Invest at least 10% of your after-tax income, each month, in a Vanguard index fund. Do not buy individual stocks, nor any actively managed index fund, nor any fund with an expense ratio over 0.5%. If you absolutely must pick stocks, and I admit that I am not blind to the attraction, use a fee-free broker such as Loyal3, and don’t count this towards your 10% - use play money for active investing.
If you are looking at your latest paycheck and finding it hard to see where you’re going to cut to be able to put 10% into investments, precommit now to starting this program after your next income increase; also, start with 1% instead. If you cannot free up even 1% of your income, you have a major problem, which you need to fix. (Incidentally, if you can do 20%, do that.)
If your employer has a 401K match, for the love of all that’s holy, contribute enough to max out the match! That’s free money, that is!
If you have several old 401Ks, roll them over into an IRA with Vanguard. It’ll be easier to keep track of your money, you’ll likely pay lower fees, and IRA money is more accessible than 401K money.
Maintain a savings account with at least three months’ expenses in it; six is better; twelve is probably too much—at that point you’re losing more in growth than you’re gaining from being able to ride out a job loss. But people do differ in how they feel about risk; by all means make it twelve if you’d be happier that way.
If you have recurring credit-card debt (not paid off at the end of each period), pay that down before starting on investing. And for dog’s sake do so right now, that stuff is poison. Consider Lending Club or other peer-to-peer lending services, it is fairly likely that you can get a better rate than your credit card gives you.
Invest at least 10% of your after-tax income, each month, in a Vanguard index fund. Do not buy individual stocks, nor any actively managed index fund, nor any fund with an expense ratio over 0.5%. If you absolutely must pick stocks, and I admit that I am not blind to the attraction, use a fee-free broker such as Loyal3, and don’t count this towards your 10% - use play money for active investing.
If you are looking at your latest paycheck and finding it hard to see where you’re going to cut to be able to put 10% into investments, precommit now to starting this program after your next income increase; also, start with 1% instead. If you cannot free up even 1% of your income, you have a major problem, which you need to fix. (Incidentally, if you can do 20%, do that.)
If your employer has a 401K match, for the love of all that’s holy, contribute enough to max out the match! That’s free money, that is!
If you have several old 401Ks, roll them over into an IRA with Vanguard. It’ll be easier to keep track of your money, you’ll likely pay lower fees, and IRA money is more accessible than 401K money.
Maintain a savings account with at least three months’ expenses in it; six is better; twelve is probably too much—at that point you’re losing more in growth than you’re gaining from being able to ride out a job loss. But people do differ in how they feel about risk; by all means make it twelve if you’d be happier that way.
If you have recurring credit-card debt (not paid off at the end of each period), pay that down before starting on investing. And for dog’s sake do so right now, that stuff is poison. Consider Lending Club or other peer-to-peer lending services, it is fairly likely that you can get a better rate than your credit card gives you.