Should everyone invest?

[Jarreddo]

Hey there, I'm a lower-class young guy, no really wealthy people in my background, never had much money saved, etc. I'm working on increasing my income and making sure to spend less than I make, but then I have to figure out what to do with the extra money.

Now, I don't know anything about investing, I don't know nor care about the business world, and I don't have much time to waste. Is it still a good idea to find some way to invest my money? Something that doesn't require attention or knowledge? Basically, is it always a good idea to invest, or is it a zero-sum game where for every winner, there's a loser? I really don't know how this business thing works, but I know that doing it irresponsibly can lose you money, or lead to bubbles that pop eventually.

So mostly, what I want to know is, if everyone invested their savings, would it be sustainable and good for the world? And if so, where can I find a simple guide for beginners?

[RT Wolf]

how old are you? There's a million and one ways to invest. I prefer value investing in stocks, which is about treating stocks like pieces of companies. Look up Warren Buffett and Peter Lynch for this sort of investing. You can read The Intelligent Investor for this type of investing, and just google around for it.

Depending on your age, your asset allocation is best when it is different. If you're looking to invest in th stock market, you have to have a 5-10 year minimum time horizon (IE need hte money in more than 5-10 years) and I recommend you invest using index funds unless you know what you're doing. Don't invest in mutual funds or your own stocks unless you know what you're doing. I suggest investing in th stock market now cause it's cheaper and keep investing.

If you're older and need the money sooner, less risk investments like bonds are a better idea.

The real key to investing is: get started (early if possible) and be regular at it. You get those two things right, you're much much more likely to be better off.

In a sense it's a zero-sum game and in another sense it isn't. The pie keeps getting bigger.

Whether you shoudl invest or not, I do think you should know the basics about investing so you can make an informed decision for yourself. Definitely learn about the magical powre of compound interest. Pick up a decent book on financial planning. Maybe "It Pays to Talk" or The Automatic Millionaire or The Wealthy Barber. Something that givse you a broad overview of the options. Keep these things in mind though: in stocks, index fund investing beats most other strategies hands down and not to invest in anything but index funds without doing your research.

[Brutha]

Is it still a good idea to find some way to invest my money?

If you don't want to take risk you can invest into Treasury bills and still get a bit of return.

And if so, where can I find a simple guide for beginners?

There no such thing. washingtonpost.com summaries the lack of knowledge very well.

[wellbeing]

Let's start with your more gobal question: "If everyone invested...." In the Western banking system, most everyone who has their savings deposited with a bank already invests. They've just turned over the responsiblity for those investment decisions to the bank.

You asked if this is "sustainable and good for the world." Those are value judgements and everyone (including professional investors) has different meanings for those terms.

My point is you're probably already investing and you're wondering how (and if it's "worth it") to align those investments more with your needs (in all senses of the word). To that question, I would say that you need to educate yourself.

Once you've learned the fundamentals of investMENT (as opposed to investING), you'll be able to determine what your goals are, what your tolerances are and which types of vehicles best addresses those items. You'll be able to discuss things like "asset allocation" (even if someone else performs this on your behalf, understand concepts like "real," "nominal," and "relative" rates of return. By grasping the magic of "compounding," you'll understand why RT Wolf advises you to "get started" as well as recognise "bubbles" as they form. Other topics of basic financial math will help you decide when it's better to buy vs. rent, lease vs. own or help you identify some of the warning signs of a bad deal or advisor.

If you're located in the U.S., I'd suggest "The Only Investment Guide You'll Ever Need." (it isn't but it does a great job of explaining the basics and mechanics of the investment.) It's an engaging read and pretty thorough. However, it does not tell how to invest. I also like the various books in the "Rich Dad" series for their clear-cut mesages and how they teach the reader to think about financial issues. In fact, as I read your original post, I immediately thought of the first book in the series--"Rich Dad, Poor Dad"--as being particularly appropriate for how you've described your situation.

Once you get a little knowledge under your belt, you'll not only be better prepared to think effectively about the financial decisions which Life will to you, but you can better decide how much and what kind of enegy you want to invest in your investment strategies.

I believe this is a great timme to be giving yourself this education. In dynamic environments such as our current one, a prepared investor can identify opportunities (and swindes) as they appear that unprepared people are too panicked (or otherwise) to see.

Hope this helps.

[Bloggeries]

DO NOT BUY TREASURY BILLS!!!!!!!

Treasury Bubble One For the Ages

Warren Buffet Warns Americans of Onslaught of Inflation

Inflation is HORRIBLE for treasury bills. Unless you got SERIOUS savings aside don't bother with markets. The market is NUTSO right now. If you do feel the need to get in I'd wait until the dow is around 6000 or so and even then do your homework.

When this market rebounds there will be some serious gains but remember; when you buy a stock consider the money GONE. Don't bank on it. How many people were "banking" on their investments that are now worth ... 50-90% less? If you had bought Citi Bank, Bank of America and many more you'd be destroyed now. So be careful

Look for solid stocks stlil earning money with dividends.

Seriously though if your still young just keep saving and look for a business you can run that is for sale or you can start. You can earn way more in a business and have control over your destiny. Also with the company you can legitimately write off some expenses you incur in pre tax income. (Whatever is needed to run the business).

Realistically if you don't have any debt you are already very rich compared to your average american so don't worry and remember; it's way easier to lose money then earn money

Many people are "Show Rich" and put off that impression but if you saw their actual networth you'd have a heart attack.

Good luck man!