I am young, just started my career, and looking to begin investing so I can make my money work for me. I'm still living like I did in college (occasional purchase on myself, but most of it goes into savings) and I would like to take the extra money and invest it.

What would you suggest are the best options for me to begin? I was considering getting a personal investor [a financial advisor] for perhaps a year or so, but I've heard that they really are not worth the money. I wanted to get the input of the great minds here.

  • 37
    To help you, it is first important to understand your investment goals. That is, why are you investing (Retirement, college for you or kids, buy a house, rainy-day fund, wedding expenses, etc.)? This will define your time horizon and in turn what investment options are appropriate. If you can add that detail to your question I'll take a shot at giving an answer.
    – JohnFx
    Commented May 13, 2010 at 13:02
  • 5
    Which country are you in
    – Pepone
    Commented Oct 6, 2015 at 20:24
  • Similar to @JohnFx, it's also important to understand your overall financial goals. These will help define your investment goals. They'll also help keep you motivated during the hard times.
    – Corey P
    Commented May 2, 2019 at 16:21

18 Answers 18


First off, I highly recommend the book Get a Financial Life. The basics of personal finance and money management are pretty straightforward, and this book does a great job with it. It is very light reading, and it really geared for the young person starting their career. It isn't the most current book (pre real-estate boom), but the recommendations in the book are still sound. (update 8/28/2012: New edition of the book came out.)

Now, with that out of the way, there's really two kinds of "investing" to think about:

  1. Retirement (401k, IRA, SIMPLE, etc)
  2. Non-Retirement (Brokerage account, investing in individual stocks, day trading, etc)

For most individuals, it is best to take care of #1 first. Most people shouldn't even think about #2 until they have fully funded their retirement accounts, established an emergency fund, and gotten their debt under control.

There are lots of financial incentives for retirement investing, both from your employer, and the government. All the more reason to take care of #1 before #2!

Your employer probably offers some kind of 401k (or equivalent, like a 403b) with a company-provided match. This is a potential 100% return on your investment after the vesting period. No investment you make on your own will ever match that. Additionally, there are tax advantages to contributing to the 401k. (The money you contribute doesn't count as taxable income.)

The best way to start investing is to learn about your employer's retirement plan, and contribute enough to fully utilize the employer matching.

Beyond this, there are also Individual Retirement Accounts (IRAs) you can open to contribute money to on your own. You should open one of these and start contributing, but only after you have fully utilized the employer matching with the 401k. The IRA won't give you that 100% ROI that the 401k will.

Keep in mind that retirement investments are pretty much "walled off" from your day-to-day financial life. Money that goes into a retirement account generally can't be touched until retirement age, unless you want to pay lots of taxes and penalties. You generally don't want to put the money for your house down payment into a retirement account.

One other thing to note: Your 401K and your IRA is an account that you put money into. Just because the money is sitting in the account doesn't necessarily mean it is invested. You put the money into this account, and then you use this money for investments. How you invest the retirement money is a topic unto itself. Here is a good starting point. If you want to ask questions about retirement portfolios, it is probably worth posting a new question.

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    For $4 + free Amazon prime shipping, I cannot pass up that book. Thanks for mentioning it! Commented Aug 13, 2010 at 0:05
  • 7
    I'm from India, Does the book you suggested suits me too? I'm looking for a book that teaches me a,b,cs of stock markets , buying & selling shares.
    – claws
    Commented Jan 24, 2011 at 21:10
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    @msemack Just wanted to thank for the suggestion of Get a Financial Life. I've started reading it this week and I can not put it down. So much helpful advice! There is some out dated material but I still find the information on investing and evaluating rent vs buy very helpful. Thanks again.
    – Eric
    Commented Jul 26, 2011 at 3:30
  • 3
    A new version has been released - amazon.com/Get-a-Financial-Life-ebook/dp/B001UP63MS
    – Eric
    Commented Aug 27, 2012 at 18:02
  • 5

First I'd like to echo myron-semack's answer. Start by maxing out your 401K and IRA contributions. Not a lot of people just starting their career have the luxury of doing much more outside of that. Here are some additional tips that I learned when I was just getting started:

