Below is a letter I wrote to a military man I know, and I thought it was worth publishing on my page.

For the last month I have been “playing” Wall Street, and been thinking about what is right for me. For the first time in my life I started to play with short term trading (in addition to the long term investments I usually think about). Bottom line, short term trading is far too time consuming. I now spend 20 hours a week, watching just 20 stocks (or less) looking for that $100 bump. Not to mention it takes about $3-4000 minimum to do it properly. Well this is all leading into what I think about for my military friends, and anyone else that cant watch their investments.

First things first, get a broker. If you would like to use Scott Trade (www.scottrade.com), I can send you a referral and get you 3 free trades (I just need your email address). Normally Scott Trade costs $7 a trade, so that’s 7 to buy your stock, and 7 to sell. I chose them because most brokers are 10 a trade. PS, when you buy a stock, dont buy less than 500 dollars worth, and try to make it 1000 (otherwise the trade fees will be painful). Look at the WWE paragraph to see what I am talking about.

Step two: open a ROTH IRA. Specifically a ROTH (for military), and here is why. A ROTH IRA (IRA is individual retirement account) and allows you to pay taxes before putting money into the account (most IRAs you pay income taxes when you take the money out). Now here is the sweet part. If I remember correctly, because you are government, you dont pay taxes on your salary right? So your tax on the money going into your IRA would be $0.00 right? Where as if you paid income taxes on the money as it came out, you would be taxed at 20 percent or more because you would be retired military.

Step three: take as much money as possible, and put it into the account (you will not be able to touch it till your about 65)

Personally for me, my long term investments will include symbol SPY (this is an index fund of the Standard and Poor 500 stock exchange). What this means is that you will own a tiny piece of every stock traded on the S&P500. You will do as well as the market does. If it has a bad day, you will go down, if it has a good day you will go up. In the year 2000 SPY was at 150 (the dot com days) in 2002 it was at 85 per share (the dot com crash). It went back up to 150 by 2007, and has come down to 130 per share for 2008. I like to buy it between 120 and 130 (or less if it drops that far, but we will have to have another dot com crash to do that i think)

Next on the list is Goldman Sachs (symbol GS). For now dont buy GS. They are a financial group, and getting hit hard by the mortgage issue (all banks are getting hit right now). In 2009 im going to try to buy some at less than 175 per share (unless there is a miracle that saves the housing market). My plan is to hold it for 5 years and reevaluate, because that is what Cramer (the host of Mad Money TV show) said to do.

My last long term play for now is WWE (yes that is world wrestling entertainment). If I dont die from embarrassment, having to admit that I own WWE stock, I will make 9.49 percent in dividends a year. I bought at 15.23 a share which is to say that 15.25 dollars per share was the max I was willing to pay. If it drops below 15.00 i will buy more. Going back to 2006 the average price is 16 a share, with spikes as high as 18.5 and as low as 14. So just to share the numbers, if I sold WWE at 18 a share, that would be 18 percent profit. (at 14 dollars in fees, that would be minus 1.4 percent for fees because I bought 1000 dollars of WWE). So really the profit would be 16.6 percent. So far WWE regularly gets above 18 per share (about once a year). I probably already missed it this year, but if they keep going the way they have, they will hit 18 again some time in winter, or spring of 2009.

Anyway, SPY is the safest play, WWE is the next, and GS is the most risky (right now). GS and WWE could trade places when the economy gets better. SPY will be around until the fund manager gets caught committing massive fraud, or money as we know it becomes worthless and we start living out a version of some Mad Max movie.

Just remember, this is what im doing with my money, for my long term investments. A professional might recommend you do something else, but as Cramer likes to say “Do your own research, no one cares about your money as much as you do.”