Quite a few readers simply tune out when I mention investments. They don’t believe the topic applies to them at all. “How can I possibly worry about investing when I can barely put food on the table?” they’ll ask.

The answer is simple: virtually every single person has the resources with which to begin investing. It may seem impossible for some to believe, but it’s true.

If you make purchasing decisions in your home, you have all you need to begin investing. Choose some generic items instead of the brands you usually buy and start your investing with the dollars you save.

If you ever spend money on entertainment, you have all you need to begin investing. Instead of renting a DVD at the Redbox, stop by your library, check out a movie for free, and put aside that dollar you save. There are countless other little ways to shave just a little bit here and there without changing your lifestyle.

If you use electricity, you have all you need to begin investing. Air seal your home or put in a programmable thermostat and you’ll see a significant drop in your energy bill, with which you can invest.

It all starts with the littlest of of choices.

Here are five simple steps anyone can take with that savings

1. Participate in your employer’s retirement plan. More than 90% of the employers in the United States offer a retirement plan. Many of those plans offer matching funds, in which the employer will make contributions to the plan if the employee does as well. Plus, this money goes in before taxes, meaning for every dollar you put in, it reduces your paycheck by substantially less than a dollar – and it also reduces your income tax at the end of the year. If you have a retirement plan at work and are choosing not to even consider using it, you’re choosing poverty.

2. Start an automatic savings plan. If you’ve found a way to cut your spending by even a quarter a day, you have enough to start. Set up an automatic savings plan and transfer whatever you’ve saved to a savings account each week or each month. Even $10 a month – about $0.30 a day – is a great way to start, as it will add up to $121 or so over the course of a year and continue to earn interest beyond that.

3. “Snowflake” into a savings account. If you discover useful one-time ways to save or to earn a little bit more money, don’t spend it frivolously on something you want in the short term. Instead, take that little amount – the $10 you found in the parking lot, the $7 you saved buyinig toilet paper in bulk – and put it right into your savings account. Even better, just start a jar for it, throw that snowflake right into the jar, then take it down to the bank when the jar is full.

4. Save windfalls instead of spending them. What about when something bigger and unexpected comes along? A relative dies, leaving you an unexpected sum. You get a settlement. You win a large cash raffle. You win at the casino (of course, you’d be far better off just not going to the casino, but that’s another story). Sure, feel free to celebrate with a little of that windfall, but instead of blowing through the whole thing like a snowblower through powder, put most of it into your savings.

5. As your savings grows, buy a CD – and then grow from there. Once you hit your bank’s minimums for purchasing a certificate of deposit, do so. This will earn you quite a bit more interest than you were earning in your savings account, but it will “lock up” your money for a while. That’s a good thing – since you’re not intending to spend it anyway, locking it up is just fine.

Congratulations, you’re an investor. When that CD matures and you couple it with your additional savings, you may have enough to start branching into other investments. Hold onto that money – when opportunity comes your way, you’ll have exactly what you need to jump on board.

A very specific example Let’s say Margaret chooses to start saving just $1 a day for the future. Once a month, she automatically transfers $30 from her checking account to her savings account – she doesn’t even have to think about doing it.

After a year, she has $360 in savings and it’s earned a dollar or two in interest. After three years, she’ll have around $1,100. She can then buy a $1,000 CD – a long-term one that earns a couple percent more than her savings account does.

Three years later, Margaret is still just saving a dollar a day. She can buy another CD and has about $200 left over in that account.

Three years after that, all of her CDs mature. She suddenly has about $4,000 with which to begin looking into more aggressive investments if she chooses. Maybe she buys a Vanguard index fund – they have almost no fees and can easily be purchased via their website. Or maybe she feels safer slowly building her cash reserves.

All this takes is a dollar a day.

One final point Now, I’d like you to imagine a couple more things.

Imagine if Margaret is forty when she begins this plan. By the time she reaches retirement age, after saving a dollar a day, she’ll likely have an extra $30,000 for retirement. Not bad for just a dollar a day that she’ll not miss.

Imagine if Margaret is twenty when she begins this plan. By the time she reaches fifty-five, she’ll have around $50,000 in savings. That’s seed money for a new business – a perfect way to begin her second act in life.

Imagine if Margaret is a newborn when she begins this plan (with a parent or a grandparent’s help). By the time she’s fifty, she’ll likely have (well) over $100,000 built up in that account. That’s an amount that can change a life.

These numbers assume that you never snowflake and that you never sock away an unexpected windfall, either. Imagine the possibilities.

