The way to start investing - How to start investing money and don't worry

Although investing money always involves risks, you need to start investing right away if you want to move forward. Investing in 2011 and 2012 won't be easy, but there is no better time than now to start investing your money in the business. Money in the bank won't get you ahead of inflation and taxes, so here's how to get started investing with minimal risk and anxiety.

If you haven't gotten into the game of investing your own money, this can be intimidating. It's hard to take this first step and start investing when the average person looks at the future pessimistically - think 2011, 2012. It's better to start with a conservative strategy than not to start at all, so let's look at the safest way to start. First, you have to wet your feet and open an account by depositing money. Here's how and where to do it, and how to proceed from there.

For most people, mutual fund companies are the best place to start investing money, and the best place to live. Go online and search for "no-load money" and you'll see ads from Vanguard, Fidelity, and T Rowe Rates: Some of America's Biggest, Best, and Most Expensive Finance Companies. No-load means you pay no sales costs, so, along with the total costs and expenses they make, it can save you thousands of dollars over the years. Find out what they offer, then contact the company of your choice on free calls if you need help opening an account.

Start investing by placing your initial investment in the most secure of funds, called a money market fund. Here you will earn interest in the form of dividends that are automatically reinvested into more shares. You will earn very little interest in 2011 and 2012 as interest rates are close to all-time lows (like your bank). But your money is safe and you've taken the first step. Now you are ready for the second step, which means that you will transfer some of your money and start investing in a mutual fund where you can use your money to work in stocks and bonds. It's easy to do, and you can always contact the finance company for help for free.

The way to start investing

What you are looking for are hybrid mutual funds - those that invest in stocks, bonds, and some other safer investments as well. Look for or ask for a mutual fund with a conservative asset allocation, because you are willing to invest money, but you want to start with relatively low risk. For example, the Target Retirement 2000 or 2010 fund will allow you to invest in a portfolio that mainly consists of safer bonds and investments with fewer shares. In fact, in an investment fund like this, you are actually investing money in many different mutual funds offered by a fund company, all in one investment package.

Once your feet are wet and used to invest money in exchange for just putting it into the bank, you may want to add a balanced fund with medium assets allocation to your asset list. Here, each mix of stocks and bonds should have an equal share, and the potential risks and returns will be higher. If stocks start to look cheap in late 2011 or 2012 or later, consider investing in a more robust investment fund like the 2030 Target Pension Fund, where most of your money will be invested in a variety of equity funds.

2011 and 2012 may not be the best time to start investing money, but now is not an easy time to invest (as I learned in 40 years of helping people invest money). Don't procrastinate like most people. Start investing conservatively and spread your wings as you gain confidence. Balanced mutual funds are a great place to start and mitigate worries.

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