What is the easiest way to start investing? what steps do i take? where do i start?

I recommend that you read Money magazine to learn some of the basics. If your employer has a 401K program, sign up for automatic withdrawal so you don't see the money. Start to max it out early in life and it will turn into real money over time. Open a Roth IRA with a discount broker and minimize the negative effects of fees and taxes over time. (I like Scottsave.com - $7 trades.) Also, look up and learn about the Portfolio Theory.

There is a great site called ShareBuilder.com that is designed for people that are starting to invest. They have an "Investor Starter Kit" that is definitely worth the money.

Talk to your bank first. I started investing in stocks in the 8th grade with my dad. Now I am 21 years old and do my own investing on E*Trade. Read over the information E*Trade gives you and even call them for some advice. Can't beat the price/quality of their service. $6.99 - $9.99 a trade and now if you sign up, you get 100 free trades.

READ BEFORE YOU DO ANYTHING! IF IN DOUBT READ AGAIN OR CONTACT A BROKER.

WATCH SUZE ORMAN OR NIGHTLY BUSINESS REPORT ON PBS.ALSO,CHECK OUT FINANCIAL BOOKS FROM LIBRARY. Ask A friend you trust. Remember what your mom told you about"If it seems to good to be true, It Probably is."

Start saving money into a high yield savings account and at the very least you have cash and then open a retirement account. Roth IRA is good or traditional IRA. You aren't taxed on the Roth when you take your money out (because you paid income taxes on it) and for the traditional your tax is deferred. You can open one up through your bank usually or a company like Fidelity or Vanguard and they will answer your questions.

Then, once you have the account you could put up to $4,000 a year (it will go up to $5,000) and then invest in an index fund, like Vanguard's S&P 500 fund.

An index fund is basically investing in the exchange, so if the S&P goes up 10%, your investment goes up 10% Historically the S&P goes up 11% and the Dow a little under 10%. 11% is a great return, especially over time and if contribute regularly.

There are many, many options, but this is a quick, easy way with tax benefits. That is if you are investing for the long haul, which is the best and safest way to grow wealth. If you have other investment goals, then you should look at other strategies.

here is my short answer:

open a Roth IRA with an online brokerage firm that has Vanguard funds available. contribute the maximum each year (currently $4000) and invest in VFINX, vanguard's S&P 500 index fund. go on with your life.





here is the extended answer:

before you start investing, it would be a good idea to take a look at the state of your finances and assess a few things.

the first step should be to look at your high interest debt: this usually means credit cards. if you have a lot of credit card debt, there is no point in investing until this is paid off, since your investment returns will generally not beat the interest you are paying on your debt. this applies to any other debt you have as well, like school loans. if your loans are higher then 5-6%, then I would recommend paying off those loans first, since the highest "guaranteed" return you can get nowadays is in the 4-5% range.

once you are debt free (or close to it) you should think about setting up an emergency cash fund. you should start saving money so that you have about 3-6 months salary set aside in case anything happens to you (accident, you lose your job, etc.)

once you have some savings, you will be in very strong financial shape. very few people in america can say they are debt-free and have savings set aside for a rainy day. you will now be ready to look investments.

when deciding how to invest, there are several things you should ask yourself:

1) how much risk are you willing to take on? if you are young, say 25, you can afford to take on more risk than an older person who is nearer to retirement age and will need the money sooner. also, ask yourself if you can stomach a big drop in your investments. can you handle the market dropping 30% for no reason? 50%? if not, you may want to stick to less risky investments like bonds.

2) what is your timeframe? one important reason for the emergency fund, is that you should leave your investments alone and let them accumulate interest. when you invest money, assume that you will not touch that money again for at least 5 years, and probably more like 20-30. this is especially true of retirement accounts like IRAs, where there is a large penalty for withdrawing early.

3) maximize the tax shelters available to you. everyone who qualifies should open an IRA. currently, you can contribute $4000 to an IRA each year. you should look at the different kinds to see which is right for you. Generally speaking, Roth IRAs are best unless you have other significant tax shelters like property. Also, take fulladvantage of any 401(k) matching programs at work. if your company is willing to match your contribution, you should contribute the maximum they will match. it's free money! self employed people who don't have 401(k)s can have SEP IRAs or personal 401(k)s that are especially for the self-employed.

in general, most people do not have the time or interest required to buy individual stocks. generally speaking, your best bet id to have a balanced portfolio. mutual funds are one avenue, but personally I hate mutual funds. you pay a premium because most are actively managed, and yet, they generally don't outperform the S&P 500.

Index funds, however, charge nominal fees (.2% compared to 1-2% of mutual funds). they simply follow the indexes, and achhieve the same result. the Vanguard 500 approximates the S&P 500, which is generally looked at as the investing benchmark. if you do as well or better then the S&P, you're doing pretty well. that said, the easiest and most cost-efficient way to invest is to simply invest in the market (the S&P) and be done with it.

unless you really love investing and want to make it a hobby or profession. In that case, you should start learning. I think a great place to start is by reading about the great investors. The Intelligent investor, by Ben Graham, is a fantastic book. he was Warren Buffett's mentor. Buffett is also a great person to learn from. all of his letters to the the shareholders of berkshire hathaway are online for free. these are nuggets of wisdom from the man himself. a third great person to learn from is Peter Lynch, the most successful fund manager of all time. links to their materials are posted below.

investing, if done with a bit of common sense, is an extremely rewarding experience, both as an education, and in pure financial terms. good luck

There's a number of responses to your question already, but I would tell you this. Start by READING READING READING. Go to Yahoo's Finance page, it's one of the better ones on the Web. Also, go to morningstar.com, and kiplinger.com. I now subscribe to Money and Kiplinger's Magazines. Read the Wall Street Journal. Read Investing For Dummies (No kidding, one of the best books I've read on investments yet).

I've been investing my own money for 10 years, and started in annuities, then went into Mutual funds, money market accounts, and finally investing in Stocks.

I'd also look at Orange Savings, their interest rate is like 3.4% now (one of the better savings accounts now, your traditional savings accounts are lucky to earn 1%).

The URL's I've used are below in the sources block.. Good luck...