Now you have just got to do it

Cash
There is nothing much to be said about investing in cash. Look at Cash or any number of other sources of advice.

Equities: fundamental rules
To invest in equities there are only three rules:

• you must minimise costs,
• you must have some diversification ,
• you must use your tax reliefs.

Notice there is no rule about stockpicking or value investing or 'buy low, sell high' or any of the other mantras that so interest amateur investors. Provided you diversify you do not need to worry about any of this for Simple Investing. This ought to be a relief.

The way you go about following the fundamental rules will depend on your wealth and other personal factors. Here are some guidelines.

Minimising costs
The easiest way to invest in equities is through an investment product like a unit trust. But once you do this you are paying the costs of the product provider. You need to be sure that they are worth paying.

Many savers find themselves driven towards inappropriate products because they assume that direct investing is too difficult or too expensive or only for the wealthy. This is no longer true, and you should break this mindset by making a plan using only direct investments. Once you have done that you might consider whether indirect investments would be cheaper and/or provide better diversification.

Note that tax plays no part in this decision: you can only get tax advantages from wrappers, not from products. Taxation of products is different, not better or worse.

Direct investment vehicles
Even if you think you know what, e.g., an ISA is we suggest you browse assets, products and wrappers at this point.

You will probably need a SIPP provider, an ISA provider and an execution-only broker. They are as easy to set up and operate as an online bank account. Pay particular attention to the costs of each account, and whether you would save money by using just one provider.

The best and most complete broker comparison table comes once a year in Investors Chronicle.

Your first decision is how much to put in a SIPP and how much in an ISA. The tax advantages of a SIPP are enormous, but you are locked in until retirement. Only you can decide if the one is worth the other. An ISA gives less tax benefit but is more flexible (you can always take your money out). You will also want to consider whether any of your ISA allowance should be invested in cash.

Whatever equities you have left will be invested through your brokerage account.

Diversify!
To achieve adequate diversification you need at least 10 and preferably 20 different shares. So, imagine your equity investment is divided into 20 equal parts (not 20 in each of the three wrappers, but 20 in total). Assume you will sell each share after 5 years and buy another one. Calculate your costs. Turn this into an average annual cost.

Refine & Execute
Now you are ready to go. You can evaluate the cost and convenience of product alternatives against your base plan of direct investment.

• You may want to buy a few well-diversified investment trusts instead of 20 shares: fine, see if it's cheaper, or if you feel more comfortable.
• You may find you do not have the spare cash for an ISA yet: fine, that's your decision.
• You may find that the costs of equity investment are higher than you thought and you'd like to revise your plans: fine, that's what planning is for.
• You may........

But remember this. You should aspire to direct investment in your own accounts. That will always be the cheapest and best way of investing in equities with any reasonable amount of money. Unless you understand how to do that at the beginning how can you work towards realising this aspiration?