Investing

This section covers the fundamentals of investing for the long term: opening an account, buying your first fund, the concepts that decide most of your results, and how to assemble a portfolio you can leave alone. It assumes no prior experience and starts from the beginning. If you already hold individual stocks and want to generate income from them, the Options section picks up where this one leaves off.

Getting started

For readers who have not yet opened an account or made a first purchase.

• Why invest at all: what investing does that a savings account cannot, and why time in the market matters.
• Brokerage accounts: what a brokerage account is, how it differs from a bank account, and how to choose one.
• Your first investment: the steps from a funded account to owning your first fund.

Core concepts

The ideas that determine most of your long-run outcome, independent of which specific funds you pick.

• Index funds: what an index fund is and why broad, low-cost funds are the default choice for most investors.
• Dollar-cost averaging: buying on a fixed schedule regardless of price, and what that does and does not solve.
• Asset allocation: how splitting money across stocks and bonds sets your risk, and how to choose a split.
• Fees and expenses: where investment costs hide and how small annual percentages compound over decades.
• Inflation: why returns are measured against rising prices, and what that means for cash versus invested assets.

Building a portfolio

For readers ready to assemble holdings into a structured, maintainable portfolio.

• The three-fund portfolio: a simple, widely used structure built from total-market and bond index funds.
• Rebalancing: bringing a portfolio back to its target allocation as markets move it off course.
• Tax-advantaged accounts: how 401(k)s, IRAs, and similar accounts change where you hold what.

Don’s take

• The case for indexing: Don’s argument that most investors should buy low-cost index funds and stop there, and who the exceptions are.

Where to go next

Already investing and curious about income on the shares you hold? The Options section covers that. The FIRE section connects this material to saving rates and the path to financial independence.