New to Investing? Take These 6 Steps to Get Your Savings Journey Started

No matter what your long-term financial goals may be — whether it’s buying a home, funding your retirement, sending a kid to college, building an emergency fund or something else — one of the best ways to see the money you set aside grow is to invest it wisely. But particularly for those who are new to investing, the wide range of investment options and the sometimes complicated concepts that come with the territory can be daunting, to say the least.

So, especially considering that April is National Financial Literacy Month, we here at Arthur State Bank thought it would be a good time to share a few insights on the basics of investing, along with a quick, step-by-step guide on how you can get started with your own investment portfolio.

What is investing?

Investing is the act of — rather than letting your money sit idle — putting unused funds into assets or financial products that can potentially grow in value over time. By making wise investments, consumers can “let their money work for them,” generating passive income and enabling them to sell the asset invested in at a later date for more money than they paid for it. Most investment offerings, though, do carry an inherent risk, presenting the possibility of losing some or all of the money that has been invested. For this reason, it’s important to be educated about your investments, develop an investment plan that aligns with your financial goals and your risk tolerance, and create a diverse portfolio of investments over time.

How investing works

With most investment types, the investor hands over his or her funds to become the owner of a hard asset (such as a property in a real estate investment), a part-owner of a company (such as when purchasing stocks), or a creditor to an organization or entity (such as when buying bonds). Factors such as market conditions, economic trends, and the law of supply and demand can impact the value of the investment over time. And when a good investment has been made, the asset or financial product the investor has purchased or otherwise procured will grow in value over time. In other cases, dividends (portions of company profits regularly distributed to shareholders) and/or interest payments can add to the value of the investment.

6 steps to starting your own investment portfolio

So just how can an aspiring investor get started? Here are six basic steps to creating an investment portfolio of your own:

  1. Start investing as soon as you’re able — When investing, time can be one of your greatest assets. For one, getting started with your investments early enables you to grow the total amount of money you have invested gradually, as even small amounts invested can grow into large sums over time. Further, thanks to the power of compound earnings, your investment returns can start to earn significant returns of their own over time, creating a snowball effect that contributes to a larger return on investment. No sum of money is too small to get started with. Even if the amount you can devote to starting your investment portfolio seems miniscule, by making a regular practice of investing, you can take gradual strides toward reaching your financial goals. And the sooner you start, the more progress you can make.
  2. Decide how much money you’ll invest — The amount of money you can afford to devote to investing will depend largely on your financial situation, your investment goals and your investment timeline. To start with, choose an amount that you can comfortably devote to investing after you’ve covered all of your living expenses, bills, debt payments and other financial priorities. Over time, you can increase the amounts you invest and ensure they’re in line with achieving your long-term financial goals. For example, if you’ve got a 401(k) retirement account at work, a good initial investment goal would be to contribute at least enough to the account to earn the full investment match that many employers offer. (That match essentially represents free money that you don’t want to miss out on.) From there, a good rule of thumb that many financial experts advise is to contribute 10% to 15% of your annual income (once that amount becomes realistic) toward your retirement savings.
  3. Determine how much investment guidance you’ll need — The investment strategy that’s right for you will depend on your savings goals, how much money you can contribute to your investments, how long you have to achieve your goals, and your levels of investing confidence and knowledge. Before you get started, you’ll want to decide what level of professional support and guidance you’ll need to build your investment portfolio. For those who have limited investment knowledge and appreciate one-on-one guidance from an investment expert, working with a professional investment advisor allows for ongoing, personalized advice as needed. Some consumers might want to minimize their involvement in the investment process and let the pros handle the decision-making. Choosing a professionally managed portfolio enables these consumers to, after sharing their investment goals and preferences, provide the needed investment funds, then largely step away. And for those who would like to be more involved in the process and who trust their investment knowledge and research skills, building and managing their own portfolio can be a rewarding route to take.
  4. Create an investment account — If you’re looking to start saving for retirement and don’t have a 401(k) account through your employer, you’ll want to decide what type of individual retirement account (IRA) best fits your needs, with two of the top options here being the traditional IRA and the Roth IRA. Both of these account types are designed to be used for building retirement savings, so they place limits on how and when you can withdraw your funds (without paying added fees and penalties).
    Other account types are better suited for achieving financial goals outside of retirement. For example, a brokerage account is a good option for investors looking to buy and sell stocks, bonds, mutual funds and other investments. Alternatively, for those aiming to simply set aside funds and let them earn interest, a savings account, money market account or certificate of deposit may be a good choice, especially for those looking to achieve shorter-term financial goals. And some of the top options for college savings include 529 college savings plans and Coverdell Education Savings Accounts.
  5. Examine and understand your investment options — Next, you’ll need to choose what you want to invest in, then actually make your investment purchases. Because all investments carry varying levels of risk, and each has its own pros and cons, you’ll want to make choices that align with your investment goals and risk tolerance.
    Some of the most popular investment options include:
    – Stocks: Also known as equities, stocks represent an investor’s ownership of a small portion (or share) of a company. Typically, as a company’s performance and value rise and fall, the stock’s value follows suit — making it impossible to know with certainty whether the return on investment will be negative or positive. But with this risk can come the potential for greater returns (and losses).
    – Bonds: A bond represents a loan made by an investor, typically to a company or a government entity. When the loan is given, the issuer agrees to pay the investor back the amount of the loan plus an agreed-upon interest, typically following a term of a specified number of years. Investing in bonds is generally less risky than investing in stocks, as the return on investment is known in advance. But with the lower risk, the ceiling on bonds’ long-term return is typically much lower than that of stocks.
    – Mutual funds: Representing a pre-packaged mix of stocks and bonds, mutual funds enable investors to purchase diversified assets in a single transaction without having to choose individual stocks and bonds. And because they’re inherently diversified, purchasing mutual funds typically presents less risk than purchasing individual stocks. Some mutual funds are created and managed by financial industry professionals (and thus carry extra management fees), while others follow the performance of a specified stock market index such as the S&P 500 or the Nasdaq.
    – Exchange-traded funds (ETFs): Similar to mutual funds, ETFs represent a mix of individual financial assets such as stocks and bonds that have been bundled together. But ETFs are purchased for a share price that’s often lower than the minimum investment requirement carried by mutual funds, and they can be traded throughout the day much like a stock.
  6. Relax, keep (not too close) an eye on your investments, and maintain the momentum — Now that you’ve started your investment portfolio, give yourself a pat on the back and work to grow your investment knowledge. Know that it’s perfectly normal for the value of your investments to rise and fall, especially over the short term. Try to avoid checking on your account value too frequently, as the short-term volatility you’re likely to observe can lead to added stress. Instead, try to stay focused on the big picture and your long-term investment goals — and keep setting funds aside for more investing.

