Originally answered Sep 17, 2021
- You have saved six months’ salary or more that you will keep in savings, and now you have additional funds that you can invest.
- 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.
- You understand that past performance of a prospective investment is no guarantee of future performance.
- 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.
- You are planning to invest for the long term.
For more, see What are some financial tips that everyone should know?