  • When I was starting out with investing, I read Benjamin Graham's book "The Intelligent Investor." One of the first points he makes in the book is that there's a mutually exclusive difference between investors and speculators. Resist the temptation to become a speculator. Investors put their money in sound financial securities with good long term earning potential. Speculators buy and sell their financial securities with an eye towards the shorter term swings in performance (whether market-wide or in individual companies or industries). Investors earn money from the companies they invest in and the profits from their goods and services. Speculators earn money more from each other... which is a zero-sum game.
  • Start by investing in a diversified mutual fund or index fund. It's better to start diversified (money spread across different instruments, industries, and company sizes) than trying to build your own diversified portfolio from scratch.
  • Don't get into buying individual stocks until you can read and comprehend a financial statement from that company. You should really understand that company's business model and prospects before committing to becoming a part owner of that company.
  • Don't be tempted to buy or sell a stock based solely on a recent rise or fall in that stock's price. Leave it to the speculators to beat each other up trying to capitalize on short-term movements in price.
  • If you are buying a stock or other security, it should be for the purpose of holding that security for the long haul.
  • Once you buy a stock, don't look at the price of that stock... instead follow the company and make a judgement for yourself whether that company is headed in the right direction.
  • It's nearly impossible to consistently "beat the market". That would mean that you as an individual know more than the collective whole of the market. Treat any advice that claims to allow you to beat the market with a wary eye. Along the same line, starting with an index-based fund (a fund that closely follows an index like the NASDAQ or S+P 500) is a great way to start and guarantee that your returns will not lag the market (significantly) long term.
  • Learn the power of "cost averaging" - that is investing the same amount consistently every month/quarter regardless of the current performance of the market. This has the effect of buying more shares when the market is down, without needing to predict when the "bottom" is and potentially "missing the market".
  • Invest your money in different instruments depending on the time horizon for your savings goal. For savings goals that are more imminent (e.g. for a car, boat, or house downpayment), invest in safer, more guaranteed instruments like bonds and CDs (certificates of deposit). For long term goals (retirement), get a bit riskier (stocks, mutual funds, ETFs (exchange traded funds)).
  • 38
    Thank you for posting advice other than "maximize retirement savings" (which is very US-specific).
    – Steed
    Commented May 15, 2013 at 17:50
  • @Mike, you state that speculating is bad. Now, how do hedge funds make money?
    – Pacerier
    Commented Nov 27, 2013 at 8:29
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    @Pacerier - I didn't really say that is was bad. For certain entities, it's a perfectly good way to make money in markets. In the context of the question and given that the OP isn't a finance professional, my argument is to avoid speculating.
    – Mike Piche
    Commented Dec 6, 2013 at 20:33
  • 1
    Also, worth mentioning is to not limit yourself to the domestic market. There are great stocks/funds in other currencies.
    – GUI Junkie
    Commented Oct 6, 2015 at 10:06
  • This is great advice. Just finished The Intelligent Investor a month ago and can say that this was the best investing book I’ve read yet.
    – Jack Moody
    Commented Feb 4, 2018 at 1:18

First, congratulations on even thinking about investing while you are still young! Before you start investing, I'd suggest you pay off your cc balance if you have any. The logic is simple: if you invest and make say 8% in the market but keep paying 14% on your cc balance, you aren't really saving.

Have a good supply of emergency fund that is liquid (high yielding savings bank like a credit union. I can recommend Alliant).

Start small with investing. Educate yourself on the markets before getting in. Ignorance can be expensive.

Learn about IRA (opening an IRA and investing in the markets have (good)tax implications. I didn't do this when I was young and I regret that now)

Learn what is 'wash sales' and 'tax loss harvesting' before putting money in the market.

Don't start out by investing in individual stocks. Learn about indexing.

What I've give you are pointers. Google (shameless plug: you can read my blog, where I do touch upon most of these topics) for the terms I've mentioned. That'll steer you in the right direction.

Good luck and stay prosperous!

