This is intended for someone who has had little if any investment experience. At the end you'll be ready to invest. It's arranged in five Chapters or Lessons, each 10 - 15 minutes long, but if you're in a hurry now, just read this 2-minute Summary. A glossary of investment terms is here.

Recent Update: At the end of this red paragraph I'm softening the advice I've had here for the last several months of not making any new investments in stocks or the bonds discussed in these pages (longer-term bonds). That advice was based on my view that inflation, supply chain issues, China/Taiwan matters, war in Ukraine, political discord and climate policies have led to considerable uncertainty. Then, two recent articles (available here and here) have suggested that stock-market returns for the foreseeable future will be either flat or around 3% (less than half its historical average), and in this earlier article a famed investor is not recommending bonds at this time (an exception to this may be 2-year Treasury Bonds, with a yield of around 4%, which is greater than that of the 10-year and 30-year bonds). For long-term investments it then seemed prudent to sit tight for a bit until a clearer picture emerges, and real estate, dividend-rich stocks or bonds may then be a better choice when we weigh returns vs risk. Now, however, stock prices have dropped so much that some prudent investment in stocks should be considered, although I'm still hesitant about longer-term bonds.


Everyone needs to invest. Your money simply won’t grow enough in a savings account to keep up with inflation. Investing helps your money work for you, and allows you to earn more money than you can anywhere else. It can be one of the most essential ways to plan for your future. As you will see here, there are many ways you can go about it -- and it doesn't need to be intimidating.

The point of investing isn't to take risks, it's to reap the rewards from your risk (and those rewards can be huge, such as a simple strategy which would have turned $11,000 into $1 Million in the 17 years ending in 2004). But we won't be shooting for those types of returns. Instead we'll look at different investments which carry varying levels of risk (for instance stocks are riskier than bonds) so that you can tailor conservative investments that let you sleep soundly at night.

The simple approach to invest is to go to a financial advisor. I don't recommend this to start. Instead, I suggest you spend roughly an hour reading these Chapters and then decide whether you need an advisor. Why? For two reasons. First, they don't come cheap. Second, after you read these Chapters you can do as well or better than they can; for instance, in the the 10-year period ending in June 2019 only 8% of mutual funds that tried to beat the market were able to do better than the stock market recommendation in these Chapters.

But before you begin investing there are at least two things you should do:

Wait until you’re debt free – Don’t forgo paying bills so you can invest. Pay off all your credit cards and personal loans before you start investing. And develop the discipline to pay all your credit cards in full every month, so there is no interest.

Have An Emergency Fund – After you’ve paid off all credit cards and personal loans, build a budget, save up an emergency fund, and then start investing. A fund for the unexpected, not just unexpected expenses but an unexpected stop in your income. How much to put in this fund depends on several factors, including your living expenses and how dependable your income stream is. Go here to see where to put this money.

Below are a couple of other thoughts before you go on to the other chapters in this series.

If your employer offers a 401(k) retirement plan, you should put the maximum amount of your salary (typically 6%) that gets you the maximum contribution from your employer. And then choose to put that money as I recommend in the Stocks Chapter, namely in an S&P500 Index mutual fund.

If the investment is with funds that you already paid taxes on AND it's principally for retirement, consider putting part of your funds in a Roth IRA, which will allow you to withdraw the earnings tax free after you are 59 1/2 years of age (of course, the money you put in can also be withdrawn tax free since you already paid taxes on it).

There are dozens of guides for beginning investors. To me none seemed to give me the strait information I thought you should have. But in 2022, roughly three years after I first posted this, I found an article worth reading. It spends more time than mine on assessing your investment goals, and may give you an insight different from mine.

In each of the next chapters we'll cover some basic investment concepts for stocks, bonds and real estate2. Yes, real estate, because it can offer income similar to bonds and total returns comparable to stocks without the volatility (i.e., the ups and downs). The image below gives you a simplified look at the returns (gains) you can get from these different investments, presented here to encourage you to keep reading.

Please click on one of the buttons below to go to one of the other chapters on Investing.

1 I am NOT an investment professional -- I'm an aerospace engineer with a Master's from Caltech who drifted to the business side and spent the last half of my 30-year career dealing mostly with financial matters. After retiring I've spent the last 20+ years investing in stocks, bonds and real estate. Although this was first updated in October 2019, I've been reviewing it regularly and make changes/additions in RED when warranted. The views expressed here are mine and at times may depart from the norm. In preparing this article I first read several articles, and ideas or phrases from those articles may have unintentionally crept into mine; I am happy to remove any plagiarism if alerted.

2 I don’t cover commodities and other types of investments because I don't know enough about them and I don’t recommend them for beginners.