Since mid-March, the S&P 500 is up almost 58% and the Dow Jones Industrial Average is up almost as much. If you opened your retirement savings at the end of the first quarter this year and looked at the numbers with a cringe, it’s likely that if you looked at the numbers right now, you’d feel significantly better.

Why the big rebound? To put it simply, the greater world finally realized that the only thing we had to fear was fear itself. The economy didn’t collapse. Instead, we just find ourselves in the middle of – and perhaps moving towards the later stages of – a rather strong recession.

Naturally, as the economy begins to slowly come out of a recession, the stock market goes gangbusters. Companies are beginning to reawaken and slowly increase production, a radically different picture than the massive cost cutting of the past year. Unemployment is somewhat stable – it might go up a little more, but it’s no longer on the rocket ship that it once was.

In short, we’re getting through this and we see sunlight at the end of the tunnel.

What does this mean for you and me, as small individual investors? Does this mean we should convert all of our investments into stocks and ride the rocket ship?

To put it simply, no, it doesn’t.

Hedging your long-term investments on what you think the stock market (or any investment market) is going to do in the short term is called market timing, and it’s never a good idea.

My philosophy is simple, and it’s one that was taught to me by many, many wise investment writers and investment books: unless you’re a day trader or spend a significant amount of time daily studying the stock market, you’re a long term investor, and long term investors have nothing to gain from trying to time the market.

Simply put, the vagaries and complexities and huge sums dealt with on the stock market each and every day, with so much insider information floating around and individuals playing all kinds of manipulative gains, plus the total uncertainty of day-to-day world events (if you recall, for example, 9/11 was wholly unexpected), makes it a very unsafe place for the typical person trying to save for retirement or for another long term goal. Instead, their reward is to simply look at the stock market as a long term place to put their money for a long term investment with a payoff date more than ten years down the road.

It’s all about your goals and your risk tolerance. It has nothing to do with what’s going on today, tomorrow, or next week.

Don’t let yourself be swayed by huge positive returns in the short term – or huge negative returns in the short term, either. Just stay the course with what you’re doing. If you find that the stress of such swings makes you nervous, redirect your future contributions to something with lower risk, like bonds.

Otherwise, just let things ride. Tomorrow might bring a huge unexpected event that we can’t see coming – or that some CEO is keeping under wraps for now. Given time, the stock market will correct itself from that, but over the short term, it’s basically little more than gambling unless you have the time and resources to devote yourself to truly careful study – or you’re investing with a small sliver of your portfolio that’s there solely to play around with.

For many people, junk food is a serious temptation. It helps them feel a sense of comfort. It provides a quick burst of flavor. It helps them de-stress. It provides an energy boost at an opportune moment. In the short term, it’s a big gain.

In the long term, though, it’s a different story. It causes weight gain and other health problems. It can cause a negative body image and make people feel worse about themselves. Those effects cause an overall negative emotional sense, so they turn to the things that comfort them.

Many things in modern life follow that same structure: they’re nice in the short term, but incredibly painful in the long term. Credit card debt – you get what you want in the short term, but you wind up paying a ton of debt over the long term. Diapers – we use the convenient disposables for now, but later we lament filling up landfills with things that will take many, many years to biodegrade. A home mortgage – you get to move into a home, but you make huge interest payments for many years.

Again and again, humans choose to value the short term over the long term. We do it with countless daily actions each day, from the food we eat to the activities we choose to fill our time with. Our focus is on the now, not on the five years from now.

This is natural, though. Throughout the course of human history, humans have spent most of their time living a true hand-to-mouth existence. Our hunter-gatherer ancestors constantly benefitted by keeping their eyes on the immediate prize – the food in their stomach today and this winter, nothing else. Agriculture took many, many millennia to take off, and it’s easy to see why – you have to see some real success at agriculture to see it beating the benefits of picking a bunch of wild berries.

Today, though, we live in a different world. Food will be available tomorrow, but many of us still behave as though it might not be. There are thousands of apartments and rentals in most areas, but we buy a home because it fits our needs better – but our biggest “need” is simply a false sense of stability.

I do this myself all the time.

My focus is always on the short term with The Simple Dollar. I obsess mostly over the posts for the next week or so, without often worrying about anything beyond that. On the occasions when I do focus on the long term (like writing books, writing and preparing downloadables, working on projects with other bloggers, and so on), I usually find that over a longer period, I’m glad I did it.

