Rule of 72

The rule of 72 is very important to you as an investor.

It works like this; take your expected rate of return, divided into 72 and the result will be the amount in years for your money to double.  This is an approximation but its pretty close, certainly close enough considering all the other variables.

An example would be an expected return of 8% will mean your money will double in 9 years.

This is very important because I think that far too many investors expect their money to do too much and thus take on far too much risk which they regret later on when its obviously too late.

Remember that to double your money in say 4 years will require a 18% return which means you will have to take on massive risk.

Think logically like your friend Einstein there.  What kind of investor do you think he'd be?

Cash is ok

There are plenty of types of investments; stocks (either individual or through mutual funds or ETF's), bonds, real estate and commodities such as gold, silver and oil.  There are others too like art, coins, etc.

One investment or asset class gets very little attention and is rarely mentioned - CASH.

The reason cash isn't mentioned very often unless it is to malign it, is because your stockbroker does not get paid when you have cash on the books.  

Whether you pay commissions per transaction or are in a fee only account, cash pays your stockbroker, financial advisor or financial planner absolutely nothing which is coincidentally why you receive calls and emails to invest that money now.

Cash is ok, especially when you aren't comfortable buying into the market.  

Sure cash pays virtually nothing these days but its better than losing and there is something to be said for sleeping at night.  I remember telling clients that if they are losing sleep that they own too much stuff.