The goal here is a practical explanation of how a US citizen can invest money with an evidence-based, long-term approach. My view is that many people delay investing for a few reasons: (1) they know loss is possible and fear it; (2) they don’t fully appreciate the immense long-term benefits of wise investment; or (3) they think investing is an activity that demands ongoing research and stressful decision-making about which companies to invest in. I think many people are hesitant to even start researching because there are simply too many options, which implies that there are many ways to make the wrong decisions.

This document will offer a starting point to resolve those obstacles with highly concrete suggestions for investment. It will explore how individuals can personalize their distribution of investments along the spectrum of low to high risk. A number of general guidelines are also provided for how to structure your investments in the context of other aspects of personal finance, and how to plan for retirement. At the end is a list of resources and important vocabulary with links. This document doesn’t contain every granular piece of information needed to start investing, so the list is intended to provide an idea of the concepts you should understand before you start.

Before you begin reading, you may want to start with some introductory material.

This series of ten short videos slowly introduces the basic concepts of investing and assumes zero prior knowledge. I've created a YouTube playlist of the videos at that link. (Two videos in the series are skipped deliberately, because they contain descriptions that don't apply to the investments in this guide.)

This video is a great explanation of the principles of financial markets and the approach to investing that will be applied here. Even those with some knowledge about investing will benefit from the discussion.

You can see the descriptions of each section below, as well as my estimate of how long each section takes to read at a slow speed suitable for processing new concepts. Throughout the guide, many hyperlinks to accessible resources are included to make it easy to learn more than is presented in the text. You may want to click on them as you read, or return to them afterward. The time estimates include only the main text, and not the time taken to click to the hyperlinks or read the footnotes. The current total, excluding the advanced topics, is about 2½ hours.

Click here for the next section — Introduction to index funds

All sections:

• Cover page - you are here | 2 min
• Introduction to index funds - the most important vehicle for long-term investing | 12 min
• Thinking about risk - how bonds work, and the risks of different investments | 24 min
• Tax-advantaged accounts - intro to tax-advantaged investing | 19 min
• Guidelines for financial planning - personal finance and investing topics | 13 min
• Investing for retirement - mathematics for retirement planning | 11 min
• Building a stock portfolio - how to think about selecting stock funds | 11 min
• Fund proposals - specific portfolio suggestions | 10 min
• Your psychology - enforcing your own rational behavior is the hardest part | 3 min
• Concerns for the small/large investor - advice particularly for small or large investors | 3 min
• Practical information for execution - gritty details to read before you start | 9 min
• Taxes - how taxes work and how to use tax-advantaged accounts | 28 min
• Vocabulary and further resources - an organized list of what you need to know | 3 min
• Advanced topics - for informed investors with mastery of the basics | 45 min