This is a brief/summary version of the Chapters/Lessons in this series. Each of those is only 10 - 15 minutes long, but this 2-minute page is for those who are short on time.

Recent Update: In 2022 I had a paragraph here in red suggesting that we pause from making any new investments in stocks or longer-term bonds for several reasons². The environment has since changed and some prudent investment in stocks and long-term bonds should be considered.

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 tailor conservative investments that let you sleep soundly at night. 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.

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 of about 9%³. Here 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, my recommendation for investment in stocks is super-easy to implement: invest in an S&P 500 index mutual fund, which invests in the 500 largest U.S. companies. Over the long term such an investment has always delivered higher returns than CDs, with no losses and a tax advantage⁴, plus in 90% of the cases it beats the return of investments picked by experts⁵. Then stay the course, don't try to time the market or sell when “experts” are looking at adverse financial clouds in the horizon and forecasting a downturn.

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 it can offer income similar to bonds and total returns comparable to stocks without the volatility (i.e., the ups and downs).

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 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 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 The 2022 advice to pause from making any new investments in stocks or longer-term bonds was based on my view that Covid, inflation, supply chain issues, China/Taiwan matters, war in Ukraine, political discord and climate policies had led to considerable uncertainty. Then, two articles (available here and here) had 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 was recommending against bonds (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 emerged, and real estate or dividend-rich stocks seemed to be a better choice when we weigh returns vs risk.

³ The single mutual fund investment I recommend has had an average annual return of 9.7% over the past 30 years and 6.1% over the past 20 years to 2019, and 12.15% over the past 10 years to 2023.

⁴ 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.

⁵ 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).