13 Steps to Investing Foolishly

Welcome!

The prospect of changing your life with a full 13 steps could sound a bit daunting. But don't hit the "back" button just yet. We've prepared this executive summary just for you Fools on the go.

Motley Fool Co-founders, Tom and David Gardner
Step 1

Change Your Life With One Calculation

Our nomination for the eighth wonder of the world goes to… the formula for compound interest! Quite simply, this basic… more »

Step 2

Trade Wisdom for Foolishness

Who would deign to call themselves a “Fool”? Certainly not anyone from the world of Wall Street. We, on the other hand,… more »

Step 3

Treat Every Dollar as an Investment

Imagine what it feels like to know that every single dollar decision you make is the right one. Imagine no more. With a… more »

Step 4

Open and Fund Your Accounts

IRAs, 401(k)s, CDs, MMAs, oh my! Here are step-by-step directions on what to put where and, roughly, how much and for… more »

Step 5

Avoid the Biggest Mistake Investors Make

Fools are investors, not speculators. We’re buy-to-hold, business-focused investors with a long time horizon. Our… more »

Step 6

Discover Great Businesses

Stocks aren’t pieces of paper, but stakes in a living, breathing business. Fools look for well-managed companies… more »

Step 7

Buy Your First Stock

You’ve paid off your credit cards, open and funded your brokerage account, and done your research. It’s business time!… more »

Step 8

Cover Your Assets

Don’t forget the Fool’s four rules for asset allocation: Don’t invest money that you’ll need in the next year, invest… more »

Step 9

Invest Like the Masters

There’s more than one way to skin a cat. Growth guru Peter Lynch, value kingpin Warren Buffett, and global maven Sir… more »

Step 10

Don't Sell Too Soon

Selling a stock is just as big a decision as buying. There are five primary reasons to cut bait with a stock: You find… more »

Step 11

Retire in Style

Retiring in style rests on making the most of tax-advantaged savings vehicles like your 401(k) and IRA, investing in… more »

Step 12

Pay It Forward

Foolishness doesn’t stop with you, friend. Pass on the good money-saving/money-making mojo to three friends who could… more »

Step 13

Make friends and influence Fools.

The Motley Fool isn’t some static web page or a set of articles, but a dynamic, thriving community of Fools just like… more »

Basic Investing Terms

  • Market capitalization

    Market capitalization, also called market cap, is the overall price of the company as measured by… more »

  • Financial statement

    The financial statements include the Income Statement, Balance Sheet, Statement of Shareholders'… more »

  • Cash flow statement

    A company's cash flow statement provides an overview of all cash-related activities for a given… more »

  • Earnings per share

    Earnings per share is the company's total earnings or net income divided by its shares outstanding.… more »

  • Income statement

    The income statement tracks a company's revenues, gross profits, operating income or loss, and net… more »

  • Operating margin

    Operating margin is defined as Operating Profit divided by Revenue (or Sales). more »

  • Free cash flow

    Free cash flow is the cash a company produces from its operations less the cost of expanding its… more »

  • Dividend yield

    Dividend yield is simply the annual dividend divided by the current share price, expressed as a… more »

  • Balance sheet

    The balance sheet is one of four financial statements. It shows the financial position of a company… more »

  • Gross margin

    Gross Margin or gross profit margin is gross profit divided by revenue (or sales), expressed as a… more »

  • Stock split

    A stock split simply involves a company altering the number of its shares outstanding and… more »

  • Net income

    Net income is a company's earnings or profit as reported on the income statement. Revenue minus all… more »

  • Net margin

    Net margin is defined as net income divided by revenue (or sales). more »

  • P/E ratio

    The P/E ratio (Price to Earnings ratio) is defined as the market price per share of a stock divided… more »

  • PEG ratio

    The PEG ratio of a stock is the price to earnings ratio (P/E) divided by the expected future growth… more »

  • 10-K

    A 10-K is the official version of a public company’s annual report, filed with the Securities… more »

  • The Foolish Investing Wiki »

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