You may be thinking about starting an investment account, but you also have a number of questions about it. From where to get the money to fund it in the first place to how to choose the right one and more, if you do not have much experience investing, it might feel like you don’t know where to begin. However, with the right foundation and perhaps some professional advice, you can start small and learn as you go.

Identify Your Goals

You need to decide what your goals are for the money that you will invest so you can pick the most advantageous option. Common reasons for opening an investment account include saving for retirement, saving for a child’s college education, saving to buy a home and increasing wealth. You should also think about how much time you have to reach your goal, how important criteria like flexibility and tax perks are, and how involved you want to be in managing your investments.

Set Up Funding

There are many ways to get the money for funding, from taking on a second job or freelance work to spending less to selling things and more. One painless way to increase your cash flow is to refinance your student loans. You may be able to pay less in interest and have more money each month, which you can then set aside for your investment account. You might be able to refinance other loans, such as your mortgage, in the same way.

A Retirement Account

A 401(k), Roth, or traditional IRA can help you save toward your retirement. Your employer may offer a 401(k), and you can fund it directly from your pay so you aren’t tempted to spend the money at all. Many employers match employee deposits although you usually need to stay at the job for a certain number of years to keep this. You can open an IRA even if you already have a 401(k). These different accounts offer different advantages. For example, contributions to a Roth IRA are not tax-deductible, but withdrawals are tax-free while the opposite is true of a traditional IRA. However, many employers are now offering the ability to open a Roth 401(k) account, so employees can enjoy tax savings in both retirement plans.

A College Savings Account

You can open a 529 or a Coverdell education savings account to put away money for your child’s college education. This can be done through an online broker, where you’ll open a brokerage account, or using what is called a robo-adviser. The latter is simply a portfolio management company in which much of the work is done for you by computer. These allow your deposits to grow tax-free as long as you use them for higher education. You can have a certain amount of your money automatically transferred into them from your bank

A Taxable or Non Retirement Account

You will need this if you do not have a specific purpose for the money. You may not get any particular tax advantages, but this is also much more flexible than others in terms of when you can make withdrawals and what you can use it for.