2 weeks ago I received an email from a reader asking for a post about investing. Ive had this piece in my drafts for a long time (hence its length!) and I thought it was time to bring it out into the light!

Since posting about finally generating a passive monthly dividend income in stocks. a few people have expressed some curiosity about getting started investing in the stock market. Im not sure if Im one to ask, since for the most part I still feel like an extreme novice when it comes to investing. At this point, I do all my own research and planning, and I invest slowly with small amounts and the intention to buy & hold for the long-term.

Develop a strategy. What are you trying to get out of investing in the stock market? For some people, its where they keep much of their assets for retirement. For others, its just a place to keep money as part of a wealth-building plan. What this money is for should direct what kind of stocks you buy. If this is your retirement nest egg, play it safe, but if this is cash you can afford to lose, you can take some risks for higher returns. I invest primarily in blue-chip dividend stocks from companies I know and understand. I only choose stocks I am willing to hold 10 years or more, regardless of what the market does. If you dont know what to invest in, start reading investing blogs, Yahoo! Finance. and frankly, just look around you: what company makes your computer? Your soap and shampoo? Your clothing? Do you think theyll still be in business 10 years from now? Do you think theyll be more or less successful next year, in five years, in ten years?

Practice. One of the most useful strategies that I still employ when it comes to the stock market is creating a mockfolio. A mockfolio is practice portfolio, where you follow a number of different stocks over a period of time without actually investing any real money. I did this for an entire year before I put my own money into a brokerage account for investing. I still do it now to plan where Im going to invest next. I used to use Morningstar.com to do this, but now I just watch stocks in the Money 4 application on my Mac where I track my budgeting.

Get some capital. Its true that more is better, but dont let having only a small amount of cash keep you out of the game. I began investing with only $1,000. Whatever amount you have, just make sure youre willing to lose it in case you make a bad call or the stock market falls. As you accumulate more wealth and can diversify your investments, youre less likely to see your net worth plummet on a bad stock day, but that first investment in only one or two companies can make you choke if you see dollars start slipping off.

Open a discount brokerage account. If you dont have a lot of money to invest and youre new at this whole thing, its better to go with a discount brokerage rather than an expensive full-service brokerage. If youre Canadian, Questrade is an excellent online brokerage to get in to the stock market. Trades start at only $4.95 (instead of $30 like at the big banks) and their IQ platform is pretty nice and straight-forward to use. Ive also found their customer service to be outstanding.

Start trading. You learn by doing. You wont always make the best choices, sometimes youll even make mistakes. You have to be patient with yourself and your money. You can read all the tips and tricks and books you want, but a lot of the jargon doesnt make sense until you see it in action.

Hope you find this to be a helpful post! Im definitely looking to write more about investing in stocks as I do more of it you know, once those pesky student loans are gone