Investing is Easier Than You Think
According to Warren Buffet, if you invest in a very low-cost index fund over time, you'll do better than 90% of people who start investing at the same time. To start, Buffet advises to put 10% of the cash in short-term government bonds, and 90% in a very low-cost S&P 500 index fund.
The money you want to invest outside of your retirement accounts:
- Learn some basic investing terminology.
- Open a brokerage account.
- Pick an index fund.
- Buy the fund through your brokerage account.
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Low-Cost Index Fund
For the average investor, Warren Buffet advocates for index funds.
- Put 10 % of the cash in short-term government bonds.
- Put 90 % in a very low-cost S&P 500 index fund.
Smart retirement planning boils down to a few simple truths.
- Time is on your side. The earlier you start saving money, the more time you give compounding to work for you.
- Take risks when you're young. Although stocks are three times more volatile than government bonds, it earns nearly twice the average annual return.
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