I'm also incredibly interested in hearing people's advice on this.

I actually just got started investing in 2 years ago. The first recommendation I have for you is just to read everything and anything about stocks. I started by going on these main websites and reading their basic tutorials and articles:

http://www.kiplinger.com/reports/basics-investing/
http://www.investopedia.com/university/buildingblocks.asp
http://www.fool.com/investing/basics/index.aspx

The more you read the more you will discover your investing styles (buy and hold, day trading, growth investing, technical analysis, and ect.). Another thing you will realize when you first start is your investing style will change a lot because you will hear different advice from all different professionals. I am still changing my style the more i read but its just one long learning process.

After you learn the basics, the next thing i recommend it just to start investing. Just sign up with financial institution like E-Trade, TDAmeritrade, Scottstrade, and ect. You can read all you want about investing but once you own your stock its a whole another level. A stock is share of ownership in a company and when you realize that, you will want to put your money in better companies. All beginners will make mistakes but you will learn from it, rather earlier than late.

Thats just what i feel would work best. The more you look at the market, the more you pick up and if you have money in the market you will be bound to look at it more because its your money. If you have any other questions you can feel free to message me.

You're on the right track since you have your savings separate from money set aside for investing. Your first consideration should be having an emergency savings fund. After that, additional funds can be invested.

A good primer on investing and stocks is "How to Make Money in Stocks" by William O'Neill. It gives you all the basic info and then some on stock evaluation and analysis.

While you are reading up and evaluating your possibilities, make sure your money is in a high interest savings account. The ones with the best rates (savings and CD's) are listed at www.bestcashcow.com.

You're also welcome to check out my site as I primarily write about investing, stocks, and economics in general.

Yea, everybody is right because there are so many ways.

As a novice investor one of the things to think about is how much cash you have on hand.  The more cash you have the more options you have in investing.  On the other side, the less cash you have the lower returns and more risk depending on what you want.
Make sure you get cost effective commission fees. If it costs you $10 to trade a stock and you only have $500, 2% of your cash is wasted - make that a total of 4% of your principle when you sell afterwards.  But if you have more cash on hand you'd bring that percentage down.

Anyways the following are some tidbits that I learnt along the way and I use.  A caveat though is that they may not work for everybody and in all situations:

#1 Have some sort of goal

- know what you want from this, put most simply: do you want income? growth? balanced?

being a constant cash flow being returned to you via dividends or interest.

being an aim towards capital gains (profit when buying and selling a stock that has appreciated in price)

being a mix between income and growth.

If you don't know what you want, point #6 may help.

- As I invested over the last couple years - I realized that I really don't have time while working to trade in and out of stocks.  I'd rather get the steady income from dividends and income trusts (In Canada they are essentially being phased out except for the so called Real Estate Income Trusts REITs [which are exposed to the real estate market]).

- I would also build up a "core" portfolio first - things that are relatively solid that are made up of stocks that you believe in that are solid dividend paying businesses. Two steady sectors that you may hear about are consumer staples (items that you use every day, the US has more options in those than Canada) and utilities (ie pipelines and power).

- I would also build up a "core" portfolio first - things that are relatively solid that are made up of stocks that you believe in that are solid dividend paying businesses. Two steady sectors that you may hear about are consumer staples (items that you use every day, the US has more options in those than Canada) and utilities (ie pipelines and power).

#2 Patience Stocks can fluctuate wildly even in "normal" times.You need patience to wait for the right price and not be pressured into buying in.example: a stock may be hitting 52 week highs, most likely it will cycle back down to lower levels.
Treat investments like a casino and more likely you will end up with casino like returns that the majority of people get (ie. go broke and cry)

#3

- Diversity is a key point, "don't put all your eggs in one basket".  You can go many ways, for myself - I diversified by sectors (industries) and then by income/growth.Spread out your risk and even out the overall gains/losses.  Buying one stocks will guarantee that the fate of your cash is tied to its performance, but a basket and you can depend on many to support your portfolio.  Also in an always uncertain world, it limits your loses in the event of a fraudulent company closing up or a company going belly up due to bankruptcy.

Some people say buy into

that could be a good and inexpensive way to diversify.  (If I were to choose between ETFs and Mutual funds, I would choose ETFs - they are more

and have lower

basically cost of maintenance)

#4 Judgement calls and Read up on stuffs. - Take news and hype with a grain of salt - when you hear a good idea and buy into sky high stocks it may already be too late and you're setup for some potentially bad losses. (look at some solar stocks when they were hyped up like crazy a couple years ago, just randomly picked one on my solar list - LDK Solar (NYSE:LDK) September 2007 high of $67ish, Sept 2008 $40, Sept 2009 $9)
Read up a little on the economy, sectors, and particular companies. It doesn't have to be complicated just some general knowledge about certain things that you can pick up along the way.

#5 Dollar Cost Averaging and nibbling

- Buy in piece by piece, never go all in.-

Cash Reserves are KEY, as they give you freedom to buy at more opportunistic times. (myself, when I started investing with my surplus cash I nibbled in maybe 40% and left 60% of my cash to buy when a favorite stock that I believe in went down)Going up or down if you have a stock that you seriously believe in you would buy more of it.

#6 Just do it(this connects to #1 - if you don't have a goal in mind, just doing it can give you an idea of what you want)- learn by losing (preferably with a smaller amount)Stocks can fluctuate wildly even in "normal" times and you will discover what your psychological limits are when you see investments down 10,15, 20%. Would you sell, hold, buy more?And on the opposite, you will discover what your greediness is when you see investments up a nice percentage - when will you sell? or will you just hold it?