Investing can be very complex, but fortunately, it does not have to be. In fact, by sticking to some very basic principles, you can invest your savings and see them grow over a long time period.


Generally speaking, there are a few types of options for investing. The main ones are stocks, and bonds. Stocks represent ownership in a business, and bonds represent money you lend to a business or government in exchange for regular interest payments.
Most investors have a combination of debt and equity in their portfolios.
 Mutual funds and ETFs are similar in that each is a collection of many stocks or bonds. They provide a way to diversify your portfolio to an extent that would be impossible if you were only investing in stocks one at a time. There are some significant differences between Mutual funds and ETFs, so research both before deciding where to invest your money.


ETFs offer greater flexibility and lower expense ratios compared to mutual funds.ETFs are more tax efficient, but they see fewer capital gains than mutual funds.ETFs trade like regular stocks and their value fluctuates throughout the day. The value of a mutual fund is calculated only once a day, using the closing market prices of the securities in the fund's portfolio.Mutual funds are managed while most ETFs are not. The holdings of a mutual fund are selected by a fund manager who seeks to make the fund as profitable as possible. The manager actively monitors the market and revises the fund's assets accordingly.
 Decide if you want to use an online broker or a full service broker. A full service broker has the time and knowledge to make your investment work for you; however, they can also charge a substantial fee. If you feel you understand the market fairly well and want to manage your own portfolio, then you may wish to sign up with an online broker, such as TD Ameritrade, Capital One, Scottrade, E*Trade and Charles Schwab.


Always be mindful of fees before opening accounts, as well as account minimums. Brokers all charge fees per trade (ranging from $4.95 to $10 generally), and many also require a minimum initial investment (ranging from $500 to much higher).
Currently, online brokers that have no minimum initial investment include Capital One Investing, TD Ameritrade, First Trade, TradeKing, and OptionsHouse.If you want more help with your investing, there are a variety of ways to find financial advice: if you want someone who helps you in a non-sales environment, you can find an advisor in your area at one of the following sites: letsmakeaplan.org, www.napfa.org, garrettplanningnetwork.com. You can also go to your local bank or financial institution; however, many of these charge higher fees and require a large minimum to invest ($500,000 to $1,000,000 is common).
Some advisors, (like a CERTIFIED FINANCIAL PLANNER™) have the ability to give advice in a number of areas, like investments, taxes and retirement planning, while others can only take direction but not give advice, Also important to know is that not all people who work at financial institutions are bound to a fiduciary duty of putting their client's interest first. Before starting to work with someone, ask about their training and expertise, to make sure they are the right fit for you.
 Instead of investing a large amount of money and hoping the timing works out, you can invest over time, lessening the risk of investing. This is known as dollar cost averaging (DCA).To do this, make a schedule (like once a month) to spend a fixed amount buying shares. When the price of the shares is low, you will purchase more shares; when the price is high, you will purchase fewer shares, all for the same amount of money each month.Let's say you commit to investing $100 in company X once a month. This month, the shares cost $10 each, so you will buy ten shares (for $100). Next month, the shares cost $20, so you buy five shares (for $100), an so on.
Always stay invested regardless of what happens to the market. There have been 11 market crashes since 1956, but every time the market has recovered to earn far more than it lost. Simply continue adding each and every month, and be comfortable with the fact that your wealth will grow over time.
 The real secret to wealth is to start investing early. Doing this will allow your wealth to "compound" over time. Compounding means that your initial amount will earn interest, then the next year, interest will be earned on your original amount plus the added interest.For example, if you invest $100 and it earns 5% in a year, you would have $105. The next year, you would earn 5% on $105. This means you would would have $110.25. The next year, you would earn 5% on 110.25, and so on.
The results over time are incredible. If you invested $1,000 a month starting 30 years ago, you would have $1.8 million today. This is the surest way to create wealth.
Learn more here.
Understand the basics of investing.
Learn about mutual funds and exchange traded funds (ETFs).
Choose a broker.
Add to your investments regularly.
Start investing as soon as possible.
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