pay tax on your profits. So, if you don't already have a stocks and shares ISA, I'd highly recommend this account. And the one is the cash ISA, where your money just earns interest instead of being invested in

the stock market. Think of it like a savings account with a tax advantage. Any interest you earn is completely tax-free. Now, this might sound like a safe and easy option, but there is an important trade-off, and that's growth. The interest rates on cash ISAs are typically a lot lower than what an index fund like the S&P 500 has returned over the last 10 years. Of course, investments can go up and down. However, historically, an index fund strategy has beaten saving cash. Don't worry if that all sounds a bit complicated. We'll be breaking it down a bit later. For now, all you need to know is that if I was starting again from scratch, then I'd pick the stocks and shares ISA in a

heartbeat. So, that's what I'm going to do. Right now, investing in platforms are competing for users. And what better way to attract customers than to give away some free investments? And that's exactly what Trading 212 are currently doing. I mean, there's nothing better than getting a free fractional share to start your investing journey. And I've seen people get up to £100 completely free. So, in this step, I'm going to be explaining exactly what you need to do to secure your free fractional share. By the way, a fractional share is just a small piece of a company. So, to secure this, you'll need to complete some simple steps like entering an email, creating a password, entering your name

and address, and providing your national insurance number. The process is the same for whatever account type you decide to open. And believe me, I do understand that some questions can feel a bit invasive and personal, but I assure you, it's all standard practice for any regulated platform that offers financial services. In fact, I'd be more worried if they didn't ask. They'll then get you to complete a mini quiz. This is so Trading 212 can gauge your understanding of the risk and see how potentially losing money will impact you financially. This is because when investing, the value of your investments can decrease as well as increase, and they have a duty of care to make sure

you understand that. Once you've completed those simple steps, just click on the three lines that you can see here on the bottom right-hand corner and click deposit funds. It'll then take you to this page where you're greeted with a few different options to deposit. Personally, I always use the instant bank transfer as it's free and it arrives in seconds, which is great. So, let's go ahead and click instant bank transfer where you can connect a bank account and initiate a deposit. Now, you can put in as little as £1. It will bounce you around a bit from the Trading 212 app and your bank. Don't worry about that, it's completely normal. And once completed, the deposit you made will

appear in your account almost instantly. It should then award you a free fractional share worth up to £100, but if it doesn't, don't panic. Just click on the three lines again on the bottom right and scroll down to use promo code and enter the code Tilbury and boom, you'll have claimed your free fractional share. Let me know in the comments what you got. And you know what? I'll give the coolest ones an extra $100 each. At this point, a lot of people freeze because they're suddenly faced with thousands of choices like individual stocks, ETFs, commodities, and precious metals. It can feel pretty overwhelming, but it really doesn't have to be complicated. So, instead of trying to

outsmart the market, I'd suggest you copy this simple strategy that's great for beginners. It's designed to grow steadily, survive recessions, and keep you invested [clears throat] for decades without stress. It's called a three-fund portfolio and it's the favorite method among a group called the Bogleheads, a very well-known community inspired by John Bogle, the founder of Vanguard. Because it's so simple, with low fees and a focus on diversification, it's perfect for the average investor who wants growth without the hassle of constantly managing their investments. So, by understanding this strategy, you're putting yourself in a position to invest with one of the most reliable

methods out there, all with very little effort. So, what's actually in a three-fund portfolio? Well, surprise, surprise, it consists of three funds. Think of a fund like a big basket filled with lots of different companies, and buying the basket gives you some ownership of all of them. The first fund in a three-fund portfolio is normally a US stock index fund, which consists of lots of US-based companies like Apple and Amazon. A good example is VTI, which is the S&P 500 accumulation. The accumulation just means dividends are reinvested automatically, and when you buy a share, you're actually investing

[clears throat] into America's top 500 companies all at the same time. The second fund is an international stock index fund, which is similar to the US-based one, but instead covers companies outside the US. And the final fund is something called a bond fund, which helps provide stability as they're generally less volatile than stocks, and can help smooth out the ups and downs of the market. So, the question is, how do you split your money between the three funds? Well, that all depends on your risk tolerance. An older investor who wants to protect their wealth might go for a split like this: 35% US stocks, 25% international stocks, and 40% bonds.