Proudly serving South Carolina since 1933, Arthur State Bank offers accounts and services to meet a variety of financial needs. To help you achieve all of your financial goals, the bank offers in-person service as well as a range of convenient digital solutions. To learn how Arthur State Bank can help you with banking needs ranging from checking and savings to retirement accounts, mortgages, other personal loans and more, visit

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Man doing his banking online is the only source for free credit reports authorized by the federal government. Every 12 months, you can get a free copy of your credit report from each agency.

Your credit report has your credit history for all of your credit accounts as well as any credit inquiries and public record court information such as collections. In addition, the report provides personally identifiable information such as your name, address, and employment.

Be sure to carefully review all three reports to identify any problem areas that you may need to clean up prior to applying for a mortgage. If there is any incorrect information, follow the reporting agency’s rules to correct it or add a notation to the report to explain the situation.

Your FICO Score is a score combines data from several areas include payment history, the amount owed, length of credit history, new accounts. Many lenders use this score as a guide. This score is not provided as part of the free annual credit report.

Learn more about how your credit score impacts your ability to secure a loan.


Couple looking over finances

Primary considerations for setting your housing budget require an assessment of your income, debt and current savings for the down payment on the home. The following are generally recommended guidelines; however, you should meet with an Arthur State Bank lender to get personalized mortgage information.


Couple meeting with lender

The pre-qualification/pre-approval letter is included with any offer you make on a house to inform the seller that you have met with a mortgage lender and you are prepared to make an offer. The letter states that based on certain assumptions, the bank is prepared to lend you up to a specified amount of money for a home mortgage.

When choosing a loan officer, we recommend going local to work with someone who understands your community’s real estate market. This blog on first-time home purchases includes questions to ask your lender that may be helpful when preparing for your meeting.

Helpful Resources:


Realtor shaking hands with a client

When a house is sold, the seller typically pays real estate commission to both the listing agent and the selling agent. It is extremely beneficial for the buyer to use their own real estate agent. Loan officers can often recommend selling agents in the area; ask your officer about realtor referrals when discussing your loan.

A good realtor will know the local market and can help you find an ideal home based on your budget, location and desired features. During your search, understand that you will most likely need to compromise on some items, so it’s important to identify your critical needs versus your wants.


Couple searching online for a home

Additionally, when you start with the house search and work backwards, homes can often go off the market while you’re completing steps 1-4. While browsing homes immediately can be tempting, we recommend following these steps in order so that, once you find your dream home, you’ll be well-positioned to take action immediately.

When you find the home you want and you think you are ready to put an offer on it, you will want to make sure you have all the information you need to make a solid offer.

