
Investing Your First Dollar - skhatri11
http://blog.instavest.com/investing-your-first-dollar
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aesthetics1
I feel like this is terrible advice. If you have $10,000, there are safer ways
to invest it. If you are using a short blog post to plan your retirement and
ultimately your future, you are in trouble!

Check out mutual funds (managed) and index funds. Get your feet wet slowly in
something with a low risk. Don't jump into the stock market and just choose
companies you like across different industries. This is a recipe for disaster.

Get started by _learning_ about the market instead of throwing money at it.
Don't invest until you know who you're giving your money to, and what
expectations you should have.

Some beginner sites that helped me out:

[http://www.mrmoneymustache.com/2011/05/18/how-to-make-
money-...](http://www.mrmoneymustache.com/2011/05/18/how-to-make-money-in-the-
stock-market/)

[http://www.mrmoneymustache.com/2011/06/07/where-should-i-
inv...](http://www.mrmoneymustache.com/2011/06/07/where-should-i-invest-my-
short-term-stash/)

[http://www.reddit.com/r/personalfinance](http://www.reddit.com/r/personalfinance)

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boomshucka
This is, categorically, not "terrible advice". There might be better things to
do, sure. The author is clearly suggesting that it's just a starting point.
He/she is clearly not stating that this is a plan for life, or a plan for a
large amount of money, or anything of the sort.

For many people, just getting started is a huge barrier. Index fund? What is
that? Mutual fund? What is that? Buying a dozen stocks in some companies
you've heard of can at least get you interested. You've got skin in the game.
Now you are motivated to learn. The idea that you have to learn a whole load
about it first just doesn't make sense. People are busy, it's tough to get the
motivation to learn. Skin in the game is a great way to start.

~~~
arielweisberg
It is definitely terrible advice. It sets people up for a long investing
career full of behavioral errors and vain attempts to beat legions of people
and machines better than you at actively trading.

~~~
boomshucka
No, it just gets them started. There is no mention in the piece about this
being the way to invest for the long-term, so no one is getting "set" on
anything. It doesn't suggest you can "beat the market" or appeal to anyone's
vanity.

I believe you are underestimating the perceived complexity in investing by
people who don't understand it at all. I also believe you are underestimating
the amount of diversification that a dozen stocks chosen from different
industries can provide. It's better to start sub-optimally than not start at
all.

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arielweisberg
My first reaction is to flag and leave a snarky comment. Instead I'm going to
comment and upvote.

This is terrible advice on investing and not a starting point. Hold cash? Wait
for the right time? Give me a break. And then they recommend you invest with
them!

I recommend The Four Pillars of Investing by William Bernstein.

[http://www.amazon.com/The-Four-Pillars-Investing-
Portfolio/d...](http://www.amazon.com/The-Four-Pillars-Investing-
Portfolio/dp/0071747052)

At least he isn't trying to sell you anything besides the book.

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zallarak
Investing isn't easy - that's why I think its good to start earlier and learn
quickly. This way, when you have a larger capital base, you've learned some
lessons and hopefully conquered some behavioral pitfalls.