I often try to put off meals that take a long time to prepare because, in the short term, I don’t want to make that time investment. Over the long haul, though, the great meals I enjoy and remember are often the ones I spend a long time on – the pasta made from scratch, the coq au vin cooked slowly and carefully, and so on.

Some days, I do not want to go exercise at all. It seems like a short term gain to just relax and kick back. I could read a book, after all, instead of going out there, getting out of breath, getting all sweaty, and having my legs feel like lead. If I don’t do it regularly, though, my daily life goes down in quality. I have less energy. I have less motivation to do … well, anything. I gain weight and my body image goes downhill, as does my appearance to others.

Sometimes I’m tempted to go the easy route when with my kids. Why don’t we just play in the backyard instead of loading up and going to a state park? It’s rainy – let’s just watch a movie instead of getting out all of the art supplies. In five years, though, what will have built a stronger bond with my kids? Time spent doing something adventurous and creative with their father, or time spent sitting on the couch or playing on the backyard slide?

In each case, the simple choice in the short term is far from the most enjoyable choice in the long term. However, the pain in the long term from the “easy” choice is far, far worse than the short term disadvantage.

Here’s an interesting exercise to highlight how much the phenomenon impacts your life. Spend a day thinking about what this activity will be worth to you in five years. If you eat that junk food, will the impact on you be positive or negative five years down the road? What about if you eat spinach instead? What will be the impact on you if you buy that DVD five years down the road? What if you put that cash towards your debt instead?

You make the little choices every single day to build your future. The better your choices, the better your life will be.

So, today, eat a little broccoli and save a few pennies. Over the long term, big dividends will be paid out.

A while back, I wrote about my best friend (besides my wife), John. John doesn’t spend money on frivolous things at all – he spends way less than he earns and is really careful with his money, saving up for the future. He lives in a very small apartment in a poor neighborhood, bicycles to work, and doesn’t engage in any expensive hobbies.

Until recently, he had been socking his money away in an ordinary savings account. He bought a few certificates of deposit along the way to increase his savings rate, but he was (and still is) pretty risk-averse. He had no interest in putting his money at risk.

Several months ago, he shocked me by announcing he had purchased twenty acres of undeveloped land within driving distance of Des Moines, a pretty serious investment. Given how risk-averse John was with his money, the purchase really surprised me – he never struck me as a real estate developer.

Recently, he invited my family down to the land to camp for the weekend – he had wanted to “clean it up” some before we checked it out.

We were really impressed.

It turns out that John spends many of his free evenings down on this patch of land, clearing away brush, building walking trails in the wooded area, and building a small camping area. He built a picnic table there and a fire ring and made nice piles out of the brush he had cut, perfect for small campfires.

The majority of the land is a large, fairly flat prairie, with a small creek on one edge of the land and woodlands covering perhaps a third of the land. As we hiked all over the land (with our kids in tow), John kept pointing out all of the things he had done to improve things. He had cut back poison vines here, cleared brush there, made a trail here, collected berries there, and so on.

It was obvious he was thoroughly enjoying the land.

I asked him about his long-term plans with it. He has a “ten year plan” for the land that involves starting with a large shed in which to store equipment, followed by everything he would need to put on the land for it to be wholly self-sustaining: a wind turbine or two, geothermal heating, a well, a large garden, and so on. He intends on paying for each piece with cash. Eventually, he intends to build a cabin of some sort, then a larger home after that, building as much of it himself as he can.

Even more notable, he intends to pay for every step along the way with cash.

It’s obviously going to be a good investment. A nice, self-sustainable home within driving distance of Des Moines and plenty of fairly cultivated woodlands all around will have some serious value in ten or fifteen years. If John chooses to live there forever, he’s got a great situation around himself. If he chooses to start the whole process again because he enjoys the work in his spare time, he can sell the whole thing and get started with a nice bankroll.

The real value, though, is that John is really enjoying the investment. Being outside and working on the land like this is his hobby. The cash he put into the land might return him a nice financial profit someday – or it might not. But it’s returning him a very large personal happiness return right now.

To me, that’s a great investment. I don’t care about whether he gets a 1% return or a 10% return on his money from this. What matters is that he’s enjoying that investment. It’s bringing joy into his life in a way that a chunk of money in the stock market could never do.

When Sarah and I drove away from there, we both couldn’t help but think of our dreams of owning a home in the country. While I don’t have the passion for building that John does, I certainly have a lot of passion for the natural beauty of living in an area like that, where the only houses in view are on the horizon.

