You’ve got some money and now you want to make it work for you. Congratulations! You’re now on the path toward financial independence and peace of mind.

With such a lofty goal as retirement ahead, what kind of investment is best? Real estate? Stocks? Bonds? Dividend-paying stocks with blue-chip companies like Coca-Cola?

You don’t have to be Warren Buffett to make smart investment decisions. Aspiring investors should seek out simple strategies that are almost guaranteed to preserve capital and generate some interest income. Finding the money to invest is hard enough; why make it more difficult by turning your money over to a broker who will use complicated hedging techniques, traders who will attempt to time the market, or a mutual fund that charges high fees?

Simple investments are boring, but they make sense if you don’t want to risk what you’ve already earned. Think of your bank account as the foundation of your investment portfolio; using it as such allows for more aggressive investing elsewhere. Savings accounts should be used as a financial cushion, not as your means of making money.

As an individual investor, you don’t have to worry about such things as where the markets will be in 2020 or how interest rates will affect your portfolio’s value. You just need to find some worthwhile investments that won’t lose value over time and keep some cash on hand for emergencies.

If you’re just starting out, here are some of the most important things to consider when making your investment choices.

Keep Costs Low

Financial success is largely a product of minimizing fees and trading costs. Even seemingly small charges can add up over time. Trading frequently in an attempt to beat the market can have serious financial consequences by erasing your gains.

If you invest in individual stocks, trade through a deep discount brokerage that doesn’t charge fees to buy or sell. If you’re not interested in spending hours researching companies, index mutual funds are the cheapest way to invest. Index funds generally have expense ratios below 0.20%. You can buy share classes that have expense ratios as low as 0.07% with a $25,000 investment minimum.

Availability of Funds

Finding money to invest shouldn’t be difficult if you have a steady income and live within your means. You may not want to pinch pennies until they hurt, but it doesn’t make sense to save for retirement by socking away the same amount every month if it could cut into your lifestyle now . With that in mind, you should consider how much capital is available before making investments.

If you are debt-free besides your home, then you can afford to take more risk because your net worth won’t disappear if the market goes haywire tomorrow. If you’re net worth is negative or near zero , then play it safe at first because any drop in your investments will be magnified.

Don’t let fear of another market crash like the one in 2008 prevent you from investing, but do use it as a reminder that stock prices can go down as well as up. If there’s not much money available to invest, then focus on risk-free strategies until you have more cash. Once you’ve built up some savings, you can take more risks with your extra capital .

Low Volatility

Investors want their portfolio to grow practically overnight without any additional effort or action on their part. Unfortunately, there are no easy answers or quick results when it comes to investing . Investments that offer high returns over time generally involve taking more risk. To guard against this possibility, low volatility should be a primary concern.

Government bonds, Treasury inflation-protected securities (TIPS), and bank CDs are all investments that offer a fixed rate of return over a set period of time . Their prices won’t be affected by market fluctuations , but they also won’t generate stellar returns. If you don’t mind earning 1% interest on your savings every year , then buy these types of investments instead of stocks or mutual funds to make money from dividends or price appreciation.

Laddering CDs is another way to reduce volatility while investing in safe securities . Laddering involves buying multiple CDs with different maturity dates so that part of the portfolio matures every year . The strategy offers almost as much liquidity as a savings account, while protecting against long-term capital losses.

Stocks Aren’t the Only Wealth-Building Investment

You might be surprised to learn that most Americans have less than one month’s income saved for emergencies. That’s why cash is an important part of any investment portfolio . Even if you’re saving money for retirement, you should have some emergency funds set aside in case your income suddenly stops or you lose your job.

If a low-cost index fund isn’t yielding enough interest for you , then consider a high yield savings account instead. For example, EverBank pays 1.21% interest on its Yield Pledge accounts . To get this rate, clients must maintain a minimum average daily balance of $5,000 over the entire account term . There are several other banks that offer higher interest rates for their savings products, but you can get started with EverBank or another institution.

Another way to make your money work harder for you is by investing in stocks outside of the U.S. The MSCI EAFE (Europe, Australasia, and Far East) Index tracks non-U.S. developed markets . These companies are based outside North America and include Europe , Australia , New Zealand , Hong Kong , South Korea, Singapore, and Taiwan .

The MSCI Emerging Markets Index focuses on investments in developing countries like China, Brazil, Chile, Colombia, Hungary, Malaysia Mexico , Russia , South Africa , Taiwan , Thailand , Turkey , and many others . There are opportunities to do well if you go beyond the U.S. market, but it requires more work and research to know which companies to buy.

Successful Investing

The best way to achieve financial freedom is through constant growth of your assets . For you to accomplish this goal , you need a well-designed plan , the discipline to stick with it, and an understanding of how everything works . Fortunately, over time you will learn the rules of investing while applying these principles in real-world circumstances that involve money . Successful investors are just people who followed certain procedures before making decisions about their money.

There are many other things that can be done to improve your chances for long-term financial success , including starting early, diversification , dollar cost averaging , rebalancing your portfolio , and avoiding debt when making an investment . These are things that anyone can do to set themselves up for the future, but they may need someone qualified to help them with these ideas.

The best way you can learn how not to lose your money is by studying the mistakes of others . There are many case studies on investing in books, magazines , movies , documentaries, television shows , and even comic books . So there’s no excuse for being ignorant about what can happen when people make bad decisions with their investments.