I generally suggest investing in SP500 (or if being more risky, Nasdaq 100) because selecting good stocks takes a lot of knowledge and it takes more time to learn how to be a good investor, more than the space of this website. It took 15 years before I really deeply understood the difference between an investment and a speculation (even a long term one.) However, many good investments will be down on a random given day, month, year; it took Tesla nearly a decade to start moving up significantly (and smart investors continued to put money into that stock over that decade and became very rich off it) I wanted to invest in Tesla in 2006 when it first made national news and I was familiar with the electric sports car concept, having previously worked with a similar company that didn't wind up doing much after.
First, you should learn the fundamentals and if you're going to invest in individual stocks; focus on companies that are financially sound and fairly priced relative to the business they have (though "high p/e" companies that have been trading for a while are simply profitable companies who have had so much market interest that the price rises beyond a typical valuation based purely on earnings.) William O'Neill's 'CANSLIM' method is a good way of limiting it to quality companies. If attempting to predict the market with chart analysis or indicators, which was far more effective 20-25 years ago; Dan Zanger's Chartpattern.com and the book 'Encyclopedia of Chart Patterns 3rd edition' are excellent resources.
One reason Sp500 is encouraged for investing long term rather than individual stocks is valuation and deciding who is right, the market or the fundamentals. CAVA is a good example, on average each restaurant sells 5 bowls an hour per location during open hours (revenue divided by locations, divided by hours open, divided by cost of each bowl without add ons.) However, they don't own their locations, they have utilities and supplies, they have probably 3-6 people working at a given time. If they get a line during the lunch rush, they run much slower than comparable style restaurants and run out of key ingredients faster leading to a poor customer experience that may lead to less return business. Yet, each location had a valuation of about $24 million when I analyzed it. Since that time, it rose dramatically; but fell back when the market fell back. The justification the market relied on is growth of stores (about 50% that year, through acquisition of Zoe's Kitchen), their CEO is well respected and the market thinks he could turn this into another Chipotle; and finally they have a state of the art manufacturing facility (one of the few buildings they own.) I can't say "Don't buy XYZ stock" because something like this could happen where the stock is bid up despite sales not looking as impressive as the market is treating it; but I also can't say to buy XYZ stock because the fundamentals don't support it. Ultimately, that's up to the investor to decide; but they should know all the reasoning as to why or why not to invest.
Kevin O'Leary of Shark Tank said one of the best investments he made on the show was a cat DNA testing company, it turned out that the company had reems of data of cat DNA and were bought out for that rather than the DNA testing service. So, you never know when something will benefit you out of the blue.
There's more on real estate in personal finance, but I wanted to point out something cool. Commercial real estate usually requires you to put up 40-50% of the purchase price (really should be 10% for both commercial and residential, but I digress) but if you can increase the value, you may be able to get the entire purchase covered. In residential, this is usually done with repairs; you might put $5k into a property and increase the value by $30k. In commercial real estate, if you find a quality property that has few or no tenants; it's worth far less than if it was mostly occupied (though, generally if they can avoid selling in this situation; they probably will.) If you can get it fully occupied, then the value increases; though you may need to be able to take control before appraisal for lending (ie take control once the property is under contract and know how to fill the property within 90 days, perhaps some large commercial deals take longer.)
Another real estate idea I had is for a group of 16 households to seek out 5+ acres of subdividable land with access to utilities (water, power, sewer) and get it rezoned to 16 residential lots (if you did more, the land lots could be sold as soon as roads are built or save it for later; could offset some of the costs.) You might have 16 people build a house together and then refinance it and build the next ones, much like how the Amish build barns. A 1200 sq ft concrete block home in my area runs $350k easily, but you're looking at $2000 worth of concrete blocks, $7000 in windows, $32000 roof (less if a group knows how to build a roof), $6000 slab, painting/landscaping/architecture could be relatively affordable, as is tiling and drywall, wiring and plumbing. A quick look found a potentially viable property for $200k for a road and all 16 houses on a road with utility access, if subdividable (or you can get it rezoned) it may be well worth it. You might be able to put all that together for under $120k each house including permits as you'd be doing the labor yourself. For this street, road, water, sewer, power could all be put in for $500k ($31k each); if utility company or city won't do any of that for some sort of utility/tax basis agreement but may be financed as it increases the tax basis and they'd still be reimbursed. If the land was larger, you might develop the opening street first but have it subdivided to allow more later. You can refinance and pull cash out, you can sell it in 2 years and have $250k (or $500k for a married couple); remember this is 16 people that now have a way to become prosperous and may choose to continue to work together to grow that prosperity. You may all find you love construction and build houses for others, or if there's more land build new houses for when you sell these and make $125k/yr tax free (ie sell each 2 years, $250k tax free for personal residence as long as the government doesn't declare the activity a business.) An unmarried couple could each sell their own home every other year and potentially make $125k each year per person in a nice steady fashion if the group expanded and initially bought a land plot that allowed later expansion. Early on in the project they could build 4-plexes, refinancing once rented out to 4 people (possibly housing everyone until their own houses are built) and once it's time to sell their primary residence they move into the 4 plex. You can get an FHA loan on a 4plex (the most units they'll lend on, above that is considered commercial and you can't get 80% financing) and you could have 4 units of 3 bedrooms in a high rental market so 4 units each have 3 roommates each and you have less risk of missed rent (another way to prevent missing rent payments is section 8 renters, talk to multiple landlords who do that to learn the pros and cons of it.)