The return you get from an investment isn’t always represented in dollars and cents. Sometimes an investment can return a lot more than that.

Over the last year, I’ve been gradually moving away from a paper calendar (I used a Moleskine desk diary for it) to using Google Calendar for keeping track of all of my appointments, important dates, and other such information. It’s been a slow process – I’ve been using paper calendars for more than a decade, so the transition wasn’t immediate and I often fell back to using the paper calendar.

There were several big reasons that finally made me transition completely. What I found, though, is that most of those reasons actually directly helped me manage my personal finances, believe it or not. It turned out that my money was one of the biggest reasons to finally make that transition.

Here are nine ways I use Google Calendar to make my personal finances that much easier. Many of these can be done using paper calendars, but in most cases, GCal makes it easier to do them.

1. Keep track of bill due dates
This is perhaps the most obvious use of using a calendar for personal finance. When you know a bill’s due date, add it to your calendar, then pay the bill when you see it’s coming close to its due date. So, for example, our mortgage payment is due on the 28th of each month, so on my calendar, on the 28th of each month, there’s a note that our mortgage payment is due. It helps me keep track of our payments.

How can I do this? It’s simple. Log onto Google Calendar. First, I recommend creating a new calendar specifically for bill due dates if you haven’t already – this makes it easy to highlight them. Then, click on the day the bill is due, create a new event, and add the appropriate information – the amount and the type of bill, at the very least. If this bill recurs on a regular basis, make the bill a repeating event. You might also want to add an event reminder so you’re emailed a few days in advance of the bill due date.

Free from Broke offers a nice visual guide to adding a bill due date to your calendar.

2. Plan ahead for gift-giving occasions
My family has always been really into gift-giving and it’s considered a serious faux pas to forget someone’s birthday. In order to make sure I don’t forget a parent or a niece or a nephew, I schedule all of those important days right into Google Calendar.

How can I do this? I use almost exactly the same technique as for the bill due dates. I have an “Important Personal Days” calendar and I add birthdays, anniversaries, and the like to that calendar, scheduling them to recur every year. I also have two email reminders for each one – one about twelve days in advance, and another about five days in advance.

3. Pencil in key dates for sales
Let’s say I’m shopping around for a washing machine, and I’m looking for the best deal I can get. I discover that the local appliance store is having a sale on washing machines next month and given that their prices are already decent, I want to take a look at their numbers. But I might forget the sale! Not any more – I just pencil in the dates of the sale in the calendar, reminding me to check out the sale during that time frame.

This works for any sale that you come across. But, as with any sale, it’s important to distinguish between buying something because it’s on sale (bad) and buying something you already need and taking advantage of a sale to do it (good).

How can I do this? Again, this is just a simple scheduling of an event, except that I set the event as a multi-day one, with the start date and the end date matching those of the sale. Since this isn’t too regular, I have a “Miscellaneous” calendar where I put such events.

4. Keep track of milestones for big goals
As I’ve mentioned a few times on here, I have a handful of pretty big goals: finishing my second book (here’s my first one), running a 5K, and saving for a van. For each of these goals, I have some milestones along the way. I try to make my best attempt at a 5K each week, for one, and I have a word count goal on the first draft of my book each week, too. So I schedule these milestones. I just create an event each Friday saying something like “Book word count target: 30,000.” On Sundays, I have a “Walk/run your best 5K” penciled in.

How can I do this? Just pencil in your milestones whenever they occur. I have a “Goals” calendar that I put these under. Why so many calendars? It allows me to make groups of things appear and disappear at will when I’m looking at the calendar, which makes it very easy for me to keep track of what’s going on.

Dal, Chilean style, with chickpea curry, which I discussed in this earlier article.

5. Schedule meal plans intelligently
Remember my post about making multiple casseroles? As I mentioned there, it’s usually worthwhile to eat those casseroles within two months or so. So, in that example, I made four casseroles on a Thursday afternoon. We ate one that Thursday night, then I actually scheduled the casserole again for three weeks, six weeks, and nine weeks later. Then, when we sat down to plan for the week, my calendar would show me that we already have a meal in place for one night that week, meaning we can plan for fewer meals and save money at the grocery store.

If you do these in multiples, it gets really neat. Let’s say you cook six pounds of chicken breasts on a Tuesday in a slow cooker and freeze four and a half pounds of them. You’ll want to use these within a month or so, so I’ll mark down the following Tuesday, the Tuesday after that, and the Tuesday after that that we have 1 1/2 pounds of cooked chicken that need to be used. This keeps us from “wasting” food in the freezer. You can do the same thing with any frozen item you buy in bulk – for example, we often buy beef in bulk from a local butcher because of the quality and low prices, so in order to avoid freezer burn, I’ll pencil in when we should use the meat. Again, having this information right there drastically reduces our grocery bill and fits in perfectly with planning ahead for meals, which is itself a huge money saver.

