You won't believe how much money Laura will have if she starts investing at her age.
QUESTION: Laura is 23 and just graduated from college. She can start her 401k plan and can live at home. How much should she put into it?
ANSWER: Our first rule is to be debt free and have 3-6 months of expenses saved up for emergencies. In Baby Step 4, which is where you are, put 15% of your income away for retirement in Roth IRAs and 401k plans, especially if they match. Don’t put money in anything unless you understand it. Don’t do it because anyone said to. Invest in 4 different types of mutual funds (growth, growth and income, aggressive growth, and international) that have good long-term track records.