Inflation is ever present, with the monetary supply increasing 10% annually; it’s inevitable. That being said, it’s not the horror that it’s often made out to be. The 2 components to hedging normal inflation are simply owning your own home and having employer provided health insurance until old enough for medicare. Outside of that, things like gas, groceries, clothes, travel, and entertainment; pale in comparison because they represent such a small portion of expenses. If concerned about hyper inflation, gold, silver coins, bars of soap and farmland would all be good hedges against this apocalyptic worst case scenario.
The best steps to planning retirement are owning your own home, a roth IRA and a 401k with company matching. If your company does not provide those, you may be able to form a corporation and have a 401k or use a SEP 401k. What to invest in? On a small scale, low fee SP 500 index funds; works great for a relatively new Roth IRA. When an account is larger, I prefer a combination of 30% Nasdaq 100 and 70% SP 500. The Nasdaq 100 is a bit more volatile but grows at a faster rate since inception, the SP 500 is more stable; the most risk I’d consider is 60% SP 500 and 40% Nasdaq 100. This should yield 11.4%-12% annually. It takes the long term to average close to this, might be up more or even down in a given year, dollar cost averaging generally leads to lower risk of being down for any prolonged period.
Dollar cost averaging is key, it actually won a Nobel prize. If you put in a lump sum at any given time, it may go up or down. If it goes down, you might be down for a while. If you dollar cost average, based on sp500 index over the long term (30+ years) you'll rarely be down more than a couple years and very quickly return to the long term expectation of 8-10%+ annual returns. If you invest in sp500 in a lump sum, there is no point in it's history where you'd be down over a 20 year period; but the goal is to make annualized compounded returns.
A corporation (you can form a corporation) can match your contributions to a 401k, if taken to an extreme you can contribute 23k and they can contribute up to 46k up to 25% of your income; though this is rare except when you form a corporation to do this for yourself (if you have other employees, they’re probably allowed to match as much; so you have to be careful as that could get very expensive.)
If you invest $10/day from 18-22 at 10%, that grows to a million by age 65.
If you plan to have a kid, put aside $6700 into SP 500 in their name as a gift upon their birth (that’s less than the emergency room costs) and when they turn 65 it should be $1 million. If you put $1 a day into sp500 and get 10% for 10 years, that will reach the same amount that $6700 at birth will; invest in your kids future. If only getting 8%, then you would need $3/day for their first 10 years ($3 is the same as a bottle of water, candy bar, energy drink at a vending machine these days.) Taking it further, $20,000 in SP 500 would give them money for their first car at 16, college at 18, down payment on a house at 25 and still be a million dollars at 65. A mere $2 a day for a kid until they turn 4 becomes a million if yielding 10% until age 65, it's crazy how little that is.
Conversely, for those who do not wish to have children, permanent solutions like vasectomy can be considered, with reversals or reproductive material storage as options. For ladies it’s not as easy, as getting tubes tied has higher risks than male vasectomies, IUDs can be dangerous, birth control changes brain chemistry.
529 college savings plans or child tax credits are also great options to look into.
Taxes
I've already mentioned business opportunities and retirement accounts that offer tax breaks, real estate has some good ones too. On your personal residence, you can make $250k in tax free profit as long as you live there for 2 of the last 5 years; if you structure your home purchase around this then you could make some nice tax free gains. Of course, there's deductions of interest and depreciation. There's also the 1031 tax deferred exchange, some people keep buying and reselling until they pass away and never lose money to taxes on these gains; I wish this could be done in the stock market.
Section 1244 stock is a stock transaction pursuant to the Internal Revenue Code provision that allows shareholders of an eligible small business corporation to treat up to $50,000 of losses (or, in the case of a husband and wife filing a joint return , $100,000) from the sale of stock as ordinary losses.