How can I do this? I use a “dinner” calendar to manage these things. I just create recurring events for both of the cases above, and when we plan meals once a week, I create events with what we plan for meals those days. I usually label any ingredients we need to use by saying “Ingredient: ” right in the name of the event. That doesn’t mean that we’ll use the ingredient on that exact day, but it works as a reminder when I sit down to exactly plan meals that we have, say, chicken breasts to use that week already in hand. I schedule a meal each night and include the recipes in it – we even usually pencil in a “leftovers” night about every third or fourth night. This really works well.

6. Plan ahead for scheduled maintenance
Home maintenance saves you money, period. Taking a bit of time on a regular basis to do things like change furnace filters, check fire alarms, check vents for clogging, and so on can make an enormous difference in the life of your appliances, the appearance of your home, and the energy efficiency of your home.

I speak from experience here. When we first moved into our home, we didn’t realize that our dryer occasionally ejected a very small amount of lint into the ventilation, which led directly outside the house. After several months of use, our dryer seemed to not work very well. We had to run it two or three times to dry a reasonably-sized load. We puzzled over this and considered calling a repairman, but my two year old son actually figured it out. He came walking over to me with some lint in his hand one day. I asked him where he found it and he walked me straight to the vent. A few finger sweeps later and the dryer suddenly ran as good as new.

The problem is remembering the numerous little home and auto maintenance tasks you need to take care of. The solution? A home maintenance calendar, which tells you when you need to change filters and when you need to do a walkthrough to check on things – and, yes, when you should check vents. I made a big list of home and auto maintenance tasks – picking out the ones you use and scheduling them can save you some serious change over time.

How can I do this? Again, with a “maintenance” calendar. These are almost all recurring events on different schedules – some every month, some every three months, some every six months, some every so many weeks (so that I don’t have days LOADED with tons of such tasks). If I see some maintenance tasks for that day, I just do them and then I know that things are being maintained.

7. Take control of your portfolio planning
I often encourage people to just put their retirement savings in a “target retirement” fund and just forget about it, but many people like to have more control than that. They want to balance things themselves. Perhaps they want more risk than those plans give, or maybe they want less risk. They might also want low risk investments in their retirement accounts but very high risk investments in their taxable accounts.

Either way, rebalancing those investments regularly is key. On a regular basis, it’s important to sit down and think about whether or not your investment allotments match up with what you really want to be doing. You might change your contributions significantly – or you might even actually move your investments around.

It’s important to do this regularly, and that’s what a recurring event is very useful for. I “rebalance” every three months or so, mostly by just altering my contributions. I’m fine with using a “target retirement” fund, but I actually enjoy digging in and tinkering with things myself.

How can I do this? If you’re involved enough in your investing to rebalance it regularly, just set up a recurring event with a reminder of what you want to be doing, as a note. So, you might have a “Rebalance my Roth IRA” event, with a note that says “I want to have 10% in this fund, 20% in this fund, 30% in this fund, and 40% in this fund.” I actually keep mine on my “maintenance” calendar.

8. Set up seasonal reminders
Different times of the year bring different things we should think about with our personal finances. Charles Schwab has a very useful article listing many of these seasonal concerns, some of which may apply perfectly to you.

Some things we all might want to do: get a copy of our credit report every four months from the FTC at AnnualCreditReport.com (you get one from each of the three agencies each year for free, so just get one from one agency in January, another from another agency in May, then again in September), start budgeting for the holidays in the spring or summer, plan seasonal charitable giving or volunteer work, and so on.

How can I do this? I put these in my “miscellaneous” calendar, but many of these are recurring. For example, I remind myself a few times during the summer to look for Habitat for Humanity dates, and I also prod myself regularly to put aside money for and shop ahead for Christmas. I also snag my credit report like clockwork and I also remind myself to occasionally touch base with my parents about their financial needs (a will or a master information document or anything else like that).

9. Remind yourself of the things that really matter
If you’re putting forth this effort into saving money, you ought to be doing it for a great reason. For me, my children are my big motivation – I want to make a truly great life for them. Of course, a great life means that I spend a lot of quality time with them, so I plan ahead for that. Aside from the “evening block” that’s devoted every day to family time, I often pencil in other events. Some of them are known – soccer practice and the like – but others are surprises, like whisking my kids away for a long afternoon at the Science Center of Iowa or going to story time at the library.

