Welcome to The Simple Nickle!

Clueless about your money? Do you want financial security, but don't know where to start?

The Simple Nickle is a free web-based program to help you easily understand and control your finances in less than 15 minutes a day! We'll guide you step-by-step; it's as easy as checking your email! We'll also give you easy-to-understand financial education starting with the most basic aspects.

The Simple Nickle: Phase 5

Phase 5: Investing

  1. Determine your financial goals.

    Wow! We have really come a long way with our finances. We are going to start putting that money we have used to pay off our debts and build our emergency fund to begin investing for our future. Now the fun begins...making our money grow and work for us. In order to know how we ought to invest our money, we need to determine our financial goals. Our financial goals can be anything we dream of: paying for college, a cruise, owning our home free and clear, etc. Some goals will be short term(we hope to achieve them in less than 3 years), some medium term(3-5 years away), and some long term(more than 5 years away).

    Today, take 15 minutes to think about and write down your financial goals. You can put them on paper or email them to yourself. A goal is just a wish until it's written down!

    1. Grab pen and paper, or open a new email message.
    2. Think about your goals for the future.
    3. Write them down.
    4. You're done!
  2. Find out about a 401k.

    Now don't get intimidated by that number-letter combo...a 401k is simply an employee sponsored retirement plan. Many employers offer this plan, and today we are going to find out if we are able to have one. A 401k will allow you to save money for retirement pre-tax, meaning you pay taxes on that money later(when you are retired) instead of now. This gives you more money to grow, and more money to work for you now. Many employers will also match money that you put into your 401k, up to a certain limit. We will also find out today if we get any of this 'free money.' And another perk of 401k savings: they are tax deductible, meaning the more you save now, the less taxes you have to pay now.

    NOTE: If your employer does not offer a 401k, don't despair! Next, we'll talk about what to do if you can't get a 401k.

    1. Contact your employer and ask for who has information about retirement plans.
    2. Ask about a 401k or other retirement plan and ask if the company offers a match to your contribution.
    3. Sign up, or request the forms to sign up.
    4. You're done!
  3. Determine your feelings about risk.

    Investing almost always involves risk. Sometimes there is very little risk, sometimes there is a lot, depending on what you are investing in. To help you choose the best investments for you and your goals, you need to figure out how much risk you want to take on. After all, what good is investing your money if it makes you sick with worry?

    1. Think about your risk tolerance. Take this quiz to help you.
    2. Once you have an idea of what you can handle, read
    this article about the risk involved with different investments.
    3. Think about what investments will be best for you.
    4. You're done!
  4. Learn to learn about investments.

    Now, we've been through a lot together, and I bet you'd be surprised to realize that you're pretty financially smart now! You're in a very good place with your money thanks to your dilligence and tenacity.

    Throughout this process, we have guided you to learn about different aspects of your money. Now it's time for you to take a little more liberty and strike out on your own, to learn more about how best to make your money grow! Don't worry, you'll do great! There are so many possibilities out there when it comes to investing your money that we don't want to limit you.

    1. Get online and go to Yahoo! Finance at finance.yahoo.com.
    2. Find the 'Investing' tab at the top, and then select 'Education' from the drop-down menu.
    3. Click on 'Learn the basics of investing.'
    4. Explore! Take 15 minutes to read up on anything that interests you. Enjoy!
    5. You're done!
  5. Try a practice run at this investing thing.

    We've learned a little about investing, now let's try our hand at it. One of the best ways to learn is to do, and since we are beginners, it would be nice to invest without risk to see how we fare. Luckily, there is a neat program through Investopedia that let's us invest 'pretend' money in the stock markets. The stock markets are a good place to start investing small amounts of money with low, moderate, or high risk. Let's give it a try!

    1. Go online to Investopedia.com and click the tab that says 'Stock Simulator.'
    2. Click 'Register Free.'
    3. Follow the steps to Create an Account. Select only the newsletters and free offers you want, or none at all.
    4. Under 'Join Games,' select 'Investopedia Competition.' This is where you will practice your investing, and is not really a game as we might think of one.
    5. Explore the site, especially the tabs 'Portfolio,' 'Trading,' and 'Help,' where you can learn all about the simulator.
    6. You're done!
  6. Buy something in your stock simulator.

    Alright, let's give this stock market thing a whirl!

    1. Log in to your portfolio at investopedia.com.
    2. Click the 'Trading' tab.
    3. Choose a company to invest in and enter the stock symbol. You can look up stock symbols at Yahoo! Finance's search box in the upper left corner.
    4. Enter the rest of the information and click 'Preview Order.' Don't know what something is or means? Look around on the site for helpful information.
    5. Review the order and click 'Submit Order.' You can then skip the 'why did you make this trade?' screen, if you would like.
    6. You're done!
  7. If you don't have a 401k, open an IRA or a Roth IRA.

    If you don't have a 401k, there are still ways to save for retirement and get the tax perks. To figure out which type of IRA is best for you, read this article, Which IRA is Best?, or any other information you find on the subject.

    1. Read this article, or other info you find.
    2. Choose a place to open your IRA account. We like Scottrade online(scottrade.com), but there are many others to choose from.
    3. Open the account, or request the forms to open your account.
    4. You're done!
  8. Invest money in your 401k or IRA.

    Today we are going to begin funneling our extra money that is now free from paying off our debt and building our emergency fund into our investment account. It will begin to add up quickly, which will also allow it to grow quickly!

    1. Log in to your account online, or call whoever is in charge of what goes into your account.
    2. Specify the amount to be put in on a monthly basis, or send in a monthly deposit. The amount should be the amount you had been putting toward your emergency fund each month.
    3. You're done!
  9. Keep learning about investments.

    We have now gotten our feet wet in the world of investing. It's a big, fun, interesting world! The key is to keep exploring and learning about what kinds of investments suit you and help you achieve your goals. By spending just 15 minutes each day thinking and learning about your investments, you will secure your financial future.

    1. Get online and check out some financial websites. We like Yahoo! Finance, Motley Fool, Investopedia, or others you might find.
    2. Set your timer for 15 minutes and read away! Use the knowledge you gain in your future financial decisions.
    3. You're done!

<-Back: Phase 4: Insurance

Next->Phase 6: Maintaining Your Money

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