(*Content provided by the White Coat Investor)
While the most common question the The White Coat Investor receives is “Should I invest or pay down debt?”, this post is the answer to many of the other most common questions:
- How should I invest my 401(k)?
- What mutual fund should I invest in?
- How should I invest?
- How do I know which stocks to pick?
- How do I invest this inheritance I just received?
While it is easy and tempting to give a quick off the cuff answer, it is actually a disservice to these well-meaning but financially illiterate folks to answer the question they have asked. The best thing to do is to answer the question they should have asked, which is:
How can I reach my financial goals while taking the least possible amount of risk?
The answer to all of these questions then is…
You Need an Investing Plan
Once you have an investing plan, the answer to all of the above questions is obvious. You don't try to reinvent the wheel every time you get paid or have a windfall. You just plug the money you have into the investing plan. It can even be mostly automated.