Today is investing day...just because

Ah, geez, here's the sucky part of money. In order to do anything with it, you have to save some first or receive a windfall (like a gambling win or being the missing heir.) Chances are fairly decent that you'll have to take the savings route.

Now, I don't want you to think that I am assuming that you do not or have not saved. Many of us do. But it's tough to invest if you don't have any money to do so. It's also difficult to invest in somewhat illiquid assets if you might need the money. The flip side of that is the problem that many of us have when cash is available: we feel compelled to use it.

There's this need to save so that we can make money with money, but then we have this need to acquire with the money we save. It's a game that can be hard to play, but only if you pay too much attention. The best way to save is to set it up automatically and forget about for six months. (This is where I remind you that I am not an investment professional.)

For a lot of people the best way to do this is to set up some sort of automatic payment to a separate savings account (and later to a money market account.) When you have saved about 3 to 6 months worth of income (and this is actually very simple to do, it just takes some time) then you can start thinking about investments. Of course, you need to save for those, too, and one of the best ways is to take advantage is a 401K, if you work for a company that offers one. Self-employed folks have options, too. But I'm not self-employed so I don't know much about that.

And once you develop the habit of blind saving, you shouldn't give it up (the IRS takes advantage of our capability to do this by automatic payroll deductions for income taxes.) Keep saving even after you hit the six months of income target. That extra money can be invested or you can use the excess to splurge on travel or some other things you've always wanted.

There are hundreds of books out there on investing and I can't really recommend any of them because I'm not a big reader of that type of work. The important part is saving. After that, reading about the types of investments and becomes much more important. Many websites contain this info, too. My favorites are MSN Money and Fidelity.

The whole reason for this post, besides the fact that my mom had this same piggy bank, though in a more amberish hue (and I chipped the protruding opening for the coin) is to set us up for talking about some of the investing experiments that I am going to tackle. I've been saving for years. I have some investments already, but I want to do a few things I have never done before. If this sounds a recipe for loss, well, maybe it is. Let's find out how much.

Don't worry--the blog will remain random and haphazard as ever.

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