How to actually start investing

This is the page I want to hand to anyone who’s ever asked me, “I think I should start investing, but I have no idea where to begin.” It’s the talk I’d give over coffee, written down so I don’t have to remember it every time.

A note before we start: I’m a data engineer studying to become a financial advisor. I’m not a licensed advisor yet, so nothing here is personal advice — it’s the general framework I’d use myself, and the same framework I’d want anyone in my life to use. For your specific situation, talk to a real advisor.

1. Start small. Really small. The habit is the asset.

The single biggest mistake I see is people waiting until they have “enough” to start. There is no such thing as enough. Anyone who’s ever started investing started by being willing to put in the first €50.

When you’re starting out, the amount of money you invest matters far less than the habit of investing it. Putting €50 a month into an index fund will not change your life this year. But it will quietly install a routine that does change your life over a decade — because the money grows, but more importantly, you grow into someone who automatically saves and invests. That habit is worth more than the first few years of returns.

So: start with whatever you can comfortably spare. €25, €50, €100. Set up an automatic transfer on the day after payday so you never see the money sitting in your account. Then forget about it for a year and look again.

2. Build the emergency fund first

Before any of the investing math matters, you need a buffer between you and life’s surprises. Cars break. Boilers die. Jobs end. The point of an emergency fund is that none of these events forces you to sell your investments at the worst possible moment (which, by the laws of universal humour, is when the market has just dropped 25%).

The rule of thumb is three to six months of essential expenses, kept in cash. “Essential” means rent, food, bills, transport — the bare minimum to keep your life running. Not your gym membership, not your streaming services, not the coffee. You’re sizing the floor, not the ceiling.

A few specifics:

Six months is the better target if your job or income is unstable, you have dependents, or you’re self-employed. Three months is fine if you have a stable salary, no dependents, and a fast labour market for your skills.
Keep it in a bank account that pays interest. This is the easy upgrade nobody bothers with. A high-yield savings account or a money market fund pays meaningfully more than a current account, while still being instantly available. Don’t lock it up in a 12-month deposit — the whole point is that you can reach it tomorrow.
Don’t invest your emergency fund in stocks. I know it feels like you’re “missing out on returns.” You’re not. You’re paying a small premium for the option to never have to sell investments under stress. That’s the most valuable option you’ll ever buy.

Once your emergency fund is in place, then you start investing. Not before.

3. Pick the right app

For most people in Europe, the choice is between a handful of low-cost online brokers and the new generation of investment apps. The thing nobody tells you up front is that the tax regime the app puts you under matters as much as the fees.

Italy-specific: regime amministrato vs regime dichiarativo

If you're investing from Italy, every broker you sign up with will put your account under one of two tax regimes. This choice is bigger than the fees — it changes how much paperwork you do every April for the rest of your investing life.

Regime amministrato ("administered regime") — the broker is your tax substitute. They calculate the capital gains tax on every sale, withhold it automatically, and pay it to the Italian tax authority on your behalf. You don't put anything about your investments in your own tax return. This is the "set it and forget it" option, and it's what almost every Italian-resident first-time investor should pick. The trade-off is that some brokers don't offer it (most foreign-domiciled brokers like Interactive Brokers or Trading 212 only offer regime dichiarativo).
Regime dichiarativo ("declarative regime") — you are responsible for everything. You compute your own capital gains, you fill in quadro RT (capital gains) and quadro RW (foreign-held assets) on your tax return, and you pay the tax yourself. This isn't impossible, but it's a real annual chore, and getting it wrong has consequences. Many people start in dichiarativo without realising what they signed up for, then regret it.

My honest opinion for someone starting out from Italy: pick a broker that offers regime amministrato (Fineco, Directa, IWBank, several of the bank-owned brokers), even if the fees are slightly higher. The few euros a year you save by going with a foreign broker are not worth the annual headache of declaring your own gains — and the moment you mess up quadro RW the fines are not symbolic. You can always switch to dichiarativo later when you actually want the optimisation; you cannot easily un-mess-up a botched tax return.

Outside the tax wrinkle, the things to look for in any broker are:

Low fees on the products you’ll actually buy — usually a global stock ETF and maybe a bond ETF. “Zero commission” is nice but check the spreads and the FX cost if you’re buying in a different currency.
Access to UCITS ETFs — the European version of index ETFs. Don’t buy US-domiciled ETFs from an EU residence; you can’t, legally, in most cases, and the ones that look like they’re available usually aren’t.
Solid regulator and a real custodian. Boring is good. The broker holding your money should be supervised by a national regulator and your assets should be held separately from the broker’s own balance sheet.
An interface you’ll actually open once a month, not a gamified one designed to make you trade. If the app pushes notifications about hot stocks, walk away.

4. Match the strategy to you

This is the part most beginner content skips, because it’s the part that requires you to think about yourself instead of about products. There is no universal “best portfolio.” There is only the best portfolio for your situation, and it depends on four things:

1. Your risk tolerance. Not what you tell yourself in calm markets — what you’ll actually do when your portfolio drops 30% in three months. If you’ll panic-sell, your “risk tolerance” is lower than you think it is, and your portfolio should reflect that. Better to hold a more conservative mix you’ll actually stick with than an aggressive mix you’ll bail on at the bottom.

2. Your time horizon. How many years until you actually need this money? If it’s more than ten, you can comfortably take stock-market risk — the historical data on 10+ year holding periods is genuinely reassuring. If it’s two or three years, you should not be in stocks at all; you should be in cash and short-term bonds. The biggest single driver of how much risk you can take is how long you have before you’ll need to sell.

3. The goal. “I want to retire at 65” is a different problem from “I want to buy a house in 5 years” is a different problem from “I’m building generational wealth.” Each goal has its own time horizon, its own appropriate risk level, and ideally its own pot of money. One pot for “retire someday” is fine to start with. As your situation gets more complex, splitting goals into separate accounts becomes useful.

4. Big planned expenses. A wedding next summer, a house down payment in three years, a kid’s university in twelve. These are non-negotiable cash needs and they should not be exposed to market risk if they’re inside your time horizon. Earmark that money in safer instruments and let the rest of your portfolio take real equity risk.

A reasonable starting framework for a long-horizon investor (10+ years) is something like: emergency fund in cash, then a global stock index ETF as the main growth engine, then a smaller bond allocation as a stabiliser. The exact percentages depend on the four points above, and that’s where I’d genuinely sit down with you (or with a real advisor) and talk it through.

A note on what I can and can’t do

I’m not yet a financial advisor. What I can do is explain how things work — what an ETF is, why fees compound against you, what regime amministrato actually means on your tax return, why your time horizon is the most important number you don’t know off the top of your head. What I can’t do is tell you “buy this, sell that, put 60% here.” That’s the line between education and advice, and it’s one I take seriously even before the licence makes it legally binding.

If you’re reading this because you want to start, here’s the sequence I’d actually recommend:

Build the emergency fund. Six months in a high-yield savings account.
Open a broker account in regime amministrato (if you’re in Italy).
Set up a small automatic monthly purchase of a global stock index ETF.
Don’t touch it for a year.
Come back to me (or to an advisor) once you’ve actually done all four, and we’ll talk about what to do next.

That’s it. The boring path. It works.