How to invest? There is a multi-billion industry that addresses this question. Armies of experts who are willing to sell their expertise to those who don’t know how. The bottom line is this. You want to buy low so that in 20, maybe 30 years you are able to sell at a much higher price. It’s that simple. It’s the in-between that low price and the high price that is the most difficult piece of the puzzle. Part of the difficulty of the in-between is not listening to the naysayers, the so-called experts and of course, your brother who happens to know some guy who’s in on the next hot stock.

Know thy self

What type person are you? Are you an emotional person or a logical one? If the market corrects, will you be one of the many investors who buy high and sell low. Or, will be one the very few who will keep to his or her plan and keep their eyes on the prize.

Have a plan to invest easily and simply

If you have a plan where you “Hope for the best but plan for the worse”, you’ll be miles ahead of the average investor. You see, most people don’t plan, don’t budget and usually get hurt. What I mean by this, is that people don’t use an allocation of money when it comes to investing. An opportunity arises and they just put all of their money into it. What they should do is allocate almost 5 or 10% of their money on any one investment. By having a plan, you are obviously hoping for the best but if something the markets corrects itself, you have expected and plan accordingly.

Start small

So many people start out with putting all their money in one stock. If it goes well, great. But what happens if you’re not so lucky. A great strategy is to take a small allocation of your money and commit. This allows you to keep some of your cash so that as you can experience and confidence, you’ll have the money to invest later on. An example, let’s say you have $1000 to invest. Invest $100. Now I know you’re saying $100. doesn’t buy much! You’re right. This brings me to my next point. Start simple.

Start simply

Instead of trying to buy the next Amazon AMZN , maybe buy an ETF that covers the whole S&P 500 SPY  At the time writing, it trades at $265.35. Imagine buying a little piece of each of the 500 largest trading companies in the US. I would to suggest that this is definitely an easy, simple and basic way to start investing. This isn’t, of course, an investment recommendation but an example of how easy it is to start investing. Look at any number of discount brokerages for low price commissions.

Aim High

Once you start small, you can become more complex in your investments. It all depends on you. I prefer to buy the whole market instead trying to choose the next hot stock. That’s just me. Because you didn’t invest all your money, you’ll have money left over so that when you’ve gained experience and confidence you’ll be able to invest. Therfore, this process has a snowballing effect. More experience you get, the more you make and the more successful you’ll become.

Have fun while investing easily and simply

Of course, while doing this you need to have fun. By making it simple and having good money management strategy, you’ll be in the market longer, having a fun time without having all the pressure of risking needlessly all your money.

Let’s summarize

• Know your temperament. (Emotional or logical)
• Have a plan. (It’s ok to hope for the best but be sure to plan for the worst
• Start small (Remember baby steps!!!)
• Start simply (Don’t make it rocket science)
• Aim high (Remember, you’re in it for long haul, invest more money periodically)
• Have fun (if you’re not having fun, you’re not doing it right!)

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Rich Simply