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    The only debt I have is small student loan at 6% and a mattress that I'm paying on 0% financing for 24 months. I pay my credit card off each month so no worries there. My emergency fund is about 6 months worth if I were to lose my job or have an unexpected purchase. I guess to further add to the question, what is the best way to educate myself with the market? I'll be sure to readup on your blog. Thank you!
    – Eric
    Commented May 14, 2010 at 4:26
  • 1
    Eric, there a lot of good beginners books available. I can recommend 'The Only Guide to a Winning Investment Strategy You'll Ever Need - by Larry Swedroe'. A lot of books are hard to read, this one was very readable.
    – MoneyCone
    Commented May 14, 2010 at 12:02
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    @Kevin - there is no study that provides sufficient data to shoe people spend more on cards. There are cute studies about how college kids in contrived experiments will spend $8 in gift cards vs $5 with cash, but this hardly translates to an adult spending $5000/mo and running through a card instead of carrying wads of cash. Commented May 8, 2011 at 1:42
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    @Eric U. - for a second there I thought you were crazy for having debt on a mattress. But hey, 0% for 24 months ... I'll take that kind of debt any day.
    – Stainsor
    Commented May 10, 2011 at 16:58
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    Am I the only one who feels like mentioning credit card debt is sort of insulting? It's quite obvious that credit card debt should be the first thing to go when you start making money... Just my thoughts.
    – user606723
    Commented Aug 18, 2011 at 13:38

Not 100% related, but the #1 thing you need to avoid is CREDIT CARD DEBT.

Trust me on this one. I'm 31, and finally got out of credit card debt about eight months ago.

For just about my entire 20s, I racked up credit card debt and saved zero. Invested zero.

It pains me to realize that I basically wasted ten years of possible interest, and instead bought a lot of dumb things and paid 25% interest on it.

So yes, put money into your 401k and an IRA. Max them out.

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    Avoid all debt. Use credit if you like, but avoid debt.
    – MrChrister
    Commented Apr 21, 2011 at 17:21
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    This seems to be a far bigger problem in the US.
    – greg121
    Commented Dec 2, 2014 at 10:10
  • 10
    Probably a bigger problem in the US because they hand our credit cards like candy.
    – Jack
    Commented Dec 3, 2014 at 22:11
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    @MrChrister I disagree with "Avoid all debt". Never go into debts is actually not a good advice, it would mean never buying a flat/house etc...
    – dyesdyes
    Commented May 30, 2017 at 15:33
  • 3
    Perhaps avoiding high interest debt is a better way to look at it? It's been years but I now have a lot of cred card debt again, all at 0%. It was to produce a film I wrote.
    – Jack
    Commented May 30, 2017 at 18:26

Warren Buffett answered this question very well at the 2009 Berkshire Hathaway annual meeting. He said that it was important to read everything you can about investing. What you will find is that you will have a number of competing ideas in your head. You will need to think these through and find the best way to solve them that fits you.

You will mostly learn how to invest through good examples. There are fewer good examples out there than you might think, given how many books there are and how many people get paid to give advice in this area. If you want to see how professional investors actually think about specific investments, over a thousand investment examples can be found at www.valueinvestorsclub.com, just login as a guest. The site is run by Joel Greenblatt (you would benefit from reading his books also), and it will give you a sense of the work that investors put into their research.

Good luck.

  • Do you have a link / source for Warren Buffett's response? Thanks!
    – mchangun
    Commented Oct 12, 2018 at 13:48

The most important thing is to start. Don't waste months and years trying to figure out the "optimal" strategy or trying to read all the best books before you start. Pick a solid, simple choice, like investing in your company sponsored 401(k), and do it today.

This I Will Teach You To Be Rich post on barriers has some good insight on this.

  • 1
    +1 for the good link. However, I think its important to spend at least some time reading to avoid bad strategies (ie. investing while having lots of high-interest/credit card debt).
    – Pete
    Commented Sep 2, 2010 at 19:12
  • That's true. You don't want to max out your 401(k) while you have $30k in credit card debt. I was referring more to things like worrying if you should invest in a Roth IRA or a traditional IRA. The "Save More Tomorrow" plan from the book <a href="amazon.com/Nudge-Improving-Decisions-Health-Happiness/dp/…> by Thaler and Sunstein is another take on to overcome barriers to <a href="en.wikipedia.org/wiki/… savings.</a> Commented Sep 2, 2010 at 21:25
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    Add links with text like this [link name ](link url), so nudge and retirement savings
    – Pete
    Commented Sep 6, 2010 at 1:16

I would personally suggest owning Mutual Funds or ETF's in a tax sheltered account, such as a 401k or an IRA, especially Roth options if available. This lets you participate in the stock market while ensuring that you have diversified portfolio, and the money is managed by an expert. The tax sheltered accounts (or tax free in the case of Roth accounts) increase your savings, and simplify your life as you don't need to worry about taxes on earnings within those accounts, as long as you leave the money in.