Make sure you’re taking time out for the things that actually matter in your life. It’s easy to see the big reasons before we get started, but often when we’re involved with projects and get so drawn in, it’s sometimes hard to remember to take time for the reasons why we’re doing this.

How can I do this? I have a calendar called “Family” where I schedule things like this. When I look at the week ahead and see a trip to the library or a trip to the Science Center or something like that, I feel like my week is more … complete.

An effective calendaring system has almost unlimited uses. Just remember that it’s a tool – the calendar doesn’t have meaning, your life does.

About a week ago, I challenged my followers on Twitter to give me their best single piece of money advice in ten words or less.

I was flooded with responses.

After spending quite a bit of time sifting through them, here are the fifty best pieces of advice that came my way (out of well over a hundred – I actually used a spreadsheet to help me figure out the best ones to include). All of these are stellar money tips – and all of them come in with ten words or less. Enjoy.

writealvaro: Don’t invest in what you don’t understand.
mmmeg: I only need one word! ASK!
The_Weakonomist: index emergency fund to unemployment. 9% = 9 months.
MichaelBRubin: Spend more time, less money.
fiscalgeek: The secret to money management is learning to be content.
pearbudget: Know what really matters. Don’t spend money on other stuff.
creditgoddess: Don’t borrow more than you can repay.
dgstinner: A fool and his money are soon parted
jacobmlee: Be mindful of how you spend money.
JoeTaxpayerBlog: Don’t walk away from 401(k) match, regardless of debt situation.
EdenJaeger: Live below your means and save all you can.
tonyblacknyc: Better to sell a little early than a little late.
Kplavcan13: Pay yourself first, you can’t give yourself a bill.
dweliver: Be content with what’s yours and you’ll always have plenty.
centsiblelife: Spend less than you earn. Earn more.
MoneyEnergy: Don’t save at 2% when you’ve got debt at 10%.
thefinancialqb: If you try to get rich quickly, you will go broke fast.
ObliviousInvest: Diversify. Minimize costs. Stay the course.
Matt_SF: Borrowing money for a depreciating asset is a fool’s errand.
benburleson: If you can’t afford it, don’t buy it.
mapgirlsfc: Save regularly and spend less than you earn.
jj_observations: Learn to love left-overs!
tusharm: Don’t spend money that you don’t have.
danielckoontz: Never reach for yield.
randypeterman: “Where will you & your stuff be in 100 years?”
Cat8040: Don’t take on debt.
KasyAllen: Don’t be afraid to ask for the savings!
nhldigest: Best money advice “Don’t Spend More Than You Earn”.
Green_Panda: My advice: Change one money habit at a time.
MoneyEnergy: Don’t count all your chickens before they’ve hatched.
fcn: Save and invest for the long term.
MyLifeROI: If it depreciates, don’t pay interest on it!
jessw61: Save/invest as much as you can.
Lisa_S_47: working hard doesn’t mean you deserve anything you can’t afford.
mtswartz: I’ll do it in two: Spend Less!
GlennLucas: Prevent your government from bankrupting your nation.
myfindependence: Be thrifty but don’t forget to enjoy yourself
spendingsmart: You can’t outearn dumb spending.
randallkirsch: A penny saved is more than a penny earned.
Grumpicus: Use credit cards, NOT debit cards.
flexo: The only one who cares about your money is you.
ceetastic: Before purchasing, I ask myself, “Can you justify the expense?”
moneyhighway: Money comes and goes the memories stay
robertsm85: If you don’t have the money then don’t spend it.
roryboy: if you need to use plastic, you can’t afford it!
msimonkey: Keeping up with the Jones’s is plain stupid.
maverickstruth: Know what comes in, and what goes out.
crazy_eddy: Let your assets buy your toys.
sfordinarygirl: Buy generics/private label because it’s way cheaper
jasonbob7: One word: leftovers!

Now, how about you? What’s the best money advice you can give in ten words or less? Leave yours in the comments!

One aspect of buy-and-hold investing in low-cost index funds that has always attracted me is that there is an extremely low time cost. Once you have the initial investments in place, there is virtually no time cost at all. All you have to do is invest maybe half an hour a year rebalancing the investments – and that’s it.

