4 no-brainer money moves beginner investors should consider in 2024

The stock market closed 2023 on a high note, with the tech-heavy Nasdaq climbing over 44% and the Dow Jones Industrial Average (DJIA) up nearly 14%. The S&P 500, widely considered the best single gauge of U.S. large-cap equities, rose over 24%. Easing inflation, a resilient US economy and the possibility of falling interest rates helped lift the stock market to near record highs in 2023.

As 2024 gets going, here are four no-brainer money moves beginner investors should consider.

1. Build an emergency fund

Experts expect the Federal Reserve to begin slashing interest rates sometime in 2024. And while this will make variable interest rates debts a little more affordable, it’ll also bring down savings rates. Until rates start falling, investors should prioritize building or rebuilding their emergency savings for when life throws those inevitable curveballs.

The average interest rate on savings accounts nationally is a measly 0.47% as of January 16, 2024, so you’ll want to consider keeping your emergency cash in a high-yield savings account — many of which currently pay over 4% annual percentage yield (APY) — or another account that pays interest but preserves liquidity. Other options include money market accounts and Treasury Bills (T-Bills). As of January 29, 2024, twenty-six-week T-Bills still pay over 5% yield, and you can lock in this rate for the bill’s duration.

2. Leverage new account and account transfer bonuses

Many brokers offer cash and stock incentives to attract new customers, and beginner investors shouldn’t decide on a broker until they’ve compared the best brokerage account bonuses. Depending on the broker and the amount you deposit, you could earn up to several thousand dollars in bonuses as a new customer.

While you should consider other factors such as fees, investment options and tools and resources when choosing a broker, a signup bonus could be a deciding factor if you’re torn between one or more platforms.

Alternatively, since you aren’t limited to opening just one brokerage account with a single broker, there’s no reason you can’t take advantage of multiple signup bonuses.

3. Maximize retirement contributions

The IRS lifted the maximum contribution limits for 401(k)s to $23,000 and $7,000 for IRAs. While 401(k)s are only available through an employer, anyone with earned income can contribute to an IRA.

Investors focusing on retirement savings should first consider saving enough in their 401(k) to get any available employer-matching contributions. This is free money you should prioritize before turning to fund your IRA.

IRAs are essential investment accounts for individuals looking for a flexible, tax-advantaged way to save for retirement. While 401(k) contribution limits are higher, IRAs are more flexible in terms of available investment options, meaning you can invest in more than mutual funds, which are the staple investment options for most 401(k)s.

Traditional IRA contributions are typically tax-deductible in the year you make them, while Roth IRA withdrawals are tax-free in retirement. But beyond the tax advantages of these accounts, at least two popular US brokers have introduced IRA matches, a feature that has long been reserved for workplace retirement plans.

Robinhood pays a 3% match on annual contributions with Robinhood Gold — its subscription service with perks like the increased IRA match, a higher APY on uninvested cash and third-party analyst research — and 1% without. It also pays 1% on all IRA transfers and 401(k) rollovers.

If you haven’t maxed out an IRA for 2023, you have until April 15, 2024, to open and fund an account and get any potential matching contributions for the previous year. IRA contributions for 2024 are already underway. ​​4/15/24

4. Just start investing

Whether you’re trying to time the market or don’t know how to get started, waiting on the sidelines and not investing can have detrimental effects on your money’s potential growth.

Asset management firm Hartford Funds shows that missing just the market’s 10 best days between 1993 and 2022 would result in an overall return of more than 50% less than someone who stayed fully invested during that time. Someone who stayed fully invested in the S&P 500 during that period would have returned $158,434 and missing the 10 best days would have returned $72,584. Missing the 20 best days would have returned $42,601, nearly 75% less than someone who stayed fully invested during that time. And since you don’t know when the market’s best days will be, investing and staying invested is key.

Beginner investors can easily get started investing by building a portfolio with S&P 500 index funds like the Vanguard 500 Index Fund ETF (VOO) or the SPDR S&P 500 ETF Trust (SPY). It’s an effortless way to invest and gives you broad market exposure through a single purchase.

Bottom line

With interest rates still elevated, don’t miss the opportunity to earn a competitive interest rate on your savings. New account bonuses can be a great way to kickstart a portfolio, but remember to maximize your retirement contributions to take full advantage of Uncle Sam’s tax benefits.

Importantly, start investing for the best shot at growing your wealth. The best brokerage accounts for beginners offer the account types and resources you need to put your money to work in 2024.

Matt Miczulski is an investments editor at Finder. Matt dissects and reviews brokers and investing platforms to expose perks and pain points, explores investment products and concepts and covers market news, making investing more accessible and helping readers to make informed financial decisions.

Before joining Finder in 2021, Matt covered everything from finance news and banking to debt and travel for FinanceBuzz. His expertise and analysis on investing and other financial topics has been featured on CBS, MSN, Best Company and Consolidated Credit, among others. Matt holds a BA in history from William Paterson University.

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Written by

Matt Miczulski

Editor, Investments

Matt Miczulski is an investments editor at Finder. With over 450 bylines, Matt dissects and reviews brokers and investing platforms to expose perks and pain points, explores investment products and concepts and covers market news, making investing more accessible and helping readers to make informed financial decisions. Before joining Finder in 2021, Matt covered everything from finance news and banking to debt and travel for FinanceBuzz. His expertise and analysis on investing and other financial topics has been featured on CBS, MSN, Best Company and Consolidated Credit, among others. Matt holds a BA in history from William Paterson University. See full bio

Matt's expertise

Matt has written 208 Finder guides across topics including:

• Trading and investing
• Broker and trading platform reviews
• Money management