The basic questions, which you might have, will be: how to get started? How do you come up with the money to invest? How'd you know what to invest in? Many people don't know where to start, so they never start at all.

Basic Assumptions

--Before we start, it is assumed that you have your credit card debt under control. It makes no sense to invest in stocks, bonds, or mutual funds if you have thousands of dollars in credit card debt at interest rates in excess of 10%. You don't have to be completely debt-free, but you should be making serious inroads into your debt each month, and you should be paying very low interest rates on that debt.

--This article also assumes you have an emergency fund of at least three months worth of basic living expenses (preferably six months worth) in case of a job loss, disability, etc. And finally, this article assumes that if your employer offers a 401(k) plan, you're maximizing your contribution and diversifying your investments in the plan.

How to come up with Money to Invest?

This is first question for many people? There are plenty of stock mutual funds that allow you to invest with $500 or less. Use your next bonus at work, or your income tax refund, or put in some overtime for extra cash. If you just can't come up with $500 to start your portfolio, many funds will allow you to skip the initial lump sum investment if you sign up for automatic monthly withdrawals of $25 to $50 from your checking account.

How to Choose an Investment?

You're ready for some long-term investments. How do you choose? The first step is to know what your goals are. Are you saving for a house? A college education? Retirement? The type of investment you choose will depend on the amount of time available before you need the money. Stocks are considered long-term investments, and it's best to plan on holding stocks or stock mutual funds for five years or longer. If you need the money sooner than this, you may reduce your return by cashing in when the stock's value is down.

How to Determine Risk Tolerance?

Next, you need to know your risk tolerance. If you hide your money under your mattress because you don't trust the bank, then you're probably not going to feel comfortable investing in volatile technology stocks. CNBC's Investment Risk Test can help you determine what level of risk you can tolerate.

Most experts recommend spreading your money over several different types of investments to reduce risk, because typically one type of investment does well when another doesn't. For example, usually when returns on stocks and stock mutual funds are high, returns on bonds are low, and vice versa. By having money in both types of funds, you're more likely to get a decent combined return if one category takes a downturn. Your asset allocation should be tailored to your risk tolerance and the number of years before you'll need to withdraw the money from your investments.

For beginning investors, a stock mutual fund is recommended, instead of stocks in individual companies. Why? It's all about risk. A well-chosen stock mutual fund is less risky than an individual stock because mutual funds invest in many companies, thus spreading out the risk. If one company does poorly, the fund as a whole may still have a good return. If you buy stock in one company and the company does poorly, you lose money.

Where to Find Information About Stocks and Mutual Funds?

Once you've chosen a fund you feel comfortable with, call their 800 number and request a prospectus (a description of the fund, its investments, and the returns it's earned in the past) and an investor's kit. Fill out the form, send in your money, and voila! You're an investor.