As indicated in Chapter 1, this is a brief/summary version of the Chapters/Lessons in this series, which are intended principally for someone who has had little if any investment experience. Each of those is only 10 - 15 minutes long, but this "3-minute page" is for those who are short on time. Start by reading the bullets on the image at right. -- it'll tell you where we're going and give you an instant summary of what's in here.

Who should invest? How? When? Everyone should invest. Your money simply won’t grow enough in a savings account to keep up with inflation. Investing allows you to earn more money, even twice as much as you can get from the best Certificate of Deposit (CDs). But to invest you first need to have funds, so those starting their career need to save, to spend less than they earn. Investing can be easy, not intimidating. And it can be tailored to be essentially risk-free, allowing you to choose conservative investments that let you sleep soundly at night. Also, I don't recommend that you start by going to a financial advisor; instead, I suggest you later spend roughly an hour reading these Chapters and then decide whether you need an advisor. Why? Because they don't come cheap and you'll soon learn that you can do as well or better than they can. But don't start investing until you've paid off all your credit cards and personal loans, and put away an emergency fund (go here to see where to put this emergency fund).

Stocks are the first thing we'll look at. Because if held for the long term (5 - 10 years) they perform better than most other investments, with a historical average annual return of about 9 - 10% and over 15% annually from 2015 to October 2025, the stock investment suggested here is the first and perhaps ONLY investment a beginner should make. With stocks you're buying partial ownership of one or more companies, and your gains come from the increase in the value of the stocks (appreciation) as the companies grow but also because many established companies pay dividends to shareholders.

As you'll see in the "Stocks" Chapter/Lesson, my stocks recommendation for the average investor is super-easy to implement: invest all of the money you've decided to put in stocks in two different S&P 500 index mutual funds, half in a conventional/traditional S&P 500 index mutual fund and half in an EQUAL-WEIGHT S&P 500 index mutual fund². In that Chapter/Lesson 2 I also mention other alternatives for investors that are more conservative or more aggressive or want more dividends, not as a substitute for the two S&P 500 index mutual funds but places where you can put part of your money. Over the long term these two index funds have always delivered higher returns than CDs, with no losses and a tax advantage³, plus in 90% of the cases it beats the return of investments picked by experts⁴. It's critical that you then stay the course -- and NOT try to time the market or sell when “experts” are forecasting adverse financial clouds, because that generally leads to very poor performance⁵.

Bonds come next. This is where you become a lender and the borrower pays you interest far higher than what you get at a bank. We'll cover the different types of bonds (corporate, government, tax-free municipal).

Real estate is the last investment we'll cover. Real estate? Yes, because, although it typically requires more funds and it's less liquid (you can't get your money out fast), it can offer income similar to bonds and total returns comparable or superior to stocks without the volatility (i.e., the ups and downs). In fact, as you can read here, "the most comprehensive analysis of investment returns ever conducted found that residential real estate delivered superior.....returns compared to stocks, with significantly lower volatility".

Other Investments. I don’t cover gold/silver, bitcoin, commodities and other types of investments because I don't know enough about them and I don’t recommend them for beginners. And I strongly urge you to STAY AWAY from get-rich schemes suggested by some -- stick to the investments covered here.

Finally, in a Chapter/Lesson that I call "Go Invest", we put all of these concepts together to help you decide what to do, even help you find and assess real estate properties to buy.

When you have more time I encourage you to read all the Chapters/Lessons in this series. Start with the introductory Chapter/Lesson 1, then go to one of the other chapters by clicking on one of the buttons below. As a further inducement to keep reading, the image below gives you a simplified/approximate look at the returns (gains) you can get from these different investments.

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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 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 A stock mutual fund pools the money from investors and buys the stock of MANY companies, so your money is spread among dozens to hundreds of companies, thereby reducing risk. This achieves one of the principal foundations of investing: diversification. If you have a limited amount of money, why would you buy one stock, or only several? It’s like putting all your eggs in one basket. If that company sputters, you might lose a lot of money. The two S&P 500 index mutual funds suggested here differ only in how the money is apportioned among the component companies. Both funds invest in the same 500 largest U.S. companies. In the traditional, better-known fund, money is apportioned based on company size ("capitalization"), so if Apple gets $100, the 500th company might get $1.25; such a fund is "market-cap-weighted" (I like Fidelity's FXAIX). In the lesser-known fund the same amount of money goes to each of the 500 companies; such a fund is "equal-weighted" (I like Invesco's RSP). The equal weighting eliminates the distortion of the tech-heavy mega companies and significantly increases the weighting of industrial, financial, healthcare, and consumer discretionary companies, leading to lower volatility. More on these two funds and a graph comparing their performance here.

³ The tax advantage comes from not having to pay taxes on the gains until you finally take the money out. On CDs, you pay taxes on the gains each time a CD matures and you redeem it, so, if you set money aside from the proceeds to pay the tax, the amount that you can re-invest in another CD is NOT the whole gain from the CD you just redeemed but the after-tax amount. In a long-term investment in an S&P 500 index mutual fund, you pay taxes only when you finally take the money out, in 10, 20 or 30 years, so the whole gain from each year remains invested -- and gaining -- thereafter.

⁴ Over the 10-year period ending in June 2019 92% of stock mutual funds managed by experts did worse than the S&P 500 index stock market recommendation in these Chapters. In 2007 Warren Buffett, the 90-year-old Chairman and CEO of Berkshire Hathaway considered to be the most successful investor in history, waged a million dollars that over a 10-year period his choice of the S&P 500 index would beat the performance of top hedge funds typically seen as exclusive options for the ultra-rich -- he won handily (details here).

⁵ An analysis done from 1930 to 2021 showed that a person just missing the 10 best market days of each decade resulted in a total return (not annual) of 28% for the 91-year period, versus a return of 17,715% if the person had stayed invested (more here). And it's one reason for the catchy phrase "time in the market beats timing the market".