How to start investing your hard-earned money
A Structured Guide to Asset Classes, Allocation, and Investment Strategy
Last updated: 2026-05-25 (added new section about use of AI assistants, changed sub-title & removed parts of intro section)
Updated: 2025-06-03 (added 4 sections to make more holistic)
Updated: 2023-12-12 (expanded asset description section)
First published: 2023-06-09
Hello everyone!
In our book FIREDOM, I discussed ESIPL (Earning, Saving, Investing, Protecting and Legacy) framework in the context of wealth creation. Shout out to ESImoney.com and Todd Tresidder (financialmentor.com), as ESIPL is a combination of their frameworks.
Today, I'll be focusing on the Investing (I) aspect of the framework. For the purpose of this discussion, I assume that you're already doing well in terms of earning a lot of money (E) and practicing values-based spending (S).
Let’s divide this Investing discussion into five sections:
What assets should I invest in? – Overview of core asset classes.
How should I allocate my investments among different asset classes? – Asset allocation, investor psychology, rebalancing, and risk management.
How should I invest? – Indirect vs. direct, passive vs. active investments.
Where should I invest? – Brokerages and platforms options.
How much should I invest? – Target savings rates and allocation guidelines.
(1) What assets should I invest in?
Let's examine a wide range of investment avenues to empower you to make informed decisions to grow your hard-earned money. Here are the major investment opportunities to consider:
1) Stocks (equities): Invest in public stocks which represent ownership in companies. Stock investing offers the potential for significant returns but is accompanied by various risks, including company-specific, macroeconomic, systemic, political, regulatory, and dividend risks.
