* Maximum contribution percentage to a 401k, whenever possible.
* Maximum contribution to a Roth IRA. The 401k reduces your AGI, allowing this until you reach quite a nice income level. Even during unemployment, I contribute to my Roth IRA.
* Reduce fees! 0.25% interest is wiped out by a single $9.95 fee. I've moved to Charles Schwab for personal money, since they have no balance fees, decent investment options, and they fully refund all ATM fees around the world. I've rolled over old 401k's into a Vanguard IRA, since Vanguard has the lowest fund management fees in the industry.
* Don't be jumpy. If you're like me, you're actually horrible at individual stock investment. So, stick to mutual funds, and only look at them and reinvest once or twice per year. I suggest looking at targeted retirement funds (like the Vanguard 2040 that I use), and index funds.
* Keep 1 - 2 years of cash on hand. Everyone used to laugh at this figure, since who would be unemployed that long? That cash means that, instead of sitting at home, waiting for the market to improve, I was able to sell my stuff and spend extended periods traveling.
Most of you on HN are quite young. The younger you are, the more valuable it is to begin investing right now. Hell, if you're 17, do everything you can to throw $500 into an IRA. Even if you're working at McDonald's and dreaming of a startup, you can use an IRA contribution to cut your taxes.
1-2 years cash on hand sounds excessive, though I understand your point. FWIW, I keep approximately 6 months cash on hand and another year's worth in something slightly less liquid but still liquid enough I could get to it in <6 months time. Like a CD ladder.
* Maximum contribution percentage to a 401k, whenever possible.
* Maximum contribution to a Roth IRA. The 401k reduces your AGI, allowing this until you reach quite a nice income level. Even during unemployment, I contribute to my Roth IRA.
* Reduce fees! 0.25% interest is wiped out by a single $9.95 fee. I've moved to Charles Schwab for personal money, since they have no balance fees, decent investment options, and they fully refund all ATM fees around the world. I've rolled over old 401k's into a Vanguard IRA, since Vanguard has the lowest fund management fees in the industry.
* Don't be jumpy. If you're like me, you're actually horrible at individual stock investment. So, stick to mutual funds, and only look at them and reinvest once or twice per year. I suggest looking at targeted retirement funds (like the Vanguard 2040 that I use), and index funds.
* Keep 1 - 2 years of cash on hand. Everyone used to laugh at this figure, since who would be unemployed that long? That cash means that, instead of sitting at home, waiting for the market to improve, I was able to sell my stuff and spend extended periods traveling.
Most of you on HN are quite young. The younger you are, the more valuable it is to begin investing right now. Hell, if you're 17, do everything you can to throw $500 into an IRA. Even if you're working at McDonald's and dreaming of a startup, you can use an IRA contribution to cut your taxes.