When it comes to investing, I still feel like a newbie sometimes. Even though I've been investing for many years, I still discover plenty that's new to me.

I have to admit that taking the first steps toward investing were a little alarming for me. Over time, though, I've become more comfortable with investing and making decisions about where to put my resources. Even with the increased level of comfort, though, I'm still a rather boring investor.

My First Investment

There are a few basic rules when it comes to mutual fund investing:

  • Choose a low-cost index fund.
  • Avoid loads.
  • Don't buy through your friends.

One for three isn't the best track record, but I guess it's better than zero for three. I started investing when our insurance agent -- who happened to be an old college friend -- met with my husband and me for a policy checkup.

He had just been licensed to sell securities and was eager to help us 'secure our future' with a Roth IRA.

I had a vague idea that a Roth IRA was a good choice for us, but, at the time, I didn't really know how to get started. Having someone we knew and trusted -- who had already convinced us to buy a universal life policy, by the way -- take care of the business of setting it all up seemed like a great idea.

So we agreed. The insurance agent started talking about the different funds available, and I quickly lost the thread of where we were. My husband was even more lost.

I said the only thing I was sure I knew: 'I only want to consider no-load funds.'

Our friend blinked, and then smiled. 'You're really smart about this.' I felt a warm glow. Looking back, I think I was being patronized.

We completed the paperwork, arranged for an automatic monthly withdrawal from our checking account to the Roth IRA (which was in my name), and said goodbye, feeling good that we were now increasing our wealth through investments.

Knowing what I know now, I don't feel good about it anymore. But the bad experience gave me the push I needed to make myself into the investor I am today.

Learning More About Investing

I began reading more about investing after this experience. Not only did I think it would help me as part of my career as a financial writer, but I also thought it could benefit my family.

I soon learned that an actively-managed fund doesn't usually outperform index funds -- and they cost more to boot. (Ours had a 2% expense ratio.) Even with this knowledge, though, it took me more than five years to finally transfer my Roth IRA from the high-cost fund the insurance agent got me into a new custodian that uses low-cost index ETFs to build retirement account portfolios.

My first exposure to index funds and their numerous benefits was a couple years after I began investing with my insurance agent when I read the book Oblivious Investing by Mike Piper. This introduction to index-focused investing, made popular by legendary Vanguard founder John C. Bogle, has largely shaped many of my ideas related to long-term investing.

Lending Club offered me free money to try out peer-to-peer investing (P2P for short) and write about it. P2P investing is as the name would indicate -- the practice of people investing in or lending money to other people they don't know. It's taken off online in recent years, and Lending Club is just one of the many sites that offer the service. While I don't have a large P2P portfolio, the experience was pleasing enough that I invested some of my own money. All through the financial crash and aftermath, my annualized returns beat the market. (That's not the case now, though).

I also learned an interesting lesson: B, C, and D credit isn't so bad when it comes to P2P lending. My only write-off to date is from a borrower whose credit was rated as A. (Lending Club gives a letter-grade credit rating to all of the people you can invest in.)

My research also led me to dividend-paying stocks. I saw that the dividend stocks in the income fund held in my Roth IRA buoyed my balance a bit through the tough stock market following the 2008 crash, and I wanted to learn more. As a result, I am currently building a dividend portfolio.

Finally, I realized that I could use a taxable account as an emergency fund. Now, even though I have some money in a liquid high-yield savings account, the bulk of my emergency fund is in a taxable account that contains relatively low-risk index funds and ETFs. When I did have to tap it following a flood in my basement a couple years ago, the net loss resulted in a tax deduction, while providing me with the needed capital to pay my costs.

Most of what I do is boring and emphasizes funds, dividend aristocrats and long-term strategizing, but it works for me and my family. And in the long-term, it gives us a good chance of living the life we want.

The Investing Answer: The important thing is to start investing. You'll likely be starting small -- meaning that you won't have that much to lose and your inevitable rookie mistakes won't be devastating.

Once you get started, read, read, read. Do your homework. Make it your job to learn more about how investing works, so you can feel more confident in what you're doing.

But again, you must start. Do it little by little and watch your investments grow.