So you're vowing to start investing in 2021? That's wonderful -- and something that most of us need to be doing, since generous retirement pensions are becoming a thing of the past.

The simplest way to start investing is to open a brokerage account at a good brokerage, send in some money, and then invest with it -- perhaps in a traditional or Roth IRA. (You might also start via a 401(k) account at your company.) But it's really not quite as simple as that. Here are five things to do that can have you investing effectively -- and quickly.

A finger is about to press a button labeled invest start.

Image source: Getty Images.

1. Start with an index fund

Here's the simplest way to invest in stocks for the long term: A low-fee, broad-market index fund. Index funds are mutual funds (or exchange-traded funds, ETFs) that track indexes of securities. An S&P 500 index fund is the most common example -- it simply owns roughly all of the stocks in the S&P 500 index of roughly 500 of America's leading companies. Thus, it aims to deliver roughly the same return as the index -- which, over the long run, has been enough to outperform most actively managed stock mutual funds. Indeed, as of mid-2020, the S&P 500 outperformed fully 87% of large-cap stock mutual funds over the previous 15 years.

There are plenty of S&P 500 index funds out there, such as the Vanguard 500 Index Admiral Fund (VFIAX) and the Fidelity 500 Index Fund (FXAIX). Among ETFs, there's the SPDR S&P 500 ETF (SPY) and the Vanguard S&P 500 ETF (VOO) -- and others.

2. Save more money to invest

Next, amp up your investing by investing more. Do a little calculating to see how much you should be investing regularly in order to achieve however much money you need to retire with. The following table will show you what's possible:

Growing at 8% for

$5,000 invested annually

$10,000 invested annually

$15,000 invested annually

10 years




15 years




20 years




25 years



$1.2 million

30 years


$1.2 million

$1.8 million

Source: Calculations by author.

In order to save more for investing, see which expenses you can cut back on. Are you subscribed to more streaming services than you really need and use? Is your gym membership something you would cancel? Could you cut your own grass and save several hundred dollars a year? Might you turn the thermostat down a bit throughout the winter, to save on heating costs? Perhaps pick up your food orders from restaurants instead of having them delivered? You might be able to generate a significant sum by selling items cluttering up your attic, basement, or garage -- or donate them to charity, for a tax deduction. There are lots of ways to spend less.

3. Earn more money to invest

Another powerful strategy for having more money to invest is to earn more. You could start by asking for a raise at work -- that's a successful gambit more often than you might think. If that doesn't work, consider looking for higher-paying positions. Or take on some work on the side. There are countless possibilities -- such as tutoring kids online, making and selling crafts (online or at local markets), and freelance writing or editing. You might also drive for a ride-sharing service, or perhaps rent out space in your home (or your whole home) now and then via a service such as Airbnb.

4. Stick with your plan

If you want to succeed -- which means ending up with a sum that helps support a comfortable retirement -- you'll need to not only tackle some or all of the steps above, but you'll also need to stick with it. Determination is critical. It's easy to let these new good habits slide -- but that can put your future financial security in jeopardy. So do whatever it takes to keep your eyes on the prize. You might automate some or much of your investing, having sums automatically sent to your investment accounts from your paycheck or bank account, for example. You might also set up reminders in your calendar to send in investment checks and to occasionally review your progress.

5. Keep learning

Finally, keep learning -- because that's likely to make you a better, more successful investor, and one with the motivation to keep going. You can access lots of new articles at each day, and there are plenty of good books that can increase your stock market savviness. As you get more savvy, you might want to branch out into investing in some individual stocks, along with index funds. They have the potential to grow even faster, though it will take more work than simply parking dollars in an index fund.

The power to vastly improve your future financial security is in your hands -- don't put off taking action. The start of a new year is a fine time to begin.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.