How do I start?

The question I get most is "I want to start investing...how do I start?"

I think that most people are clever enough to figure this out on their own, but they simply lack the passion to make smart investing a priority in their life. Notice I did NOT say they lack "time." I firmly believe that we have enough "time" to do ANYTHING. We just don't have enough "time" to do EVERYTHING. So we prioritize our time according to what we MUST do (work, responsibilities, etc) and what we WANT to do (our passions).

Therefore, my first piece of advice for those who want to "start investing" is that you MUST make it a priority in your life to be a smart investor. This doesn't mean that you have to spend 20 hours or even 2 hours a week on analyzing stocks. It simply means that you must put in the time necessary to make educated decisions. Heck - if you're not gonna make educated decisions then you may as well gamble your money away rather than invest it!

Once you've made up your mind to be a smart investor, we can get serious about what you can actually DO. While everyone's situation is unique, I would recommend the following step-by-step plan to get started:

1. Have a savings account for short term needs
2. Fund your retirement account
3. If married and your spouse doesn't have a retirement account, fund an IRA for them
4. Fund a ROTH IRA for yourself and your spouse
5. Buy a house
   
6. Invest extra savings in mutual funds/brokerage accounts/real estate

This list isn't exhaustive - but it is generic enough that it will probably apply to most people. Of course you could do some of the steps out of order, but I will explain in later posts why I put them in this order.

Questions/Comments:

Does anyone have a story about when they "made it a priority to be a smart investor?"
What do you think about my step by step list? Why is it in that particular order?
What step are you on? What step would you like to be on next year? In 5 years?