Inflation fears and pessimism about personal finances and the economy persist in the minds of many Americans. According to a recent survey by payroll processing firm ADP, 64% of American workers reported being under financial strain.
Despite everyone’s money concerns, now is the best time to start investing. Putting your money in the market is better than trying to time the market or stashing it in a stuffy savings account. If you want to make 2026 the year you start to take control of your personal finances, you’re taking a powerful step toward building long-term wealth.
That’s what many money experts think, including ex-Wall Street economist Vincent Chan, who has built a steady following on his YouTube channel by dispensing practical advice on money matters. In a recent video, Chan detailed what you should be looking to do this year if you have any available cash to invest.
Define Your Investing Purpose
Having a clear investing goal helps you define your risk tolerance, your time horizon, your asset mix and your progress track. Are you investing for retirement decades away, a house in five years or something else? Regardless, leaving funds you could be investing sitting in a savings or checking account with paltry interest rates is a literal waste of time and money.
“Investing not only grows your money and your wealth, but it also protects it from inflation,” Chan said. This might not sound exciting to get-rich-quick schemers, but getting rich overnight shouldn’t be your goal.
The goal for this year is to start investing, and that means growing your money through compound interest, or earning interest on both the money you initially invest (the principal) and the accumulated interest from previous periods.
Check Out: I Got Rich Investing — These Lessons for Beginners Could Lead To $1 Million Net Worth
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Start With Beginner-Friendly Funds
If you are starting to invest this year, Chan suggested that index funds or exchange-traded funds (ETFs) are the way to go because they’re diversified, low-cost and uncomplicated. The best index funds — investments that follow the performance of a benchmark index (e.g., the S&P 500) — offer less volatility than stocks and lower fees than actively managed mutual funds or buying stocks.
Index funds provide instant diversification and historically outperform most actively managed funds over the long term. “Investment funds have long been the key building blocks for a diversified portfolio. Over the past several decades, the exponential growth in the number and variety of ETFs has provided investors with more choices — at lower costs — than ever before,” Amanda Mentis, head of U.S. ETF capital markets at J.P. Morgan, wrote in an article.
Is Now the Best Time for You To Invest?
Yes, the standard advice is now is the best time to invest. But according to Chan, you should consider two crucial things before taking the plunge.
First, he asked, “Do you have any high interest debt with more than 10% interest rate?” Then, he asked, “Do you have three to six months of an emergency fund?” These are two common investing questions, but both are so fundamental that they bear repeating.
You simply cannot continue to pay debt interest and not have anything available for unexpected expenses and expect to succeed in your investing career. Don’t make silly choices with your hard-earned money. Your emergency fund should be held in a high-yield interest account, and your credit card interest needs to be addressed, since those rates typically exceed what you’d earn investing.
When You’re Ready To Invest
The options available to first-time investors are excessive. Like many experts, Chan believes that building your wealth though retirement accounts, like a 401(k) or a Roth IRA, or opening a brokerage account through an established firm, is the best plan for a beginner.
If you have access to a 401(k), consider yourself lucky to have the opportunity to contribute. Otherwise, there’s nothing wrong with starting an IRA or a regular brokerage account with fees you can afford. Your investments are more liquid when invested in a brokerage account, but your money is better protected from taxes in a retirement account.
What Investments Does Chan Recommend?
Chan ended his beginner investor tutorial with three index fund recommendations. Depending on your risk tolerance and timeline, Chan suggested looking into the SPDR Portfolio S&P 500 ETF (SPLG), the Vanguard Growth ETF (VUG) and the Schwab U.S. Dividend Equity ETF (SCHD). The expense ratios (how much of your investment in a fund will be deducted annually as fees) for these three funds are 0.02%, 0.03% and 0.06%, respectively.
There’s no perfect way to start your investment journey. However, it’s important to start investing when you can so that your money can start earning passive interest for years to come. If you can, you should be starting with a modest, low-cost diversified portfolio held in a tax-advantaged account.
Always automate contributions, disregard short-term blips and trust compounding, which Einstein considered the “eighth wonder of the world.” As with starting most things, don’t worry about not knowing everything. The importance is starting and being consistent.
Editor’s note: This article is for informational purposes only and does not constitute financial advice. Investing involves risk, including the possible loss of principal. Always consider your individual circumstances and consult with a qualified financial advisor before making investment decisions.
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This article originally appeared on GOBankingRates.com: If 2026 Is the Year You Start Investing, Here’s What This Money Expert Recommends
