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Here’s my approach (read: strategy) to investing: find a way to put your money into holdings that provide three things:

1. Desired liquidity. Do you need the money in a week or in a decade? Longer? Figure out how long you can go without needing this money and then find an investment that matches your time frame.
2. Desired risk. Once you understand investing (and money in general), you’ll be in a better position to determine the amount of risk you’re willing to take on. The reason people may seek out higher-risk investments is that they believe the returns may be greater than an investment somewhere else.
3. Desired return. Knowing that inflation will always factor in, figure out how much your money needs to make on its own. Are you planning to retire with what you have in the  bank now, or will you be contributing slowly over the course of a career? Once again, you may often face the option of trading risk for return.

Most of the investments we talk about on this blog will be investments that are pretty easy to get your hands on. I’m not a rich guy, nor am I in any exclusive investment club (or any other club for that matter…), so if I write about an investment that I’ve had experience with, most likely you’ll be able to immediately invest in it as well. Sometimes we’ll explore investment opportunities from a theoretical standpoint, but most likely we’ll cover just the basics (stocks, options, bonds, mutual funds, index funds, a little real estate, currency, commodities, etc).

This blog will hopefully provide you with answers, or at least insight, to the questions I had while in college and shortly after. As a young adult, I knew that if I began investing right away, I would be in a wonderful financial position upon retirement, and my money would be able to work harder than I would ever have to. If you have questions, advice, or just want to throw your two cents in, leave me a comment below!

To jump in a little more, here’s some more information on each of the ares above:

1. Liquidity. Liquidity is one of those fancy Wall Street terms that really just means, “can you get the money out right away, if you needed it?” Cash in your pocket is the most liquid of all, followed usually by the standard checking, savings, and online accounts. Offshore bank accounts in Grand Cayman that need a cosignatory and a notary public usually aren’t considered liquid, though they could be more liquid than having to dig up, convert, and sell gold bars.
2. Risk–risk is really a funny thing. It’s not understood very well by most people, who think that because the stocks in a market could go up or down at any given time, they’re risky. In truth, a stock market could be risky for someone who needs to have an amount of cash available and ready at arms’ length, but for most of us, the general “risk” of an investment is really based on opportunity cost as well: what are you losing now to invest in something that might pay off later? The stock market requires paying brokerage fees, commissions, and then tying up funds for a certain amount of time–this is usually the most important risk you’ll be assuming if you go this route. And, yes, you could possibly buy a stock that goes down.
3. Return. Return is a powerful tool to help choose investment strategies–if you know what you need to have as a base return, many options available to you seem outlandish if they don’t guarantee or nearly guarantee your desired return. And while we’d all love to earn about 30% yearly compounded for the rest of our lives, more often than not we’re going to get the stock market average of 8-9%. If you know you’re going to need X amount of money for your retirement (and there are calculators out there for that), you can figure out how much you’re willing and able to sock away into investment accounts, and the only thing left to figure out is the return you’ll need to attain to reach that retirement goal. For me, it’s an average of 10% yearly–quite high, but I’m on target so far.