Your best sources of advice are probably books. Browse in a bookstore, or your library.
Even before you start, though, you have done pretty well already.
You've got a mortgage-free home in your 30s, no debt and money in the bank, which puts you far ahead of most people.
If you simply continue as you are, you should be able to cover the insurance bills, meals and travel.
You could, though, enjoy a few more luxuries and have a more comfortable retirement if you venture beyond term deposits with at least some of your long-term savings.
I would suggest you start by investing a relatively small amount in a balanced fund, which holds a mixture of shares, fixed interest investments, cash and possibly property.
Ask your bank or a financial adviser or stockbroker for information on balanced funds - sometimes called diversified funds.
On average, over the years, such a fund should bring you higher returns than term deposits.
The first thing you need to understand, though, is that the value of your investment will fall at times - sometimes quite far.
That's because shares, property and sometimes fixed interest investments go up and down. You may already have seen this with the value of your house.
When the value of an investment in a balanced fund falls, if you can learn not to panic but to stay invested, it should rise again.
The tricky part is that nobody knows when the rise will happen. Sometimes it takes a few years. And it can be tough coping with that, as the next two letters show.
But you have got more than a few years in hand. So promise yourself you won't bail out if things look grim.
In a balanced fund, too, you should not experience huge drops in value. When the shares or property fall, chances are at least one other type of asset in the fund will perform well, at least partly offsetting the fall.
As your experience grows, you might put a greater portion of your savings in the balanced fund.
You might even put some into a fund that holds only shares. It will be more volatile but should, on average, bring you even higher returns over the years.
Q: I have been following your articles about one-share-wonders versus managed funds, and agree with you that it should make more sense to invest in unit trusts than individual companies.
My problem is that my personal experience with unit trusts has been abysmal.
In 1991, I started a regular pension scheme with NZI. This scheme was bought out several times, and eventually ended up in the hands of Sovereign.
I became disillusioned with the fund in 1999, and so I stopped making major lump sum investments.
My money has ended up mainly in a balanced fund, with some in a dynamic growth fund.
My latest statement shows that the value of the fund is about equal to the money I have invested - no return whatsoever.
Sovereign's response is that the market is bad but "in the long run sensible diversification and exposure to growth investment will help protect and grow you money".
Remembering the old quip that in the long run we are all dead, how long should we expect to wait before we see some returns from a balanced portfolio?
A: I don't know. Nor does anybody else.
Not surprisingly, I've received many letters similar to yours recently. Often their tales have been sadder than yours.
As I explained above, a balanced fund is less volatile than a fund that holds only shares. Returns on many offshore share funds have been negative, sometimes strongly so.
Regardless of whether you're in a balanced fund or a share fund, it is important to realise that the prolonged downfall in world shares during the past three years is highly unusual. And it has played havoc with investor confidence.
In a recent Financial Alert article, Martin Allison of JB Were, says: "When bad things happen, investors tend to overestimate the chances of more bad things happening.
"Investors need to recognise that they are psychologically impaired and are inclined to over-pessimism."
As a result, many people, like you, have stopped putting money into funds that hold shares. That means you've missed out on buying them while they are cheap.
Much worse, though, are those who have pulled their money out of funds. Many have bought high and sold low. They will never get rich that way.
Nobody can predict when world shares will hit their trough. They may already have done so.
As I write, the MSCI world index is 14 per cent higher than its low.
From here, it could drop again, but it might keep heading upwards - although, of course, fluctuating en route.
The important point, though, is that it will climb. And climbs after big market drops, like the current one, tend to be rapid.
Allison looked at the nine biggest downturns in the US market - which dominates world shares - in the last century.
"Following all the big market drops came 12-month real advances ranging from 7 per cent to 160 per cent, with a 45 per cent average gain", he says.
Note that these are "real" numbers, after adjusting for inflation. Without that adjustment, they would be even higher.
Allison notes that the 45 per cent average gain happens to be the same as the average decline before it - although he notes that that doesn't take us back to square one. (A 45 per cent drop from $100 leaves you with $55. A 45 per cent gain on that brings you to nearly $80.)
He also says that, in the decade after the trough, returns averaged 12 per cent a year after inflation - which is higher than average for the whole century.
I'm not saying all this means we're in for a 45 per cent real return next year, or whenever the upturn happens. Nor can we predict 12 per cent real annual returns for the next 10 years.
But I am saying those who stay the course have frequently been well rewarded in the past. And I can't see any compelling argument that that has changed.
Q: Am I a wise investor or a gambler? I have a current company super scheme managed by AMP and have also invested with two other advisers, Spicers and Money Managers (I thought it prudent to diversify managers as well).
All three schemes have been losing heavily during the last two years, yet throughout this period I have been contributing monthly to all three companies.
I have been taking the advice of all you professionals about "time not timing" and dollar cost averaging and hanging on!
It is also disturbing to see the time frame changing from 3 to 5 years, to 5 to 7 years, to 7 to 10 years and now to over 10 years. I was 54 when I invested with two of the companies, and if I knew the time frame then, I probably would have acted differently.
What are the over-50s supposed to do?
Whatever gains I made in the early years, plus a good portion of my capital has now disappeared, as well as my dreams of early retirement.
Sometimes I wonder if it's all a great conspiracy by fund managers to lure the public for their commissions and fees. Why don't they charge a performance-based fee?
If it wasn't for my personal interest in real estate and property, which has served much better in the past, I would be relying heavily on NZ Super on which to retire.
A: You're not a gambler. Your investment strategy has been sound. Your luck hasn't. I'm running your letter as well as the previous one - even though my main response to you is to read the above - because you raise several new points:
* Clients of many different advisers and fund managers have been experiencing similar problems. No manager has been immune to falling world share prices.
* I've always thought that if you have a time frame of 3 to 5 years you shouldn't go into shares or share funds - unless you are quite a risk taker.
As you say, everyone is now saying 10 years or more. Once things settle back to normalcy, I think 7 to 10 years might be commonly quoted for fairly conservative investors.
If you're planning to retire before 10 years, you should consider moving some of your savings out of share funds and into fixed interest. But make that change systematically and gradually.
* I still recommend share funds for long-term investment, and I'm not getting any commissions or fees for doing so.
Having said that, the fees of some funds are too high. That's one reason I like index funds, for their lower fees.
* I would love to see a performance-based component to management fees. But, given that markets are volatile, you can't really expect fund managers to earn no income in years of falling markets. Perhaps there's room for some compromise there, though.
* You have done better in property than shares. But others have done the reverse. They're not as numerous right now as a few years ago, when world shares had been doing brilliantly and New Zealand houses badly. But their day will come again.
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