You should educate yourself on investing and how markets and economies work. Read a few books on the subject. Before you attempt to invest in individual stocks, mutual funds or real estate just study up. Here are three good books to start:
- The Four Pillars of Investing (investments)
- The Intelligent Investor (stock value investing)
- Rich Dad Poor Dad (personal finance)
Do not seek get rich quick schemes or promising high return funds. Compound interest and dividends will do the job for you because markets go up in the long term.
Meanwhile, it would be wise to invest in the market itself and not try to beat it. You can invest 60-80% of your investments on index funds which simply track the market. Two good index funds are:
- Vanguard S&P 500, which tracks the 500 biggest companies in the US
- Vanguard Total Stock Market Index Fund, which tracks the entire US equity market
And 20–40% of your investments on bond index funds because equity markets have very high volatility. Less risk, less reward.
Focus on keeping the expenses low. The reason I suggested the above is because Index funds and especially Vanguard have very low fee in the market.
Do not invest all your money in one go but try to invest the same amount every month. This is what the experts call Dollar Cost Averaging, which means that by investing the same amount every month, you buy more stocks when the market is down and you buy less when it’s high. Overall, it will smoothen your financial journey.