I have been investing for the past 20 years. I have had wins and I have had some painful losses. I can’t imagine how much bigger my account would be had I known what I know now. Below are 5 simple tips that I have learned along the way that can help you become a better investor.

1. Put your money into a low-cost S&P 500 Index Fund

When you're just starting, simplicity is key. Instead of getting bogged down in the complexities of individual stock picking or the allure of high-risk, high-reward investments, consider putting your money into a low-cost S&P 500 index fund such as VOO or SPY. There is a reason that all other investments are compared to the S&P – it just works. This type of fund provides exposure to 500 of the largest publicly traded companies in the United States, offering diversification and growth potential while keeping costs low. With an index fund, you're essentially investing in the overall performance of the stock market, which historically has shown steady growth over the long term.

If you are just starting, the best thing you can do is just keep buying shares of the S&P 500 while you focus on other ways to earn and invest your money.

2. Focus Your Energy On Earning More (not picking stocks)

While it may be tempting to spend hours researching and analyzing individual stocks, especially in today's information-rich age, your time and energy may be better spent focusing on increasing your income. Whether through advancing in your career, starting a side hustle, or investing in your education and skills, earning more money can have a profound impact on your ability to invest and build wealth over time. Remember, the power of compounding works best with a solid foundation of savings and income.

A small investment account can get whipped out fast on individual stocks, there is not much room for error. Your time is better spent increasing your income to invest more into an index fund. Once you have a large enough account, you can start allocating a small percentage to individual stocks.

3. Automate Your Investing

One of the most effective ways to ensure consistency in your investing strategy is to automate it. Set up automatic contributions from your bank account to your investment accounts regularly, whether it's weekly, bi-weekly, or monthly. This not only helps you stay disciplined and avoid the temptation to spend the money elsewhere but also allows you to take advantage of dollar-cost averaging. By investing a fixed amount at regular intervals, you'll buy more shares when prices are low and fewer shares when prices are high, smoothing out the volatility of the market over time.

One of the key benefits of dollar cost averaging is its ability to promote disciplined investing habits. By automating contributions and sticking to a consistent investment schedule, you can avoid emotional decision-making and stay committed to your long-term investment strategy. Additionally, DCA can help mitigate regret by spreading out investments over time, reducing the risk of investing a significant amount at the wrong time. While dollar cost averaging is not a strategy for short-term gains or market timing, it can be an effective way to build wealth steadily over the long term, especially for investors with a patient investment horizon and a focus on accumulating assets for the future.

4. Get to $100,000 Invested ASAP!

While the journey to $100,000 may seem daunting at first, especially for new investors, setting this milestone as a goal can provide you with a clear target to work towards. The sooner you start investing and the more you contribute regularly, the faster you'll reach this significant milestone. Once you've accumulated $100,000 in investments, you'll not only have a solid foundation for your financial future but also benefit from the power of compounding, where your money works for you, generating returns on both your initial investment and its earnings.

Why is getting to $100k so important? The bigger the snowball - the faster it rolls…

The S&P 500 increased 23% in 2023. On an investment of $1000, you would make $230. If you had $100k invested, you earned $23,000 by literally investing in the same fund.

The most powerful thing you can do for your financial future is to get to $100k as soon as possible.

5. Invest in What You Know

When you have put a substantial amount into the S&P 500 – you can start to dabble into other investments. Warren Buffett famously advises investors to "invest in what you know." This timeless wisdom encourages you to focus your investments on companies and industries that you understand and believe in. Whether it's technology, healthcare, consumer goods, or real estate, investing in familiar industries can give you a competitive edge and help you make more informed decisions. Take the time to research and understand the businesses you're investing in, paying attention to their fundamentals, competitive advantages, and growth prospects. By aligning your investments with your knowledge and interests, you'll feel more confident in your investment decisions and be better positioned to weather market fluctuations.

As a seasoned investor I recently started using AInvest – and boy is it powerful. I recently signed up for their Pro account to get an AI analysis of my portfolio. (Don’t worry, my portfolio is 80% S&P 500). I do enjoy investing in the latest trends (Such as AI and EVs) and trying to find the next Amazon or Netflix. If you are looking for a powerful way to find new stocks, invest in trends, and get in on the next big wave, check out AInvest!