For a great beginner's guide see Clark's Investment Guide (Easy).


This is a tough question, because it is something very specific to your situation and finances.

I personally started at a young age (17), with US$1,000 in Scottrade.

I tried the "stock market games" at first, but in retrospect they did nothing for me and turned out to be a waste of time.

I really started when I actually opened my brokerage account, so step one would be to choose your discount broker. For example, Scottrade, Ameritrade (my current broker), E-Trade, Charles Schwab, etc. Don't worry about researching them too much as they all offer what you need to start out. You can always switch later (but this can be a little of a hassle).

For me, once I opened my brokerage account I became that much more motivated to find a stock to invest in.

So the next step and the most important is research! There are many good resources on the Internet (there can also be some pretty bad ones).

Here's a few I found useful: Investopedia - They offer many useful, easy-to-understand explanations and definitions. I found myself visiting this site a lot.

CNBC - That was my choice for business news. I found them to be the most watchable while being very informative. Fox Business, seems to be more political and just annoying to watch. Bloomberg News was just ZzzzZzzzzz (boring).

On CNBC, Jim Cramer was a pretty useful resource. His show Mad Money is entertaining and really does teach you to think like an investor. I want to note though, I don't recommend buying the stocks he recommends, specially the next day after he talks about them. Instead, really pay attention to the reasons he gives for his recommendation. It will teach you to think more like an investor and give you examples of what you should be looking for when you do research.

You can also use many online news organizations like MarketWatch, The Motley Fool, Yahoo Finance (has some pretty good resources), and TheStreet. Read editorial (opinions) articles with a grain of salt, but again in each editorial they explain why they think the way they think.

  • 1
    +1 Great read and suggesting not to buy stocks that someone else suggest(learn to pick stocks yourself). Commented Oct 12, 2014 at 18:44
  • 1
    Curious why these links are all to WikiPedia articles and not the actual broker sites? Commented Oct 12, 2014 at 19:34
  • 2
    "Stock market games" tend to be very short-term (a month to maybe a year), which means that in order to be successful, you have to either be very lucky, or successfully time the market, or both. Stock market investments should be done with an investment horizon of 5+ years to ensure that even if you buy at a slightly less good moment, the stocks will have time to go back up in price. Once you are looking at an investment horizon of less than five years, you should seriously consider other types of investments; if under a year, even today I would strongly suggest the good old savings account.
    – user
    Commented Mar 4, 2016 at 10:20
  • 2
    Jim Cramer is only right 48% of the time...
    – qazwsx
    Commented Mar 19, 2021 at 21:05
  • 1
    Recommending Jim Cramer? Seriously? The guy's a clown. Commented Nov 30, 2021 at 9:23

If your employer offers a 401(k) match, definitely take advantage of it. It's free money, so take advantage of it!


I started my career over 10 years ago and I work in the financial sector. As a young person from a working class family with no rich uncles, I would prioritize my investments like this:

  1. Achieve the full 401k match at your work.
  2. Fully fund your emergency savings (a full 6 months of expenses). I personally count up to $5,000 of my HSA funds toward this amount since you can pay COBRA insurance continuation payments with your HSA. The cash portion needs to be liquid and available in a time of crisis. Your options for where to put this money are the following (in order of increasing financial complexity):
    • checking account
    • savings account
    • money market
    • I Bonds (from treasurydirect.gov. Not to be confused with TIPS, which have higher risks)
  3. Pay off all high-interest debt, starting with the highest interest. A good rule of thumb is to pay off everything with an interest rate over the prevailing rate on a 30-year fixed rate mortgage.
  4. Pay off PMI if you have a mortgage.
  5. Roth IRA (optional, tricky). Target date funds are ideal.
  6. Additional 401k contributions.
  7. Backdoor Roth IRA contributions. Your employer must support an "after tax contribution", not to be confused with a Roth contribution. They also need to allow in-service 401k rollovers.
  8. I Bonds (again, from treasurydirect.gov).
  9. Pay off your mortgage.
  10. Target date ETFs in a brokerage account. Talk to an accountant before selling.