A middle-aged investor might choose this: 45% US stocks, 30% international stocks, and 25% bonds. A young moderate risk investor might opt for this: 55% US stocks, 35% international stocks, and 10% bonds. And a young aggressive investor might do this: 60% US stocks, 40% international stocks, and oh, no bonds. Notice how this mostly depends on your age. That's because younger people have longer to stay invested if there's a market crash. Historically, with this kind of portfolio, you have time to wait these out. Then, you come out stronger than before. However, if you're forced to sell for retirement, you could end up making a loss. That's why, in my opinion, it's actually

riskier not to take calculated risks while you're young. So, hopefully, you now know what kind of investing portfolio fits your situation. Let's head back to the investing platform and actually buy some stocks. This is an exciting but somewhat daunting moment for a lot of people. I remember the first time I made an investment. I was so happy and excited about the potential of becoming a part owner in some of the biggest companies in the world. But, at the same time, I was pretty scared of getting it wrong and somehow losing my money. Let's jump onto my phone and, as you can see here, I'm currently on the home screen of the Trading 212 app, where you can see top

movers, my watch list, top winners, and so on. I'm going to ignore this for now and instead hit this magnifying glass here, which is the app search feature. Once you've clicked that, in the search bar at the top here, you can type in the name of any investment you'd like to make. So, for example, let's type in Tesla. And, as you can see, it just pops up right here. This works exactly the same way for whatever stock you're searching for. So, as you can see, if I type in Amazon, there you go. There's Amazon. If I type in Costco, there's Costco. I know a lot of you'll be interested about investing in individual stocks like this. So, let's

buy one together, and then I'll show you how to set up a three-fund portfolio. I treat individual stocks as a bit of fun. And, if you decide to buy them, I'd recommend only doing it with a small amount of your portfolio, as they're far more risky. With that said, let's actually make an investment. Now, I'm feeling like a bit of Tesla, so let's head back to the search bar and type in Tesla. There we go. Let's open that up and then hit buy. You'll then arrive at this screen where you can see the overall price of the stock, how much the price has actually moved today, and a few different order types like market,

limit, stop, and stop limit. I know they might sound a bit confusing, so let's break it down. A market order is by far the simplest. You're basically saying, "Buy this now at whatever the current price is." Which means the order gets filled instantly, but you don't control the exact price. If the order doesn't get executed right away, it'll be because the market is closed. So, it will go through as soon as the market opens at whatever the current price is. Then you have a limit order, which lets you set the maximum price you're willing to pay. The trade will only go through if the stock is under that price, which gives you more control, but means it might not execute straight away.

A stop order is mainly used when you want to buy a stock only after it starts moving up. You choose a stop price, and if the stock reaches that price, a market order is triggered to buy it. A stop limit order works in a similar way, but when the stock price is reached, a limit order is placed instead of a market order. This gives you more control over the price you pay, but there's a risk the order won't be filled if the stock moves up too quickly. If this is all getting a bit confusing, then the good news is that as a long-term investor like me, you don't need to worry about any of these too much. So, just go ahead and use a standard market order. A small price discrepancies won't matter much over the long term. So, let's make sure we're on

market order and make an investment into Tesla. And as you can see, a full share is currently trading at $422, but the great thing about Trading 212 is it allows fractional investing. There's a little drop down menu here where it says value. If you click this, you can change the investment from value to number of shares. Which one you decide to select depends on how you're investing. So, if you just want to invest a hundred pounds, have it on value. But, if you know you want a full share or half a share exactly, then select the number of shares. For now, let's keep it on value and invest a hundred pounds. Then click review order to make sure everything looks good and then click send buy order. And boom, just like that. We're now part