That strategy pretty much matches the stock market. In fact, if you choose to just invest in the Vanguard 500, it almost exactly matches the ups and downs of the S&P 500 stock index.

Let’s look at the other side of the coin. Let’s say you’re following normal stock picking advice. You have a portfolio of 20 individual stocks (so that no piece of your portfolio is more than 5% of your total investment – diversification, after all). You devote an hour a week to studying each stock in detail, so you know what’s going on with that company. You also devote five hours a week to finding new, worthwhile companies to invest in, potentially replacing the slots in your portfolio.

You’re able to invest $10,000 a year – and we’re not worried about brokerage fees at all. What’s your earnings per hour doing all that research?

Let’s say all that work manages to beat the Vanguard 500 by 1% per year. Historically, VFINX has returned 9.56% per year since its inception (remember, that number includes dividends and stock price increases and decreases, and it does include 2008), so we’ll use that number as an annual return baseline.

Over a ten year period, VFINX would turn your $10,000 a year into a sum total of $170,968.66. Meanwhile, that portfolio that beats the S&P 500 by 1% would turn $10,000 a year into a sum total of $181,005.77. Your extra effort of 25 hours a week for ten years has earned you $10,037.11 during that period – an hourly wage of $0.77. Ouch.

“Come on!” you say. “Stocks are a long term investment!” So let’s look at the thirty year mark. Over a thirty year period, VFINX would turn your $10,000 a year into a sum total of $1,061,590.42. Similarly, your 1% better investment portfolio, with 25 hours a week over ten years invested in it, will turn that annual $10,000 into $1,347,885.59. Your extra effort of 25 hours a week for thirty years has earned you $286,295.18 – an hourly wage of $7.34. Congratulations, your investing expertise has earned you minimum wage.

“Come on!” you say. “I can do better than 1% over the S&P 500 every year for thirty years!” (Of course, if you actually believe that, I have a bridge to sell you.) So let’s make it 2% – you beat the S&P 500 by 2% every year for thirty years. Your extra effort for 25 hours a week for thirty years earns you an hourly wage of $16.60.

If you have the intellectual ability to do enough rigorous analysis to beat the market by 2% year in and year out, you can most certainly be earning more than $16.60 an hour with your time.

But what if you can invest more than $10,000 a year? If you’re in that group, where you’re able to invest significantly more than $10,000 a year in whatever you want and you’re sure you can beat the market consistently over the long haul, by all means, choose the route that’s right for you. However, I argue the statement above still holds – with those kinds of resources and intellectual acumen, you likely have better ways to earn money.

Here’s the take-home message: individual stock investing, done with adequate research, is a lot of work. Unless you have a very large amount to invest, the extra work is simply not worth it in terms of the extra income per hour.

Now, that’s not to say that you shouldn’t dabble in individual stock investing. I see nothing wrong with taking a sliver of your investments and playing the market, so to speak. However, recognize that such investments are largely a gamble unless you do adequate research. And, if you do adequate research, you have to blow away the overall market to make it worth your time.

My conclusion is simple. If you’re an individual investor without a ton of money to invest, it’s simply not worth your time to chase individual stocks. The time that’s required to adequately study individual stocks and build a truly diverse portfolio will make the gains small enough per hour of your work that you might as well do something else with your time, like build your skill set for your career, improve your health, or start your own side business.

Instead, just invest in a very broad index fund and ride the market at a low price with little time investment of your own. Better yet, do it with a balanced portfolio – don’t put it all into stocks, so that you can ride through the down markets with less worry and smaller losses.

One of the best personal finance articles I’ve ever read is Snowflaking: A Primer, at I Paid For This Twice Already. Here’s an excerpt so that you get the idea:

Snowflaking is a spinoff of the Snowball approach to debt reduction popularized by Dave Ramsey. With the Debt Snowball method, you figure out what amount you can pay to debt every month, and then you keep paying that amount, even as your debts shrink and your minimums get smaller. To implement it, in a nutshell, make a list of all your debts, order them from either smallest to largest or highest interest to lowest interest (that is a debate in itself), and you focus all extra money above the minimum payments on a single debt (either the smallest total or the highest interest, I use interest order). As you eliminate debts, you apply the payment you were making to that debt to the next debt in line until the snowballing effect of decreasing minimums and increasing amounts applied to particular debts eliminates all the debts on your list.