  • Evaluate the neighborhood.
  • Drive by the house at different times of the day.
  • Examine how other houses in the neighborhood are maintained.
  • Consider any potential traffic or other disruptive noise.
  • Is there ample parking for you and visitors?
  • Read the details in any Homeowner Association agreements (HOA fees and rules).

Make sure to do a preliminary check of house details:

  • Check the water:
  • Does it have good pressure?
  • How long does it take to get the water hot?
  • Is it well water or city water?
  • Turn light switches on and off.
  • Open and close doors and windows to make sure they work properly.
  • Review previous utility bill expenses.
  • Consider the property tax bill.


Family meeting with realtor at new house

When writing an offer contract, be sure to pay attention to all of the details.

Offer Price:

Your agent should do a market analysis that pulls data on recently sold comparable houses. The best comparisons will come from the same neighborhood.

If you are asking for the seller to pay some of the closing costs, remember that this cost plus the sales commission determines the net amount you are offering the seller for the house.

Work with your agent on your negotiation strategy. There are many things to consider, such as how badly you want this particular house, whether it is a buyer’s or seller’s market and an assessment of the seller’s motivation to get the property sold.

There isn’t one best strategy.

Be sure to document in writing everything you want included with the house, such as appliances, etc. Your agent should guide you through the contract step-by-step.


  • Home inspection.
  • Mortgage.
  • Final walk through (24 hours prior to closing).

Proposed closing date. Typically, this is 30-45 days from an accepted offer.

A good-faith deposit is required for the offer. This is typically between 1-10% of the purchase price of the house. The deposit is kept in escrow until closing and the money is applied to the purchase price of the house at closing. If the house does not close due to one of the contingency clauses, the buyer receives their money back. However, if the buyer decides not to close on the property, the seller may get the deposit money.

Attach your pre-approval letter to the offer.


Two people in professional meeting

The clock starts ticking for everything documented in the contract, including mortgage application, inspections and closing date.


Woman advising other woman on mortgage application

You will need to decide which mortgage to select prior to the application.

Plan for the following potential fees:

  • Application fee (many banks and mortgage companies charge an application fee; however, there is not an application fee at Arthur State Bank).
  • Credit check.
  • Appraisal (may be paid at closing).
  • Loan origination fee (paid at closing).

Once you have approval for your loan, make sure you don’t change anything that will impact the status of your mortgage. Banks do a final check on credit and jobs just prior to closing, so now is not the time to change jobs or make another purchase on credit such as a car or furniture.


Home inspector going over findings with home owner

Depending on the size of the house, an inspection can cost on average between $300 to $1000.

Many real estate contracts specify how problems uncovered in the inspection will be resolved, up to a certain dollar amount. Should necessary repairs exceed that amount, the buyer has the option to cancel the contract without penalty and receive their deposit money back. Another option is for the buyer and seller to renegotiate who will pay for additional repairs.


Woman happily holding keys to her new home
  • Homeowner’s insurance is required by the lender prior to closing on the loan.
  • Turn on utilities in your name, effective the closing date.
  • Change your address with the U.S. Postal Service.
  • Make moving arrangements.

Three days prior to closing:

  • You should receive your final Closing Disclosure from the closing agency. The final Closing Disclosure shows a column for the seller and a column for the buyer. All closing charges and credits for both the seller and the buyer are documented in the closing statement.
  • Review the closing statement for accuracy prior to coming to closing.
  • The final amount in the buyer’s column shows you the amount of money you need to pay at closing.

The closing office will provide specific payment instructions. Closing funds have become recent targets for cybercriminals. If you are asked to use a wire transfer, call the office and ask to speak to someone you have been working with to double-check the instructions.

Closing day:

In South Carolina, the closing will usually take place at the attorney’s office. Everyone signing for the mortgage must be present to sign the closing paperwork. Make sure you bring the following:

  • Cashier’s check or proof of payment for wire transfer.
  • Driver’s license.
  • Checkbook, just in case there are any additional items that were not on the closing statement.

Be sure to understand this information:

  • How and when you will pay:
  • Your mortgage.
  • Your property taxes.
  • Your homeowner’s insurance.
  • Any HOA dues.
  • Who to call with any questions.

The best practice is to go through the homebuyer’s roadmap in this sequence. However, if you jumped ahead early in your journey, just circle back to address the steps you missed.

Arthur State Bank’s loan officers are closely tapped into local real estate markets and experts at helping clients get what they need on terms that work for them. We also offer mortgage specials for first-time homebuyers.

To start planning your journey to your dream home, try out our mortgage calculator. If you’re ready to talk to a loan officer, contact Arthur State Bank to request personalized mortgage information today. Don’t forget to ask about our first-time homebuyer offer.