It seems to be pretty popular on here to recommend trading individual stocks, granted you've read a book on it. I would thoroughly recommend against this, for a number of reasons. Odds are you will underestimate the risks you're taking, waste time at your job, stress yourself out, and fail to beat a target date index fund. It's seriously not worth it.

Some additional out-of-the box ideas for building wealth:

  1. Find a place to live with a low cost of living and a good job market for what you do. The idea is to maximize your savings. The Bureau of Labor Statistics publishes incredibly detailed information on how many people of a given career are working in a given metropolitan area, along with how much money they're making ("Occupational Employment Statistics"). They even break it down into 10th, 25th, median, 75th, and 90th percentiles. As someone starting their career, expect to make something on the lower end.
  2. Change jobs every couple years and be a good negotiator. Loyalty doesn't pay what it used to and you're worth it.
  3. Figure out how to cook delicious, healthy food on the cheap. Get good at cooking breakfast -- it's the cheapest meal you can cook, the ingredients keep for months, and you can even have it for dinner (brinner!). Cooking breakfast on the weekend is certainly a big reason why my girlfriend sticks around.
  4. Exercise. There's a lot of wisdom behind the "health is wealth" mantra. Experiment with different types of exercise (running, hiking, cycling, tennis, soccer, HIIT, yoga, Pilates, strength training, OrangeTheory, CrossFit, etc). Find something you don't mind doing at least 3 days/week.
  5. Travel on the cheap by exploring nearby parks and trails. There's incredible beauty just beyond your doorstep.

Self-serving bias is pervasive in the financial world so be careful about what others tell you about what they know. Good luck.

  • This nearly 9 year old question popped up when you edited. Mine is the DV, as the brief reference to target date funds is tough for me. Expenses aside (I know some are quite low) it's trusting a 3rd party to decide on asset mix in a way I usually find to be too conservative. Commented Feb 19, 2019 at 13:25
  • @JoeTaxpayer you downvoted because you disagreed with a small nuance of my answer? Fair enough. I'm curious if you have any theories why you think target date funds are chronically conservative? Also curious on your philosophy around how a young person managing a presumably small portfolio should place a value on their time? Commented Feb 20, 2019 at 14:55
  • It was a knee-jerk reaction, and in hindsight, unfair. I needed to edit to unlock my vote, and have reversed it. I've reached the anti-target date stance over time. They are not consistent with each other, and in my opinion, don't address the individual's risk tolerance well enough. As far as time goes, better to put that time in early to help learn, so when it's big bucks, one is prepared to handle it. Commented Feb 20, 2019 at 15:01

Adding to the very good advises above - Concentrate on costs related to investment activity. Note all expenses and costs that you pay. Keep it low.


When you start to buy stock, don't buy too little of it! Stocks come at a cost (you pay a commission), and you need to maintain a deposit, you have to take these costs into account when buying to calculate your break even point for selling. Don't buy stock for less than 1.500€

Also, diversify. Buy stock from different sectors and from different geographies. Spread your risks. Start buying 'defensive' stocks (food, pharma, energy), then move to more dynamic sectors (telecom, informatics), lastly buy stock from risky sectors that are not mature markets (Internet businesses).

Lastly, look for high dividend. That's always nice at the end of the year.