owner of Tesla. Add that to your CV. The best piece of advice I've ever heard about investing is to keep it boring. So, let's walk you through exactly how to set up the boring but extremely effective free fund portfolio we spoke about earlier. Okay. So, first of all, click this pie icon to access your portfolio. Then scroll down and select create a pie. Then click create a custom pie. And now, you can select whatever stocks you want to include in your pie. For our US stock market fund, let's search for S&P 500. There you go. This Vanguard one will do really nicely. Now, this fund allows you to invest in a tiny piece of 500 of the biggest and most famous companies in America like Apple, Amazon, and Coca-Cola. If you're based in the US,

then you can also pick the Vanguard Total Stock Market Index Fund, VT Sacks. This type of investment is great as it spreads your money across even more American companies, which is something you should consider as lots of the top companies in the S&P 500 are starting to dominate the index fund, making it a bit unbalanced and reliant on those companies. As I mentioned earlier, look out for the terms accumulation or distribution in the brackets. Personally, I go with accumulation as it reinvests your dividends back into the stock automatically. The less I have to think about it, the better in my opinion. Now, let's tap add to pie to select it and then let's go back and

search for our next one, which is our international fund with the ticker IWDA and tap add to pie. Now, this fund is like having a collection of companies from all around the world. Includes big businesses in places like Europe, Japan, and Canada. Now for our bond fund with the ticker IB TM and tap add to pie. This fund is like lending money to the US government. They promise to pay you back with a little extra, which helps keep your money safe and steady even if stocks go up and down. Now those are all added, we can click continue to go to the next step. Now on this page you can adjust the percentage allocation of your money to each fund. So this will depend on the portfolio split you decided on earlier.

As most of you will probably be on the younger side, let's go with a young moderate risk profile. Let's make the S&P 500 50%, the iShares world fund 40%, and the bond fund 10%, and click next. Once you've created your pie, you can open it up and then select auto invest to set up recurring investments if that's something you'd like to do. And it also gives you this really cool value projection, which shows you how much money you could make based on historical averages. Of course, when you invest, you can get back less than you put in as investments can rise and fall. But it's still a great way to get an idea of how much you could make based on data-backed

projections. I mean, say we invested £250 a month for 20 years. This says that you will only have invested £61,000 and your portfolio could be worth £262,000. And if you start making some extra money and expand it to £500 a month, that could give you a portfolio worth of £525,000, which is just over $700,000. It's worth having a play around with this as it's quite motivational seeing how much money you could make with a relatively small amount invested per month. So, most people focus on when to buy stocks, but knowing when to sell is just as important, maybe even more. The thing is, selling usually goes against our instincts. When prices start dropping, we tell ourselves it'll bounce

back or it's just a paper loss. And when prices are rising, we hesitate because we don't want to sell too soon and miss out on more. Even Warren Buffett, who famously says his favorite holding period is forever, has sold stocks when the time was right. I like to joke that my sell button is broken. But when I do sell, there's always a good reason behind it. I've made millions in the markets, and one thing I've learned is that holding onto a stock for the wrong reasons can cost you just as much as buying the wrong stock in the first place. So, if you're serious about investing, you'll need a clear strategy for when to take profits, protect your money, and move into better opportunities. Here are three main

reasons when selling makes sense. Reason one is if momentum is dying. Stocks move based on three types of value. First, there's fundamental value, which is what the business is actually worth based on real numbers like assets, revenue, and profits. This is the value investors like me look at when deciding if a stock is a good long-term investment. Then there's trading value, which is how the market prices a stock based on short-term supply and demand, trading volume, and price patterns. It's less about what the company is actually worth and more about how traders react to price movements. This is where technical analysis comes into play. Traders look at charts, trends, and historical data

to predict where the stock will move next. A stock's price can temporarily rise or fall, not because the company changed, but because traders are making moves based on technical signals. And finally, there's momentum value, which is driven by hype, trends, and emotions. This is when a stock's price skyrockets, not because of solid fundamentals or technical patterns, but because everyone is talking about it. But why does this matter? Well, if a stock is mostly running on momentum rather than real value, its price is fragile. And when the hype dies, so does the stock price. You can spot the risky momentum stocks by looking at things like Google Trends or StockTwits to see how much online

