By Selena Maranjian

Congratulations! You've made it to the midpoint of this little series. If you're not saddled with a lot of debt and you've accumulated some money, your next step is to begin investing in stocks. But make sure that you don't invest moolah you'll need in the next couple years. No one knows what the stock market will do in the short run, but over the long haul, the trend has always been upward.

Again, on average, the U.S. stock market has risen at an annual rate of 11%. That means it has doubled in value every 6.5 years, on average. However, in any given year the market could fall 25% or more. And over any given 6.5-year period, the market could be flat. But taken, on average, over the last hundred years, long-term investors have seen their money double, and then double again, every thirteen years.

Okay, that sounds great, but how should you begin investing?

We think you should consider what are called index funds, first. But before we get there, allow us to explain the infamous investment vehicle known as the mutual fund. As you may know, a mutual fund is simply a collection of many people's money. That money is usually invested by a team of very well paid managers in scores (sometimes hundreds) of stocks and/or bonds. Most people are happy keeping their nest eggs in mutual funds. They seem safe.

But what most people don't realize is that, over the past 25 years, the vast majority of mutual funds (more than 80%) have performed worse than the market average. Shocking, eh? The net result of investing in professionally managed funds can be a shortfall of hundreds of thousands of dollars in your portfolio. Fortunately, there's an easy way to not be in that below-average group.

The solution is to just be average - by investing in an index fund.

An index is a group of companies that's measured as a unit. The best-known ones are the Dow Jones Industrial Average ("the Dow") and the Standard & Poor's 500 ("S&P 500"). You've probably heard them quoted on the Nightly News at some point. They both act as proxies for the overall market. When the S&P 500 is up 2% for the day, investors take that as an illustration of the returns of the entire market of stocks in the U.S. for that day.

So then it follows that index funds are simply mutual funds that mimic an index. Now take that one step further. There is today what's called a Total Market Index Fund, offered by Vanguard and other mutual fund companies. It simply invests in every single public company in America - more than 10,000 organizations. And because the portfolio is preset, the fund does not pay high salaries to underperforming professionals. The best index funds today cost 1/5th what the average mutual fund costs, while performing better than over 80% of them.

A Total Market Index Fund, with a low fee structure and market-matching performance, is our natural favorite starting point for investors.

By Matt Richey

Get ready. Sit up for a second. And peer in real close. Because this statistic may startle you.

Just $100 invested in the stock market in 1900 grew to in excess of $2 million as we rolled into the 21st century. And let's not forget that this astounding creation of wealth came during a century that included five major wars, a global economic depression, rampant inflation, an energy crisis, one impeached U.S. president, over three decades of the Bee Gees, and the fleeting popularity of the leisure suit.

Blessedly, the 20th century presented numerous opportunities to get rich slowly with such stock market wonders as General Electric, Coca-Cola, Johnson & Johnson, and IBM. To participate in their prosperity, you didn't have to design a light bulb, work in a cola syrup factory, invent the Band-Aid, or spend years developing the ThinkPad; all you needed to do was perform a little bit of research, buy a few shares of these great businesses, then hang on tight.

That's the beauty of investing -- your money gets up every morning and works for you. We consider it no coincidence that John D. Rockefeller, Sr., founder of Standard Oil and human history's first billionaire, learned the power of investing as a young boy. The great modern historian Ron Chernow tells the story (in his book Titan) -- which occurred in rural Owega, New York around 1850 -- as follows:

"Once Rockefeller spent three days helping a local farmer dig potatoes for 37 1/2 cents per day. This set up an instructive contrast for the frugal boy when, soon afterward, he loaned one farmer $50 at 7 percent interest and collected $3.50 at year's end -- without a stitch of work. He was thunderstruck by the happy math, which hit him with the force of a revelation. Rockefeller said, 'The impression was gaining ground with me that it was a good thing to let the money be my slave and not make myself a slave to money.' "

Do you agree?

Assuming you do, and that you've already settled your personal finances, the first step to attaining the opportunity that money affords is to set up a brokerage account. Now, too many people put off opening a brokerage account because they think that a) they have to put all of their savings into the account, b) they have to know everything about investing before getting started, and/or c) that they'll never have time to manage their own money.

Nay, Fool, not so.

Once you have an account, it's time to build up an investing strategy. Here at the Fool, we offer a number of investing strategies for your learning enjoyment. In Lesson 3, you learned about the index fund, a great starting point -- and for many, a great ending point -- to an investment approach. Beyond that, we teach some approaches to stock investing that you might find interesting. They include:

The aim of our strategies is to demonstrate long-term Foolishness in action and to educate stock investors, new and old. The strategies also aim to crush the market and the pros -- Foolishly. In all cases, though, these are simply some of our thoughts on investing. We do not manage other people's money, and we don't profess to have a monopoly on good ideas (we'll leave that up to some of the hot-air balloons running university departments today!).

And so, as always, The Motley Fool encourages you to use your thinking faculties to determine for yourself which strategy -- or portions of multiple strategies -- make the most sense to you.