Know what are index funds

Now that you know what stocks and bonds are, you may think that the next step is to choose companies to invest in (picking stocks). But this is not the case! Investing in individual stocks is not a good thing for most people.
Historically, picking stocks had lower returns than the average market itself. Picking stocks is called active investing because people actively choose which companies to invest in. On the other hand, with passive investing, you invest in a collection of stocks representing the market. These collections of stocks are called index.
An index fund is a fund that contains all the shares of the index. Instead of buying shares of the stocks, you purchase shares of the index. And by doing so, you do the equivalent of buying shares of every stock in the index. If the market does well, your shares will do well.
There are many advantages of passive investing:

1. It outperforms active funds on average.
2. It is simpler since you do not have to pick stocks.
3. It is cheaper since fees on index funds are generally lower than on active funds.
4. It has a greater diversification.

Therefore, I would recommend that if you are getting started, you start with passive investing!