I want you to set your sights on one goal when it comes to your investments: You should aim to be average.

That might sound shocking. But it makes sense when you consider that a research study by Morningstar showed that the typical investor earned a pathetic 3% return on capital, while at the same time, their underlying investments grew by 10%. For all that work, and all those trades, the everyman shareholder had given up a decent after-tax and after-inflation return and instead left themselves with only 30¢ for every $1.00 they should have collected in dividends and capital gains.

They took the risk. They put off their use of money. They gave up most of the prize.

A vast majority of you have no interest in pouring over a 10K, 10Q, annual report or proxy statement all day. You have no desire to master the complexity of GAAP accounting rules or the time value of money. For you, it makes no sense to try to pick undervalued companies. Your only goal should be to focus on your career, earning more money, and then put a portion of your savings into high quality real estate, stocks, and bonds that generate good returns on capital over long periods of time.

Here are some ideas for how you can try to achieve perfectly average rates of return on your investments over the next few decades.

1. Invest in Low-Cost Index Funds

If you have no desire to buy shares of individual companies, you can always opt for the plain-vanilla, low-cost index fund. A mutual fund such as the Vanguard 500 mimics the S&P 500 stock market index and will get you an ownership stake in most of the biggest companies in the nation, ranging from Apple and IBM to Coca-Cola and Pepsi to Berkshire Hathaway and General Electric, doing it as you pay less than $1 or so in annual expenses for every $1,000 you have invested; a fantastic bargain in terms of expenses.

Add in dollar cost averaging and dividend reinvestments, held through a tax-advantaged retirement account such as 401(k) plan or a Roth IRA and you have a good chance of mirroring the experience of America, Inc. over a long period of time.

2. Build Your Own Index of Blue Chip Stocks

If you prefer to own individual company stocks, you can pick your favorite long-term blue chip companies and enroll in their direct stock purchase plan and dividend reinvestment programs. These low-cost plans automatically deduct money out of your bank account at regular intervals to purchase ownership in the business, often at minimal or no cost. (You may want to read Index Funds vs. Individual Stocks if you are trying to understand the advantages and disadvantages of both approaches.)

Here is how it might work.

• You could identify a half-dozen companies you really like, such as Coca-Cola, General Electric, Johnson & Johnson, Exxon Mobil, Procter & Gamble, and McDonald's. The list is entirely up to you, but you should be looking for highly profitable companies with low debt relative to income and book value, strong product franchises, good competitive positions, and revenue streams that aren't likely to be displaced rapidly by technology.

• You sign up for the automatic direct stock purchase plan and dividend reinvestment plan. Filling out the paperwork normally takes a few minutes. You tell the company how much cash you want withdrawn from the bank weekly, monthly, or in other intervals, as well as how you want the dividends handled (no reinvestment, partially reinvested, completely reinvested). You attach a voided check, mail in the paperwork, and wait for the automatic investments to begin. You should receive a paper statement each quarter.

My family has engaged in this method as a backup to our private businesses and other investment holdings. One family member regularly invests around $500 per month in shares of a major bank, which he has increased from $300 per month or so several years ago. Another holds thousands of dollars worth of Coca-Cola stock from saving $50 per month. Yet another owned half a million dollars worth of telecommunication stocks bought over decades.

Personally, I do this a bit differently. I setup a program called the Kennon Retirement Insurance Plan, or KRIP, when I was a teenager. Every year, I try to save tens of thousands of dollars into it as a backup to my main investments. I have the plan buy shares of high quality, great businesses, park them in long-term accounts I can't access until retirement, and then have the dividends pile up in cash throughout the year until Christmas, when I determine how I want the money reinvested. After years of diligent saving, it has amassed positions in soda companies, oil giants, insurance underwriters, traditional banks, consumer product manufacturers, tobacco firms, alcohol distillers, discount retailers, confectionary plants, plastics, chemicals, sugar refiners, and automobile parts, just to name a few. Watching it grow year after year is one of the great joys of my life.

3. Buy Simple, Cash Generating Real Estate Using Little or No Debt In Neighborhoods You Know

By far, one of the most popular ways to generate decent returns on money is to buy cash generating real estate in areas that you, the investor, understand, and can monitor. I know many people who have amassed multi-million dollars fortunes by slowly and steadily buying up properties in the areas surrounding their hometowns over the course of a lifetime. Apartments, townhouses, rental houses, office buildings, storage units, hotels, and car washes are often favorites. Others prefer sale-leaseback transactions with major retail chains who don't want to have their money tied up in real estate and instead offer to lease a property from the investor / owner.

This method seems to be common because it is easy to understand. If you own a corner lot drug store building and you lease it to Walgreens for a certain amount every month, you know precisely how much cash should be deposited into your bank account. You can then compare that to your investment in the property and figure out the return. It's simple. That doesn't mean it's always easy, but there aren't a lot of moving parts, like there would be bidding for some portfolio of derivative securities being liquidated by a European bank.

Don't Underestimate the Power of Being Average

Being average may be boring, but it can make you rich. Year after year, decade after decade, you add to your surplus and collect more dividends, interest income, and rents. Isn't that all that matters?