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You've read the stories about the dearth of "retail investors" out there as stock market volume remains thin and mutual funds keep seeing money flow out.

Many companies have also cut back on their 401k and other retirement benefits, and a number of Americans are cracking open their nest eggs and borrowing against retirement to keep afloat now.

It's tough out there. And while we all know we need to invest for retirement, it's sometimes hard to believe it's worth the trouble.

But as legend has it, the great mind of Albert Einstein believed that the most powerful force in the universe was compound interest -- the process of putting a little money away now to become a little more tomorrow, and a little more the day after that, in time growing to a very substantial sum.

If you think that retirement is out of reach or that investing is just too expensive, think again. It doesn't take a ton of seed capital to get started -- or to get back in. And the sooner you get going, the longer you have to compound your interest and supercharge your returns.

In short, it's not how much money you have now but how much you'll have with time. So get started!

Here's how you can begin building a successful retirement in five easy steps. And the first step can be as simple as socking away $1 a day.

Step 1: Save $1 a day for a year

If you can't do this, you're in serious trouble -- and not just as an investor or as a future retiree. While seemingly meaningless on the surface, this simple act has a philosophical value:

  • It shows discipline. Making a concerted effort to save daily is a good lesson to learn, and a good thing to prove you can do.
  • It's a long-term goal. Saving $1 a day is important because it proves you have the ability to keep your eyes on the prize, even if the going is slow.
  • It builds confidence. This is a goal that you can easily achieve, so there's no risk of being disappointed or feeling like you're in over your head. Getting to $365 in 365 days will give you confidence to save and invest more going forward.

But don't think you have to wait a full year before you can get started. Simply do an Internet search for "no minimum broker" or "zero minimum broker" and you'll find a host of online investing services that allow you to put even small amounts of cash to work. Depending on the offers at the time and the provider, you may even get free trades -- meaning you literally have no barriers to investing even a small sum.

That means you can start buying stocks and funds pretty quickly. Of course, unless you want a $1 stock, you might have to wait a few weeks to save up enough money -- and if it's a stock like Apple (AAPL), you'll be waiting almost two years to gather enough cash for just a single share. But the good news is that you can buy stock in as little as one-share lots once you're ready. That could mean six $60 stocks your first year or 12 $30 stocks -- it depends on your strategy. But you have plenty of investments to choose from.

Step 2: Identify your 'flavor' of investing

While you are gathering your dollars in your piggy bank, you should be proactive about finding your first investment.

There are a few core types of investors, and you're probably most comfortable in one of these categories. So as you put your money to work, you should explore exactly what you want to do with it -- and equally important, what your risk tolerance is.

  • Capital preservation: Is avoiding losses as important to you as tapping into profits? Than you should consider boning on up investments that focus on capital preservation -- whether they be certificates of deposit or ultralow-risk investments like U.S. Treasury bonds. The tradeoff: generally lower returns.
  • Income: Do you want to do more to grow your money, but in a low-risk way? Then you're probably an income investor. That means you put your money in investments like bonds or dividend stocks, not with the expectation of big jumps in the prices of the assets but to get a nice stream of income from those investments in the form of regular distributions. Income plays include dividend stocks like Procter & Gamble (PG), dividend stock funds such as the SPDR S&P Dividend (SDY) exchange-traded fund or bond mutual funds like the world-renowned Pimco Total Return (PTTRX) fund.
  • Value: Are you looking for strong investments that remain relatively stable over the long term but that might be undervalued with room to run based on their long-term potential? Then you're what we call a "value" investor who looks for bargains. This is the school of investing made famous by Warren Buffett and Benjamin Graham before him. Look for the word "value" in mutual funds or ETFs to find the ones that use this strategy.
  • Growth: Are you looking for, pardon the overused marketing phrase, "the next Apple," a stock that will soar in price and deliver significant gains to your portfolio? Are you prepared to swing for the fences even if it means you may strike out? If so, you're a growth investor. Look for the word "growth" in mutual funds or ETFs that have this strategy.
  • Self-starter: Do you dream of being a cook and consider an expensive kitchen gadget a good investment? Do you want to learn new skills and start a second career, and think it's worthwhile to invest in your education via seminars or part-time courses? These are unconventional forms of investing, but they're no less powerful. Tapping into your personal potential is sometimes more of a moneymaker than anything else.

Decide out what kind of investor you are as you do your research. Then, when you find a few prospective investments, you will know how much you'll need (and how long it will take to save) in order to make that first move.

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