The more you save and invest, the better chance you have of meeting your financial goals. Investment Strategies for Beginners is different from saving in that it allows you to grow your money over time through higher rewards for taking on more risk than a savings account. This type of investing can help you grow your income, increase your purchasing power and keep pace with cost-of-living increases.

But with so many investment strategies to choose from, and a dizzying array of advice from one-trick TikTok videos to dense tomes only accessible to finance doctorates, it can feel daunting to even get started. The truth is that successful investing doesn’t require complicated math skills, a TikTok account or a finance degree. By following a few key investment strategies, beginner investors can lay a foundation for long-term success.

Investment Strategies for Beginners: Setting Up a Solid Foundation

The first step is to thoroughly assess your financial situation and determine your investment goals. It’s also important to understand your risk tolerance, which refers to how much risk you’re willing to take in exchange for potentially higher returns.

Depending on your risk tolerance, you may want to diversify your investments by investing in a variety of asset classes. These include stocks, bonds, real estate and commodities. Stocks, or equities, are shares of ownership in a company that can be purchased and sold for cash. Bonds, which are loans that pay interest to investors, come in a wide range of options, from corporate and high-yield to municipal and mortgage. Real estate offers the potential for steady cash flow and a growing equity position.