36-year-old self-made millionaire: This is 'my No. 1 investing philosophy'—it's 'a great way to get started'

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Tess Waresmith learned about investing the conventional way - through trial and error.

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Investors hold a majority of their assets in real estate, stocks, and cryptocurrencies.

For those looking to mirror his investment success, Waresmith advises beginning with straightforward investments and gradually expanding into more complex opportunities.

"My No. 1 investing philosophy is education is key - always learn as much as you can about any investment you're considering and spread out your investments," she says.

Here's what she means.

Begin with index funds and diversify your investments.

Waresmith started by putting money into index mutual funds and exchange-traded funds, which still make up the majority of her stock investments.

for two reasons.

They're budget-friendly. Since these funds only aim to track the performance of a specific market index, they don't need to hire an expensive manager to oversee the portfolio. As a result, investors only pay a very small fee – sometimes as low as 0.03% of their assets – each year.

Additionally, these funds are a straightforward way for new investors to get connected to a vast portion of the stock market. For example, buying a "total market" fund lets you have access to 95% of the U.S. stock market.

The argument in favor of spreading your investments across a wide range of assets is straightforward. By diversifying into many different investments, you can minimize the impact of a decline in any one investment on your overall portfolio.

Index funds are an excellent way to begin and grasp the fundamentals of the stock market and have your money invested in a truly diversified and low-cost manner," says Waresmith. "Once you've accomplished that, I believe it's an ideal starting point to continue learning.

Waresmith's investments beyond the stock market often include real estate, but you don't necessarily have to buy property to add some variety and diversification to your portfolio.

If you have a solid portfolio and you're looking to set aside some money and learn, there's a lot of potential value in education," Waresmith says. "I've never advised against considering other investment opportunities beyond index funds. You just need to understand the potential risks.

You should only put as much into investments that could produce bad results, so you can afford to lose it if they do.

I mostly invest in index funds, but I do have a small share in cryptocurrency and occasional individual stocks or market-focused ETFs," Waresmith says. "I'm interested in women's health ETFs or cannabis ETFs, and so I invest a smaller portion in those.

The more knowledge you gain about the various facets of the market you're interested in, she says, the better off you'll be. Just be sure to establish a solid foundation initially.

"Expanding into more daring investments is not something I would typically recommend for someone just beginning their investment journey," she says.

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