  • 17
    I would add the warning that buying individual stocks is risky and probably a bad idea unless you really know what you are doing. As a rule of thumb, I would say that if you are asking questions about it on internet forums, you probably shouldn't be buying individual stocks.
    – Kevin
    Commented Apr 21, 2011 at 18:12
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    +1 Kevin. "Never put all your eggs in one basket" is the golden rule for investing.
    – GUI Junkie
    Commented Apr 27, 2011 at 16:32
  • 1
    @Kevin, you probably shouldn't be buying anything unless you really know what you are doing - that includes buying into mutual funds.
    – Victor
    Commented Apr 15, 2013 at 22:17
  • 3
    @Victor, yes this is true. You should always understand anything you are putting your money into. My main point here though, is that there is a lot more to learn about buying individual stocks than their is about mutual funds. Not to mention the amount of "maintenance" work to keep up with the individual stocks to know when to buy more, sell, etc.
    – Kevin
    Commented Apr 16, 2013 at 14:52
  • 2
    Stock picking is fool's game. Best thing one can do is buying the index. Index investing is cheap and efficient. SIPing the index is the best of option for a person who gets monthly salary. Bad timing of the purchase and one can get the benefit of dollar cost averaging.
    – shravan
    Commented Oct 6, 2015 at 4:47

I tell you how I started as an investor: read the writings of probably the best investor of the history and become familiarized with it: Warren Buffett.

I highly recommend "The Essays of Warren Buffett", where he provides a wise insight on how a company generates value, and his investment philosophy. You won't regret it!

And also, specially in finance, don't follow the advice from people that you don't know, like me.

  • Is this answer supposed to be funny or not? I'm confused.
    – cst1992
    Commented Aug 16, 2017 at 13:09
  • 2
    @cst1992 confusion disappears with a bit of sense of humour
    – Escachator
    Commented Sep 28, 2017 at 13:09
  • 1
    The company of Warren Buffet, Berkshire Hathaway, by the way is probably the world's cheapest actively managed fund. Much cheaper than most index funds.
    – juhist
    Commented Apr 27, 2018 at 16:15
  • @juhist Yes, but their A share is quite expensive. There should be an ETF which just holds 5 BH A shares for 50,000 ETF shares (or something alike).
    – glglgl
    Commented Mar 4, 2020 at 20:48

Conventional wisdom says (100-age) percentage of your saving should go to Equity and (age) percentage should go to debt. My advice to you is to invest (100-age) into index fund through SIP and rest in FD. You can re-balance your investment once a year.

Stock picking is very risky. And so is market timing.

Of cource you can change the 100 into a other number according to your risk tolerance.

  • 1
    Why do you think stock picking is risky? If you pick enough many stocks and don't trade, you have built yourself a passively managed fund with extremely low costs.
    – juhist
    Commented Apr 27, 2018 at 16:01
  • @juhist Extremely low costs? With that many stocks? IBTD.
    – glglgl
    Commented Mar 4, 2020 at 20:49

and looking to begin investing so I can make my money work for me

Suppose that you are currently making 50k annually from your work. To make "your money work for you", you need to have a money that is much enough to return 50K annually (for example on an interest rate of 10% you will need to have 500k) So you should first consider making that amount of money, then we come to the main question

What is the best way to start investing ?

Short answer:

Feasibility studies. You must define the options/opportunities you have and study, evaluate and calculate the financial ratios for every one of them, then make your decision based on numbers.

Not short answer:

It's not correct to say that "business x is feasible". Instead, say "opportunity x is feasible" . Because if business x is feasible, sooner or later it will attract more investors till they fill the gap between the demand and supply and reduce the market price of the product and the business will not be feasible anymore.

|year  |supply  |demand   | market price | investing         |
|2019  |700k    |1000k    |100           |feasible           |
|2020  |800k    |1000k    |90            |feasible           |
|2021  |900k    |1000k    |80            |feasible(with risk)|
|2022  |1000k   |1000k    |70 (balanced) |not feasible       |
|2023  |1050k   |1000k    |65            |not feasible       |

So I can't tell you to go and invest in stocks, restaurants or software industry, however I can till you if a Mexican food restaurant in Cairo, Egypt in the next 6 months is a feasible investment or not (and that is what financial consultants do)

Investing in yourself is an option

What if I told you that if you are -for example - holding a Ph.D in your specialty and learned Mandarin language you will increase your income from work by 90k annually ?

I know this is conflicting with your goal as making your money work for you, but I also know that you still young and just started your career (The question is 9 years ago before writing this answer, you could be a Dad by now :D ) , but young and fresh grads without enough money to invest, should consider this options because in most of the cases this is the most feasible option for them.

What should you do now ?

