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If you're new to investing, it can look complicated. But it doesn't need to be. This is part 5 of 5 parts.

By MSN Money staff

The editors at MSN Money have put together this Beginner's Guide to Investing to help you start putting your money to work:

There are different account types for different investing goals. Is this fun money, set aside to build a vacation fund? Or will you be buying groceries with the investment returns when you're 85?

Here are your main options (also described in the videos to the right):

401k

If your employer offers a 401k or similar plan, make sure to take full advantage, especially when it comes to the free dollars available in the form of a company match.

Individual retirement account (IRA)

Make the maximum contribution to an IRA, which allows you to put some of your income into a tax-deferred retirement fund to grow tax-free until you retire. You won't pay taxes until you withdraw your funds.

529

Start a 529 plan to save for your kids' college expenses. Be warned that these plans don't always live up to the hype. Though they remain a good choice for some. Check out this interactive tool to help you see the pros and cons of 529s.

Brokerage account

Open a brokerage account to start investing for goals that are more than five years in the future. Want to build a vacation fund? Use investing profits to upgrade your kitchen? This is the place. To help you choose a brokerage, consult this ranked list of the best online brokers.

Find a broker now

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Thursday, November 12, 2009 8:32:18 AM

When it comes to investing, you have to know why you are putting money in the company.  Over the years I rode several stocks with great returns, Including Boeing, Coca Cola, Hewlett Packard and FedEx.  Each one gave me solid returns.  I own none of these today, though HPQ and KO may make it back in the future.  FDX and BA probably not.  These two companies relied too much on the Boomer generation.  The spending crowd.  They are now the saving crowd, having realized that the party is over and the bills just keep on coming. That an old age.  After all, even Boomers are getting old and crappy; it happens to all of us eventually, except Boomers thought that somehow they were exempt.

 

We all know what came after the Baby boom right?  The Baby bust.  The next generation is far thinner than the Boomers, so the next 25 years are going to be tough.  Social Security was built upon the premise that there will always be more working stiffs than retirees.  Fifty years ago no one thought that people are not going to have as many children as their parents had.  Fifty years ago colour televisions started to arrive.  The internet was nowhere, ditto for touch tone phones, IPods and IPhones and the rest.

 

So where to invest?  I cannot tell you, you have to do your own work, yes work, to figure it out.  As Leviticus1822 says, buy what the masses are selling.  That doesn't come easy.  It doesn't feel right, but it is the only way to make money on your hard-earned money.  You have to be smarter than Wall Street and believe me, that is not a hard thing to do.  They too are lemmings for the most part.

 

Good luck to you All.

Wednesday, November 11, 2009 9:42:40 AM

I pulled all my money out and I can't tell you how good I feel.  I have lost faith in the system.

 

It has become nothing more than glorified gambling. 

 

I knew how crazy things were when a close relative said to me, "We did pretty good (with the crash)...we ONLY lost $100,000!!!!   Another relative lost half a million dollars...and is still hanging in there hoping for the best.  Can we say, welcome to crazy-town???

Wednesday, November 11, 2009 8:55:43 AM
Never again. NEVER. Wallstreet can keep their games. The more of us that pull out, the less they will have to squander. Local banks, guaranteed by FDIC and credit unions are the only way to go now. To heck with big banks and wallstreet. You cannot be trusted anymore. Go get the politician's money, they deserve it.
Wednesday, November 11, 2009 8:23:41 AM

Don't buy their snake oil - Real experience:  From 1992-1999, I invested the same annual amount in mutual funds, indexed and managed, all big names, 4&5 star rated.  My total investment was $72K, average term 13 years.  During the meltdown I actually have a negative face-value return.  Today, I have a cumulative 34% return for 13 years - less than 2.5% per year over an extended period of time, both boom and bust.  This included lots of good times, economic growth, low federal deficits, cheap energy and less international competition.  Do you see these business factors improving in the future?  Will it be easier to make money?

 

In inflation adjusted terms, I am negative.  The mutual fund industry earned 16-24% on me with no risk.  That is why I stopped in 1999; I left the money in mutual funds - punishment - but never added another dime to mutual funds.  If you are a young person, paste this in your book of experience.

Wednesday, November 11, 2009 8:02:22 AM

NOW is the time to buy without a doubt!  All of these uneducated bafoons who are scared and pulling their money out are exactly what the smart investor wants.

 

Buffet said it best - "Be greedy when others are fearful"...

 

All of you chicken $hits out there, will never earn a buck in the stock market becuase you simply read too many articles rather than edify yourselves....I love the ignorance of you people!!!  Makes me lots of $$$$$$$

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Updated Nov. 3, 2009