I started investing when I was 13. I learned about compound interest at school, and I figured that I would become a millionaire if I could just invest my entire life savings ASAP.

Initially, I looked into the stock market but heard only reports of doom and gloom thanks to the dotcom bubble.

In retrospect, the crash would have been a great time to invest (with help, of course), but I had the attention span of a flea (or a 13-year-old girl who needed to get back to her computer), so I asked my dad.

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My dad and my grandfather (both experienced real estate investors) were buying land that was available for commercial development, and they welcomed me in with a 3 percent share (equivalent to my life savings of $3,000).

Less than three months after we bought the land, the city closed off the road access to my beloved investment, which rendered it worthless. No, wait — it’s less than worthless because I still have to pay property taxes on it every year.

Buying that land was a bad investment, but I hate to say that it’s not my worst ever.

Steps to Become a Seasoned Investor

We spoke with a seasoned CFP, Dennis McNamara, to determine what you need to do in order to become an investor that's prepared for any contingency.

1. Have an Emergency Fund Ready Before Ever Making Your First Investment

The last thing you want as a newbie investor is to sell out of a newly purchased investment because you were hit with a curveball expense.

Have at least three to six months’ worth of living expenses set aside before even thinking about investing in the stock market.

2. Live Below Your Means and Invest the Difference

For a young investor, decades away from retirement, saving/investing at least 15 percent of your gross salary can help you fund an adequate portfolio.

No amount of fancy investing can make up for a poorly funded portfolio. Contrarily, an adequately funded portfolio can make up for a plethora of investing mistakes.

3. Don’t Try to “Time the Market” and Avoid Exotic Investments

Though mass media and television may give off this perception that investing requires impeccable timing and finding the next hidden gem of a company — both of these are flat-out wrong!

4. Systematically Invest in (Boring) Index Funds

All investors, experienced or inexperienced, should keep it simple. This can be considered “boring” because there is no guessing about when or where to invest.

A portfolio compiled of low-index funds is a firm foundation for a newbie investor.

5. Take Advantage of Retirement Accounts

There is a lot of hesitation from young investors to access their retirement accounts out of fear that they won’t have the funds later down the line.

The reasons to utilize it, however, are compelling: lowering your taxes, boosting your return on investments, getting a head start on your estate planning (via beneficiary selection), and, in most states, protected retirement assets from creditors.

That would be the condo my husband and I bought at the height of the housing market bubble. Between home improvements, homeowner association dues, mortgage interest, and the decrease in value, we lost nearly $40,000 on that unit before we were finally rid of it.

And then there was my foray into individual stock picking and volume trading, which mercifully lasted only a year before I lost a few thousand dollars, and learned about portfolio management, asset allocation, and risk tolerance.

You see, when it comes to investing, I’ve made tons of mistakes. I’ve lost plenty of money. However, my mistakes are a small price to pay for an early financial education.

Thanks to my bad investments, I know something that most investors never learn. Investing is hard.

It’s hard to stick with an investing plan when you aren’t committed to your goal. It’s hard to shy away from attempts to beat the market. It’s hard to predict the next market correction and to be reasonably certain that you’re getting a good deal. It’s especially hard to admit when you’ve made a poor investment and need to cut your losses.

Even more, it’s hard to be greedy when others are fearful, and fearful when others are greedy.

It’s hard to develop an investing strategy that doesn’t waver while the markets and your own emotions waver. It’s hard to admit that you’ll make more mistakes.

However, none of this should stop you from investing. It doesn’t stop me.

If anything, these hard facts helped me get back in the saddle after each investing failure. They led me to learn about the intersection of financial markets and emotion. It’s how I stumbled across concepts like modern portfolio theory, disciplined investing, and index investing, which have shaped the investor I’ve become.

I’m not an expert investor, but over time, I’ve become more philosophical and more goal-oriented in my strategy.

I’ve committed to take what the market offers and to act as a buy-and-hold investor. I’ve learned that constantly switching strategies is worse than sticking with a strategy that was a loser this year.

Even in my state of relative maturity, I find investing hard. I don’t find it difficult to create rules that should maximize long-term, risk-adjusted returns, but I do have trouble following my own rules because it’s nearly impossible to predict how I will react emotionally to changes in my circumstances.

For me, investing is hard, but it’s also worthwhile.

It’s worthwhile for me to know that I’m doing what I can to set myself and my family up for long-term financial success. It’s worthwhile to know that, given a long enough timeline, even mediocre investors can become wealthy.

Learning to invest doesn’t yield an immediate sense of financial peace like paying off debt or learning to budget. Rather, learning to invest helped me to connect my actions today to my opportunities tomorrow.

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