Simple Steps to Successful Investing

B y w w w. P r o f i t a b l e I n ve s t i n g Ti p s . c o m
SIMPLE STEPS TO
SUCCESSFUL INVESTING

http://profitableinvestingtips.com/bond-investing/simple-steps-to-successful-investing
There are many times in life when the
“KISS” approach is the best.

(KISS = keep it simple, stupid!) Successful
investing is one of them.

The vast majority of investors have a
“day job.”

That is to say, they work at something
other than managing their investment
portfolio.

That means that most of us need to
follow a few simple steps to
successful investing.

Simple Steps to Successful
Investing

•Take advantage of 401K’s, IRAs, and
other tax deferred investment
vehicles
•Invest in your home
•Pay off credit card debt before any
other significant investing
•Keep your investment vehicles
simple

IRA’s and 401 K’s

An IRA is an account that you create
with a financial institution such as a
bank or stock broker.

It gives you a way to save with the growth
of you investment being tax free or tax
deferred.

Issues such as whether you use
a traditional IRA or a Roth IRA are
important but the most important part
is to have your investments increase
in value with being taxed until you
cash out.

A 401 K is similar to an IRA but it is
sponsored by your employer.

A common benefit is that your employer
matches your contribution each year.

Your money grows without being
taxed over the years and is only taxed
when you withdraw it during
retirement when you income is less
and your tax bracket is lower.

Buy Your Home instead of
Renting

Interest on your home mortgage is
deductible on your income tax.

This law is meant to promote home
ownership and economic stability.

Simple steps to successful investing
include owning your own home.

Pay Off Credit Card Debt

In our article featuring tips on how to
start investing we mention paying off
credit card debt.

Before you start putting money into
stocks you need to pay off your credit
cards because the interest you pay on
those is more than a beginner can
expect to make on his money in the
market.

In fact, the interest paid on credit card
debt is greater than many
professional investors can reliably
make year after year.

The first simple step to successful
investing is to pay of the credit cards.

The Minimalist Approach to
Successful Investing

One of the simple steps to successful
investing is to take a minimalist
approach as suggested in an article
by CNBC.

Life is complicated enough. The
number of investment choices in a
typical 401(k) plan – about 25,
according to a recent report from the
Investment Company Institute – is
proof.

If you have a current 401(k), an individual
retirement account or two, and perhaps a
401(k) from a former job, you may have
money in dozens of funds.

That’s not even factoring in an
individual retirement account and a
brokerage account.

Across these accounts, you may be
duplicating where your money goes.

But do you really need to choose that
many investments?

Their suggestion is to use three index
funds that track US stocks, bonds,
and international stocks.

They also suggest a mix of taxable, tax
free, and tax-deferred accounts.

Active versus Passive
Investing

Over the years more and more
investors have found that they are
unable to successfully time the
market.

And, many find that their stock picks, bond
purchases, and real estate investments
are not beating the return on an index
fund that tracks the S&P 500.

Thus, many have moved to passive
investing.

If you want to be an active investor
and believe that your investment
choices will outperform a set of
passive investments, you need to
spend the time necessary to track
your investments and do research for
picking new ones.

If you simply do not have the time to do
this, consider the simple steps to
successful investing that we suggest.

Simple Steps to Successful Investing

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Simple Steps to Successful Investing