How to begin to invest when your stupid?

we want investing basics (401k etc) but some of the paperwork is confusing, and i have no idea where to start. any good sites on the web for people with no basic idea of investing or how to begin? please easy,easy,easy. thanks

You should invest in stocks, bonds, and money market funds. You want to buy a diversified portfolio of stocks, as individual stocks are too risky. For most folks this means buying mutual funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low cost funds. If you are like most people you will invest part of your money aggressively in stock funds, and part conservatively in money market funds and bond funds. Vanguard.com has an on-line questionnaire which will give you an idea of how to do "Asset Allocation," determining how much to put in each type of fund.

If your company offers a 401K plan at work, try to invest the most you can. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea. If you have children, you may want to consider a 529 plan or other college savings plan that grows tax free.

I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, I would suggest putting ~70-80% of your money in the Vanguard Total Stock Market Index Fund. and ~20-30% in a foreign stock index fund. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion

Buying a house instead of renting will save you a lot of money in the long run. You don't have to pay rent and you build equity in your house instead. Buying rental property can also be a good investment. However, being a landlord can be hard work, and many people are not good at it. If you don't know how to handle deadbeat renters, you can have trouble.

If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments.

Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.

Sources:

http://www.vanguard.com/VGApp/hnw/planningeducation
http://www.fool.com/school.htm
http://sec.gov/investor/pubs/assetallocation.htm
http://www.diehards.org/readsites.htm
http://finance.yahoo.com/education/begin_investing
http://finance.yahoo.com/funds/basics

Asset Allocation Calculators
(Determining how much to put in stocks and how much into bonds and money markets is a personal decision depending on your financial status. These Asset Allocation questionaires give you a rough idea how to do this. I like Vanguard best, but try some of the other sites as well.)
https://flagship.vanguard.com/VGApp/hnw/FundsInvQuestionnaire?cbdInitTransUrl=https%3A//flagship.vanguard.com/VGApp/hnw/planningeducation/education
https://ais2.tiaa-cref.org/cgi-bin/WebObjects.exe/DTAssetAlcEval
http://www.ifa.com/SurveyNET/index.aspx
https://www.wellsfargo.com/retirementplan/egp/road_to_retirement/already_saving/risk_tolerance_quiz
http://www.money-zine.com/Calculators/Investment-Calculators/Asset-Allocation-Calculator/

Web forum: http://www.diehards.org/
(Many investment web forums are overrun by scam artists. This one seems the most legitimate site.)

529 plans: http://www.savingforcollege.com

Try Vanguard.com then Personal Investors then Planning & Education.

I started out by just putting money into a higher rate CD,to start. That way you are guaranteed a fixed rate of return,and no worry of loosing your money in the market changes. Then when you get some extra built up,then look into other investments.

Just a comment here -- you have a tremendous advantage over most of the crowd in that you know that you are not an expert and there is probably not a pot at the end of the rainbow. Take it slow and easy. Learn as much as you can and never stop. It is perfectly OK if you get disgustingly rich through hard work and perseverance.

Do it in 3 step.

- First a nice bank deposit for safety and high income.
- Then save for a deposit on a house. A very good investment and a great feeling of ownership.
- Finally, invest in a couple of mutual funds, income type. They do not need any looking after and the statements they will send you every 6 months will teach you a lot. In the long term they will do very well.

Let the fools who often write here, chase the dream of quick wealth and quicker ruin. Investing is not gambling.

Hey, not knowing about something doesn't make you stupid.

Most 401K plans offer several options for your investment. They usually show how risky each one is - high risk means it might go up a lot, but might go down a lot too. A decent 401K plan won't have an option that is ridiculously risky.

The younger you are, the more you should lean toward taking some risk. If you are in your 20s or 30s, going for an option that's toward higher risk, although maybe not the riskiest one, makes sense - even if it goes down one year, you have plenty of time for it to come back up. If you're in your 40s, something in the middle makes sense. 50s or 60s, go for one of the more conservative ones.

In a 401K you can almost always split your money between multiple options - that's a good idea to do.

First-educate yourself- do not rely on others to invest your money. This is a good way to get cheated. While you are learning put it in a CD where it is safe. Talk to some of the mutual fund companies- Fidelity, T Rowe Price, Vangaurd. Listen to the financial programs on TV- but do not take any action on that basis- use it to inform yourself. 401K is good especially if your employer matches or adds to your fund. Find out what plans your 401 allows and begin exploring those options.

Investing in stocks takes a lot of work, a minimum of several hours of research per stock then about an hour per week per stock thereafter. I would suggest mutual funds for the less dedicated investor. A great site for newbies is thestreet.com, more specifically the street university tab has lots of great info for beginners.

Try reading the materials linked below. See if that helps.

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