1. define the available investment opportunities

Ask your friends, relatives, google, SE network, yourself what are the investment options that I could invest my money and time in ? and define them in a list of 10-20 items (don't forget to put investing in your career as one of them) .

2. prepare the feasibility studies for these investment opportunists

Feasibility studies cost - specially the market research - , and it's completely insane to prepare 20 detailed feasibility studies (with a market research), but at least you should prepare the Basic study.

Feasibility studies are prepared on 4 major phases

  • basic study (if feasible, start the detailed study)
  • market study (if the market has an opportunity, go to next phase)
  • technical study (if possible, go to next phase)
  • financial study (if feasible, recommend this investment)

Prepare the basic study for your options by searching, asking, making a small market research and estimate the cash-out/cash-in for everyone, then remove the unfeasible ones from the list, and leave the most feasible 1-3 opportunities, then make a file for each study and start preparing the study for these 3 opportunists in much more details, calculate the ratios and finally summarize the results in a table.

|investment opportunity |cost  |cash-out | cash-in | IRR | ROI | NPV | payback period|
|            1          |      |         |         |     |     |     |               |
|            2          |      |         |         |     |     |     |               |
|            3          |      |         |         |     |     |     |               |

1 = Ph.d + some courses 
2 = stock
3 = partnership with my friend in a software company

Remember that the more you invest in the feasibility study itself from your time, money and effort, the less you lose. I have seen millions wasted on unfeasible projects because of bad feasibility studies.

BTW, I used to work in a business advisory firm in Egypt and Saudi Arabia and was responsible for the financial study part of the study, before I quit my job and start my own software business in Arab region market.

I hope I could delever the main point of the answer

Business x is always a good investment is a myth, but opportunity x in time t and market m could be a good investment now. Good investors are hunters of opportunities.


I'm surprised no one has mentioned a robo-advisor like Betterment or Wealthfront for both IRAs and non-retirement investments.

Under the hood, Betterment and Wealthfront are all just Vanguard ETFs, so you could invest in Vanguard ETFs directly and avoid the robo-advisor management fee. But for a small fee that probably pays for itself, Betterment will handle rebalancing and tax loss harvesting for you.

Even better, you can keep your money in line with your ethics with socially responsible portfolios.

For general purpose long-term investments, just set up auto-deposits from your checking account to your robo-advisor and let it bake. As you get more experienced and learn more over the years, you can take a more active role in your investments, but to start today, a robo-advisor is a smart first step.


One word: stocks!

For the long run, there is only one way to go and it's stocks. Bonds and money market instruments pay very low interest rates and are not protected against inflation.

Stocks, on the other hand, are a way to own a small fraction of the world economy. By owning stocks, you are protected against inflation. You also are gaining from the continuous economic growth. Not only that, but also the dividend yields today are higher than bond returns.

If you diversify your purchases in time (so that you don't have a huge lump sum to invest but rather make monthly investments), the risk of buying all of your stocks high and selling all of your stocks low essentially disappears. This is usually what the people advising not to go all in fear.

I would say ignore the conventional wisdom that only (100-age) should go to stocks, and go all in, sans a small emergency fund.

However, if your student loan interest is really 6% and there are no tax deductions, you should consider paying back that first. Stocks yield 8% before taxes meaning usually about 6% after taxes. Personally, I invest in stocks rather than pay back my 0.009% interest rate student loan (variable rate).


In addition to the great point from the answers above, I would like to add few points specific to India

  1. If your employer doesn't have EPF then ask them to provide EPF. This is similar to the 401k in the US. This could be your main retirement fund as the fund and interest accumulated are all tax free.
  2. Buy some amount of Gold jewellery equal in value to your emergency fund. As gold jewellery is part of most Indian families Indian market has few unique things like
    • All established bank offer loan against gold jewellery often at rates lower than personal and home loans.
    • There are many dedicated financial institutions for gold loans that make this process much easier.
    • Gold loans are easy to obtain. You can a gold loan with a bank within 1 or 2 hrs most of the time.
    • It is easy to sell it compared to other assets.
  3. Create a PPF (Public Provident Fund) account. This is tax free and has higher interest rates.This is similar to EPF with the difference that it is fully paid by you, has a lock in period of 5yrs and the maturity period is 15yrs.

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