Brusqueness

1. Low Cost. The costs to acquire and maintain an investment can be a significant barrier to entry for a young, novice investor. Moreover, because the size of that first investment is usually small, the impact of transaction costs is magnified. It did not cost me anything to buy or hold that Motorola stock except for the actual purchase price.

2. Automatic. The easiest way to make investing a habit is to make it automatic. This can be through payroll deduction into an employee-sponsored plan (like my Motorola stock) or by automatic transfer from a bank account to an investment account.

3. Difficult to Liquidate. By this I do not mean an illiquid investment. Rather, there should be administrative obstacles and/or tax disincentives to selling the investment for use other than for its original purpose. This makes it easier to resist spending temptations. IRAs are ideal for this.  My Motorola stock was easy to sell. Should I have held it and not used it for a vacation? Yes and no. Mrs. ToughMoneyLove worked extremely hard to help support us through law school. Her lifelong dream to that point was to visit Ireland, the land of our ancestors. We had relatives on temporary assignment in England who would provide a place to stay. We had other relatives who offered us travel to the UK as a gift but only while our other relatives were there. When else would we have the time and means to take that extended trip? I think it was a good choice for us.

4. Transparent Growth. An excellent way to create investing enthusiasm in the novice investor is to make it easy for that investor to watch the investment appreciate in value. Any security and investment account that is easy to monitor online should qualify.

5. Low Risk. This one is going to be controversial. The standard line is that young folks are in it for the long haul so taking significant short term risk is appropriate and necessary.