Originally answered Sep 17, 2021

  1. You have saved six months’ salary or more that you will keep in savings, and now you have additional funds that you can invest.
  2. You understand that unlike savings, investments can go down in value, and that you can lose some or all of the money you will invest.
  3. You understand that past performance of a prospective investment is no guarantee of future performance.
  4. You have done some reading about investing and understand the basics, including stocks, bonds, no-load mutual funds, index funds, ETFs, REITs, Roth IRAs, 401Ks, expense ratios, and dollar cost averaging.
  5. You are planning to invest for the long term.

For more, see What are some financial tips that everyone should know?