Here’s the essence of investing for beginners — using the alphabet as a tool to help you remember.
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Read the transcript for The ABCs of Investing For Beginners
A is for Assets: stocks, bonds and other stuff.
Don’t fret about precision, getting close — good enough.
B is for Begin, to simply get started.
That’s the surest way to achieve dreams uncharted.
C for Compounding, for growth exponential.
Accomplishes big results and often essential.
D for Diversify, stocks and bonds in your pie.
Their ratio controls risk when things go awry.
E for Emergencies that come as surprises.
A responsible person has a reserve that suffices.
F is for Frugal, not cheap or miserly.
It’s prioritizing your spending and your life energy.
G for “Get Rich Quick”. Dismiss these schemes brisk.
Beating the market comes with a big dose of risk.
H is for Harvesting, in more advanced classes.
You might sell your losers to lower your taxes.
I is for Indexing, the lowest cost way.
For you get to keep what you don’t give away.
J is for Junk bonds, their tempting yields hawked.
But in bad markets, they behave more like stocks.
K is for Knowledge, about how to invest.
It’s lifelong learning that will help you the best.
L is for Low-cost. We like this a lot.
Keep what you earn and don’t finance their yachts.
M is for Mutual funds and avoid daily trading.
We’re long-term investors and eschew speculating.
N is for Noise, it’s worth tuning out.
We’re surrounded by blowhards that financial porn spout.
O for Overconfidence, a fault many have.
Feels good ‘til a bear market, then it feels bad.
P is for Penny, and the lesson we’ve learned:
A penny that’s saved equals two pennies earned.
Q is for Qualifying, to include and weed out.
It’s quite easy to do, then get out and about.
R for Retirees, and safe withdrawal voodoo.
It’s all about making your money last longer than you do.
S is for Saving, automatic paycheck withdrawal.
What you never see, is not missed at all.
T is for Timing, from tempting purveyors.
It’s only for those that believe in soothsayers.
U for U.S. bonds, as safe as it gets.
Keep risk on the stock side, safe bonds for the rest.
V for small Value, these funds carry more risk.
But if you seek out-performance, add these to your list.
W is for Writing a workable plan not too long.
Write the best you can now; and over time make it strong.
X is for X-ray, your funds — look inside.
For consistent styles, and lack of surprise.
Y is for You. How we remember thee?
Personality is revealed how you spend your life energy.
Z is for Zen, simple peace in your niche.
To know you have enough is to be rich.
There you go! That’s the ABCs of investing for beginners. If you liked it please give it a thumbs-up and leave me a comment below.
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This video may be freely shared under the terms of this Creative Commons License (CC BY-NC-ND 2.0). with attribution to Rick Van Ness and this web page. This work contains a collection of photographs which are either owned by Rick Van Ness or licensed under one of these creative commons licenses:
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“To know you have enough is to be rich.” This is from The Tao Te Ching.