About 18 months ago I began exploring a new investment strategy.

For several years mutual funds, savings accounts and individual stocks were my go-to choice for investing in the stock market. In recent years I’ve heard lots of chatter about Index Funds. My curiosity was peeked.

Index Funds are an investment that follow a specific market index, such as the S&P 500 or the NASDAQ. When you invest in an index fund, you are buying small portions of a company. Since Index Funds are made up of several companies, you essentially become an owner of shares in several companies.

Sounds great! None the less, I didn’t want to jump in head first. I decided to test the waters first. I approached this experience with eagerness, caution, and intentionally, excited to see what it would yield.

Here’s what I did:

• Opened an account at my brokerage firm (I use Fidelity)
• Researched Index Funds to identity a fund that aligned with my goals and values
• Set-up automated transfers from my bank account into my brokerage account (if you’ve read some of other blog posts or Linked In posts you know I’m a big fan of automation)
• Set-up automated weekly investments to my index fund

I started with $250. Then I committed to investing $25 every week into the FXAIX (benchmarked against the S&P 500 index).

Over the past year the account returned ~ 20%

What I learned:

• Investing in Index Funds is simple to start.
• Returns can be impressive.
• Starting small is powerful, we all have to start somewhere.
• Consistency is everything.

Key Takeaways

• Start. You don’t need a lot of money to get started.
• Small amounts matter. Small amounts add faster than you think.
• Automate. Pay yourself first; $25 weekly is average cost of two days of packing your lunch.

Disclaimer: This is for illustrative purposes only. Always do your own research and due diligence before investing. Past performance is not indicative of future performance.

What’s Next:

Next, I’ll explore building a dividend generating portfolio. I’m curious on how this investment strategy can create passive income. (Stay Tuned! I’ll share what I learn.)

P.S. I still plan to continue my index fund journey in 2025.