beginner-investing

If you can do the following things, you can be a successful investor.

1. Find good resources and help
2. Learn something new
3. Set goals and follow through
4. Be patient and use common sense

Women can be great investors if they're motivated. There's no magic to investing, but it will
take some committment of time and effort on your part. Don't worry, you won't need to learn
about the latest investment fads, or spend large amounts of time.

Find good financial resources and help
Start by exploring TheSilverPurse.com articles and our links page for trusted resources. You
can also get informed (and entertained) by good personal finance magazines, such as
Kiplinger magazine or Money magazine. Kiplinger.com also has free information on their
website. Other good places to read are Bankrate.com and Yahoo.com Finance. Scan
personal finance articles, magazines or books regularly to find money-saving ideas or useful
investing information.

Find out when it's important to get help from a financial professional. Choose a Certified
Financial Planner™ who charges by the hour, or another trusted professional.

Learn something new about personal finance
We suggest at least 15-20 minutes of reading/learning at least 4 times a month. "Take four
for your future" is a good motto to follow. Even busy women can fit in four 15 minute periods
of financial web browsing or reading a month. Over a year, you'll have given yourself a 12 hour
"course" and will be that much more informed. It's your money and your time--make it work
towards your goals.

Follow your interests and needs as you learn about investing. Are you faced with selecting a
mutual fund for your retirement account at work? Join a shopping trip to learn how mutual
funds work or explore how to use the Morningstar rating system. Do you need to set up some
savings for emergencies? Perhaps you're wondering if an IRA would be good for you. Be like a
cat and go where your curiosity or need leads you.

Set goals and follow through.
To start with, think about why you want to invest. Are you looking for short-term savings for
emergencies, investments that produce regular income now, or a retirement investment for
growth?

Most people will need some funds for short term purposes as well as longer term needs.
Money needed short-term is usually considered savings. Long-term money goals require
investing. The first step on the path to long term investing is to lay the groundwork by
making sure you have the cash you might need for emergencies or hardship.

Your first goal is to build some savings for short term and emergency use.
Set up a comfort-cash fund to provide you with some liquid money for those unexpected
expenses we all face from time to time. Read more about the how and why of comfort-cash
funds. You should aim for at least $1000, but it's even better to have 3-6 months of living
expenses put aside. Use high yield savings accounts, or money market mutual funds for
short term and comfort-cash savings. Watch a short video link from Morningstar's Christine
Benz about where to stash cash and how much you need.

The next goal should be to reduce high interest loans, such as credit card debt.
Look at paying some of that off before you put funds into investing. The return you'll get from
paying off debt will be better than what you might get from most investments these days.
Most people will save 15-30% interest by paying off credit cards. Paying off debt isn't very
sexy, but it will make you more financially secure and free up funds to put into investing later.

So, that's it for laying foundations. Now, let's look at the best place to start investing.

Start by contributing to an employer retirement plan.
This is the first real investment most people should make. Employer "qualified" retirement
plans go by names such as 401(k), 403(b), SIMPLE IRA, and pension plans. Your money will
grow faster when it's matched by your employer. It will also grow faster when taxes are
deferred, which is why you start here. If you have no employer retirement plan, open a
personal IRA if you have earned income.

How should employer retirement plan be invested? You'll be limited by the offerings in the
plan, but look at growth investments such as stock mutual funds if you have at least 10 years
to retirement. If you're the cautious type, you might lean towards a Balanced fund, which will
have some bonds in addition to stocks. To see what types of investments might be
appropriate for you, take the risk tolerance quizzes on the Risk/Reward page.

Don't worry too much about choosing the perfect investment. There are many ways to invest
that are right over the long term. Just keep opportunity open by choosing investments that will
provide growth if you have a decade or more until you take the funds out. We'll cover more
details on choosing investments in the next section.
Robin Applegarth

Part 2--How to build the essential investment "wardrobe"