attention they have. If the spike in interest came out of nowhere, it's probably not going to last. Lemonade Inc. stock got pumped by influencers, but when the reality of the business's fundamental issues set in, the price collapsed. So, how do you protect yourself from a similar situation? Well, if you realize one of your stocks is surging based on hype, this is when you should consider selling a portion, maybe 30 to 40% to lock in some profits. Momentum always fades eventually. It's not a question of if, but when. I've seen people refuse to sell because they got caught up in the diamond hands culture, and they ended up losing everything when the momentum disappeared. Don't let that be you.

Reason two is if you need the money for a bigger opportunity. One of the best reasons to sell isn't because of the stock itself, but because you have a better use for the capital. Sometimes the smartest move is reallocating the money to something with even more potential. Take a real estate opportunity for example. If you're about to buy a great property deal, and you're relying on some of your stock investments for capital, holding on to that stock that could drop in value just before you get your mortgage isn't worth the risk. The same applies if you're starting a business and need capital. Waiting for stocks to rebound could mean missing your opportunity altogether. In the past, I've personally chosen to take

profits and reinvest in businesses I control, rather than just leave my money in the hands of the stock market. On that note, if you've been thinking about starting an online business, then I'm actually running a completely free online live training very soon, walking you through the number one business model to start that can make you $10,000 a month online with no previous experience or startup capital. If you'd like to come to that live training, then I'll leave a link in the description where you can secure your free ticket. Reason three to sell a stock is the market is shifted against you.

Sometimes, factors outside of your control completely alter a company's future. So, if the broader market shifting against the stock, it's usually best to get out before things get worse. A good example of this is Warren Buffett selling airlines during COVID. He saw long-term struggles ahead and cut his losses early. Or when he dropped Tesco's after an accounting scandal, he knew the company's leadership was no longer trustworthy. Personally, I remember when smartphones came out and the digital era took over. Because of this, traditional printed media took a hit. So, I decided to get out of all newspaper-based stocks. Now, how can you tell if

something like this is happening? I like to ask myself a few things to answer this question. First, is the company losing market share to a disruptive competitor? Secondly, have their management been making bad decisions like any fraud, mismanagement, or reckless expansion? And finally, is the business model becoming obsolete due to technology or industry trends? View it logically, stocks don't care if you own them. If the fundamentals change, holding out of loyalty will cost you. Being willing to cut ties when the market tells you to is what separates smart investors from those who get left behind. So, let's say you've decided to sell a stock and take some profits. How do you actually do it? Well, you'll need

to go onto the portfolio tab where you can see all your investments. Then just tap on the stock you'd like to sell. So, let's go with this one and then press the big sell button that appears at the bottom. It then gives you all of these different options that we spoke about earlier like market, limit, stop, and stop limit. These work in the exact same way as I explained before, just in reverse as you're selling and not buying. Honestly, most of the time a market sell is more than fine, but if you want to experiment with the others, then feel free. You can use this slider to select the amount of shares you want to sell, and you can see the value underneath. Now, just bear in

mind this won't happen immediately if the market is closed. Look, as I said, I'm a long-term investor and hardly ever sell my stocks, especially my index funds and ETFs. As the old saying goes, time in the market beats time in the market because time is the only thing you can't fake. Compounding doesn't care about motivation, opinions, or emotions. It only responds to consistency. The people who win aren't the smartest, the fastest, or the most confident. They're the ones who stay invested, don't panic when markets fall, stop chasing hype, and trust a simple system long enough for time to work in their favor. So, if you earn money, invest regularly, reinvest what you make, and give it enough time, you're already using the

same strategy that has made me millions. If you want to find out why AI is changing how I invest, then I'm going to leave that video right up there, but don't click on it just yet. Make sure to subscribe if you want to grow your wealth, okay? I'll see you over there.