Tuesday, September 28, 2010

Investing In Your 20s

1. Have an emergency cushion, which should equal about 6 months of living expenses
2. If you don't have access to a 401(k) through work, get a Roth IRA. Set it up so that you contribute an amount automatically each and every month.
3. Pick an investment camp and stick with it. If you lose sleep when you've got a lot of risk, go for a more moderate stance. But youth means there is a lot of time to weather the ups and downs of the stock market, so overall you can be more aggressive than your parents or older coworkers.
4. Set a target date retirement fund. It is risky early, then as you approach retirement, becomes more conservative. If you are cool with risk, set a target date slightly after your target retirement, if you want conservative sooner, set an earlier date.