Before we begin, this is absolutely not investment advice and I am certainly not a financial professional. Please understand this is entirely for informational purposes only and in no way are we making any claims about this style of investing. Use your head people, this is a blog, not a financial consultation.
So you want to be an investor?
First, you need to attain a savings rate. Without a savings rate, or positive margin above spending, you will lack the most sufficient tool required for investing, spare change.
Yes, I know many of you will protest and say but you could use OPM (other people's money) or perform marginal trading, etc.
For those of you that might say that, please do not continue reading the blog. We are not firm believers in gut-wrenching borrowing on margins or owing money to anyone. We are the type that pays off the full credit card bill - or at least the full statement balance - every month! That's what brings us security.
Deciding where to save it
Once you've broken free from spending every single dollar you earn, you have some choices.
Where do you want to put all these newfound savings (hopefully they need a dumptruck to transport it)...
Here are some of the primary investment vehicles where you can save your money and have access to investing in "the market" (not supposed to be an exhaustive list, just the most common):
I just happen to use Fidelity and Vanguard because I have found they offer the lowest account fees and best customer support around. I have tried MANY other investment companies for various accounts without much success. They will remain nameless.
To open an account in order to begin investing, just visit the company site or call the company directly, and seek advisement for how to open any of the following accounts - or even ask about one's I haven't listed such as a 457 plan, etc.
I do not use a financial professional and choose to pick the funds myself. I do this for the lowest possible cost and the greatest potential return. Read the two books below if you think that you cannot do it yourself when it comes to investing.
How to invest it once you've saved it...
The simplest way is low cost index funds.
If you need more confidence in investing in index funds but are concerned about stock volatility, here are two must-read books for you:
How do you do it?
Sometimes it depends on what platform you are using.
From looking around the community, if you choose Vanguard, folk's love their VTSAX (Vanguard Total Stock Market Index Fund) fund as an example of a low cost index fund that tracks the total returns of the stock market.
For those Fidelity users, FXAIX seeks to match the performance of the S&P 500.
In the end, it does not matter what platform you use. I primarily use Fidelity and Vanguard due to the low cost nature of their funds, and their accounts.
When considering index fund investing, here is primarily what you are looking for:
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Dr. Jon is a physical therapist by day, and a dedicated frugalist by night, deeply enthralled in the thrill of "pinching pennies" and investing the margin.