I just started out with my first job and I was curious, what is a good time when I should start with my long term saving plans?

Thanks for the advice and I was expecting that answer. So my detailed question would be, how should I plan it? How did you guys go about it? Fixed deposits (safe)? Invest in stock markets? Any advice and personal experiences are welcome!


6 Answers 6


Start as early as possible and you will want to kiss your younger self when you get to retirement age. I know you (and everyone else at that age) thinks that they don't make enough to start saving and leans towards waiting until you get established in your career and start making better money. Don't put it off. Save some money out of each paycheck even if it is only $50.

Trust me, as little as you make now, you probably have more disposable income than you will when you make twice as much. Your lifestyle always seems to keep up with your income and you will likely ALWAYS feel like you don't have money left over to save.

The longer you wait, the more you are going to have to stuff away to make up for that lost time you could have been compounding your returns as shown in this table (assuming 9.4 percent average gain annually, which has been the average return on the stock market from 1926-2010).

Source: ClarkHoward.com

I also suggest reading this article when explains it in more detail: Who Wants to be a millionaire?

  • 1
    $2000 for 6yrs in Roth IRA == $1 Million at 65! Woah!
    – zengr
    Jan 20, 2012 at 15:00
  • 4
    Exactly. Time is your friend, my friend. Don't waste it. However, another factor you have to consider is that $1M in 40 years is not going to seem like nearly as much as it does today. You know how grandpa always says that a burger used to cost a nickel? You will sound just as nuts when you say it cost $5 to your grandkids who are paying $50
    – JohnFx
    Jan 20, 2012 at 17:20
  • 2
    Trust me, as little as you make now, you probably have more disposable income than you will when you make twice as much.: That's hyperbole.
    – Jim G.
    Feb 18, 2014 at 3:27

Start now. It's a lot easier to save now than it is to start to save later.

  • 4
    This excellent advice has two aspects. One, usually noted, is that the money you save now has a long time to compound. The other is that you will get used to living on less than your whole income, so you will need less income later. Jan 21, 2012 at 5:47
  • 5
    "The best time to plant a tree is 20 years ago. The second best time is today."
    – johnny
    Jan 30, 2012 at 23:12

Start as soon as you can and make your saving routine. Start with whatever you feel comfortable with and be consistent. Increase that amount with raises, income gains, and whenever you want.


Does you job offer a retirement plan? (401k, SIMPLE, etc) Does your employer offer a match on contributions?

Typically an employer will match what you put in, up to a certain percentage (e.g. 3%). So, say you contribute 3% of your paycheck into your retirement plan. If your employer mathes that, you've effectively contributed 6%. You've just doubled your money!

The best thing a young professional can do is to contribute to your employer-matched retirement plan, up to the maximum amount they will match. You should do it immediately. If not, you are leaving money on the table.


Here's a good strategy:

Open up a Roth IRA at a discount-broker, like TD Ameritrade, invest in no-fee ETF's, tracking an Index, with very low expense ratios (look for around .15%) This way, you won't pay brokers fees whenever you buy shares, and shares are cheap enough to buy casually.

This is a good way to start. When you learn more about the market, you can check out individual stocks, exploring different market sectors, etc. But you won't regret starting with a good index fund. Also, it's easy to know how well you did. Just listen on the radio or online for how the Dow or S&P did that day/month/year. Your account will mirror these changes!

  • +1 for thinking about MERs ... having .15 or so compared to ~2% makes a huge difference in the long run :)
    – Jedidja
    May 22, 2013 at 20:40

My basic rule I tell everyone who will listen is to always live like you're a college student - if you could make it on $20k a year, when you get your first "real" job at $40k (eg), put all the rest into savings to start (401(k), IRA, etc). Gradually increase your lifestyle expenses after you hit major savings goals (3+ month emergency fund, house down payment, etc).

Any time you get a raise, start by socking it all into your employer's 401(k) or similar. And repeat the above advice.

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