Get ready to invest

It can be so easy to win?at this game.

Investing may seem intimidating, as with anything that’s new, but it’s actually quite painless. I’ll walk you through it, and by the end of this section, you’ll know exactly which accounts to use and when to use them.

You don’t actually have to worry about choosing the investments yet: I’ll show you that next week.

For now, we’ll set up the right account so that when you’re ready, you’ll know exactly what to do next. But before we go any further, we need to shift from being the person who knows we should save more and invest for the future to the person who takes big, bold, messy action.

Effective immediately.

Sadly, information by itself is not enough — you already “know” about compound interest, and if you simply needed more information, you would have already found it on your latest podcast or Youtube video or Google search.

Shall I go on?

Rather than berating ourselves and promising to do better by making New Year’s promises: how about we go head first into this and promise to take action and implement the material? How do we feel about that?

Yes?

I’m going to help you confront reality, take control, and realize that yes, you can invest simply and regularly without fear. And you can choose to supercharge your investments even more by following the step-by-step process: whether it’s $50 per month or $5,000 per month.

Introducing the 6 Stepping Stones of Investing

These are the six systematic steps you should take to invest. Seriously. Each step builds on the previous one, so when you finish the first, go on to the second. If you can’t get to number 6, don’t worry — you’ll know exactly what to do next and what your next target will be.

Think of this like Oregon Trail; as stepping stones to cross a river.

If you skip one stepping stone you'll fall in the water.

Once you've completed one step, great, move on to the next.

Let’s get started.

Stepping stone 1:?If your employer offers a 401(k) match, invest to take full advantage of it and contribute just enough to get 100 percent of the match. A “401(k) match” means that for every dollar you contribute to your 401(k), your company will “match” the contribution up to a certain amount. For example, let’s assume you make $100,000 and that your employer will match up to 3 percent of your salary. This means that you’ll contribute $3,000 and your company will match it with $3,000. This is free money, and there is quite simply, no better deal. And I’ll show you the numbers to prove it.

Stepping stone 2:?Pay off your credit card and any other high-interest debt. The average credit card APR is 14 percent, and many APRs are much higher. Sometimes double. Whatever your company charges, in no circumstance should you ever be paying interest on your credit cards. Paying them off gives you a significant and instant return in the double digits. No market risk. No timing risk.?

Stepping stone 3:?Max out your Roth IRA. (As long as you're within the eligible contribution limits — this is one of the most powerful accounts out there. For current contribution limits, click here.)

Stepping stone 4:?If you have money left over, go back to your 401(k) and contribute as much as possible to it (this time go above and beyond your employer match). The current contribution limit in 2021 is $19,500. For current contribution limits, click here. Are you self-employed? Great. This is where I would add any other tax-advantaged accounts including 403(b), 457(b), traditional IRA, SEP IRA, Solo 401(k), or even 529 plans.

Stepping stone 5:?If you have access to a Health Savings Account (HSA), it can double as an investment account with incredible tax advantages that most people do not know about. If you’ve completed the first four stepping stones, take advantage of this account. More on this later.?

Stepping stone 6:?If you still have money left over to invest, open a regular non-retirement “taxable” investment account and put as much as possible there. Also, this is where I would put any additional payments to your mortgage, dividend-paying life insurance, and further investments in yourself.

Remember the Stepping Stones of Investing show you exactly which accounts to use and when to use them.

This is a high-level overview and I've unpacked each specific step down to the nitty-gritty details in the most detailed Guide (on investing) I've ever released to the public for free. You can access it here:

Remember: These Stepping Stones of Investing show you exactly which accounts to use and when to use them.

Next, I’m going to show you what to invest in — and why.