Well, what are snowballs made of? Snowflakes! I have a set amount I pay to debt without fail every month that is above my minimum payment due (about $800). On top of that, I also try to collect up little bits of money wherever I can and I apply those as well to my top priority debt as immediately as possible. I take surveys online, I sell possessions on craigslist and ebay, I have yard sales, and any money I get from these endeavors goes directly to my debt. I also keep a very strict accounting of all the money that comes in every month and what I spend and everything left over at the end of the month not earmarked for future expenses also goes directly to debt. These are my snowflakes. I have averaged over $200 extra going to pay down my credit card debt every month due to these snowflaking efforts.

Many small snowflakes make a snowball, and no amount is too small for me to snowflake. I used to pay my credit card directly every time I collected a snowflake through their online interface, but now that I have moved my credit card debt to another card with a 0% interest offer, I collect the snowflakes and pay them once per week (I am limited to the number of payments I can make to this card a month). If you are able to and your debt is not at 0% interest, I highly recommend the “pay snowflakes immediately” method. The faster your balance is reduced, the less interest you will accrue.

Snowflaking is, quite simply, a great way to get aggressive with your debts. It gives you a little extra push towards achieving your goals. Even better, you can also “snowflake” towards any savings goals you might have.

Don’t know how to get started? Here are 15 ways you can get snowflaking going in your own life. These are low-impact ways – far from starting a side business – to earn a few bucks without devoting countless hours to a major project, things that sync very well with what you already do or can be picked up whenever you feel like it.

Have a yard sale. Go through your house, identify the items you don’t use much, and sell them. Put them out for sale in your yard over a weekend (with reasonable prices) and put that money straight towards your debts or other goals.

Keep your aluminum cans separate. In Iowa (and in many other states), there is a nickel “deposit” that one pays for each aluminum can (or bottle) purchased. Keep these cans and bottles separate from other trash, then occasionally return all of them for $10 or so. It helps the environment and gives you a bit of snowflaking cash.

House-sit. If someone you know goes on vacation, offer to house-sit for them, look after their pets, and so forth. It’s pretty easy work and can earn you some quick cash to knock down some debts.

Walk pets. If you already walk your own pet in the morning, it’s not much of a stretch to stop by another house or two, pick up their pet, and walk that pet as well – for a fee, of course. Put that fee straight towards your financial goals.

Blow snow. Got a snowblower? You’ll be blowing the snow from your own lawn anyway, so why not set up an arrangement where you’ll blow the snow from your neighbors’ driveways and walks for $10 or $20. Then, take that cash and put it towards your goals.

Eat a “free” meal. Freeze your “utility” leftovers, then make a meal out of them once in a while – mix your leftover rice, vegetables, and chicken pieces to make a “free” meal. That’s worth $5, easy, so just snowflake $5 when you do it.

Take surveys. It’s a great way to make a few bucks at your computer while watching a TV show or a movie. It’s not a great money maker, but it’s low-intensity and can be done whenever it fits your schedule.

Mow lawns. Got neighbors who can’t mow very often? Mow their lawn whenever you mow theirs for a few dollars. You’ve already got the mower out, right?

Write. You don’t have to start a blog and post regularly (though there’s success to be found there, too). Instead, just write articles and submit them to services like Associated Content or make “lenses” at Squidoo. It’s a great way to burn an hour or two on a lazy evening and earn a few bucks in the process.

Do simple tasks. Amazon’s Mechanical Turk will pay you a few cents for a mindless task that just takes a few seconds. One of my friends does this on her laptop during commercial breaks when she’s watching a television show and makes enough to cover basic cable.

Babysit. If you already have kids at home, put out your shingle as a babysitter. Most evenings, you’re already at home, so you’ll be getting paid just to mind another little one around the house. I know several people who do this.

Deliver groceries. If you know of any elderly folks or shut-ins who have difficulty getting out to buy groceries, give them a ring whenever you shop and offer to pick up what they need. They’ll often pay you several dollars extra for the service (and even if they don’t, it’s a great way to help someone in need).

Make crafts. Many people enjoy some sort of craft as a hobby. Create projects that reflect the best of your work, then sell them on sites like etsy. Anything from knitting to woodworking to scrapbooking to jewelry making can make you a few dollars in your spare time.

Be a “search guide.” If you’re just browsing the ‘net, why not help others find what they’re looking for online and make a few bucks? Cha Cha does just that – people send text messages to the service with questions, they pop up on your computer, you figure out the answer, send it back, and earn a bit to throw towards your debts.

Give charitably. Give what you can to charities – goods and other donations. Then, when you get the receipts for tax deductions, figure up how much you “get back” on your taxes and contribute that to your debts.

Good luck!