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A fine time to acknowledge Scott Adams’ remarkably simple and clear financial advice: https://www.mattcutts.com/blog/scott-adams-financial-advice/

I think it is pretty good.

You can, of course, debate it - and HN being HN people probably will.

>>stevos+(OP)
Here it is, unabridged

    Make a will.

    Pay off your credit card balance.

    Get term life insurance if you have a family to support.

    Fund your company 401K to the maximum.

    Fund your IRA to the maximum.

    Buy a house if you want to live in a house and can afford it.

    Put six months’ expenses in a money market account.

    Take whatever is left over and invest it 70 percent in a stock index fund and 30 percent in a bond fund through any discount brokerage company and never touch it until retirement

    If any of this confuses you, or you have something special going on (retirement, college planning, tax issue), hire a fee-based financial planner, not one who charges you a percentage of your portfolio.

>>emil-l+p8
Solid advice overall. But I have to disagree with the 401k advice.

> Fund your company 401K to the maximum.

Fund it up to amount your company matches. The maximum you can contribute to 401k is 40% of your salary I believe. I wouldn't contribute 40% of my salary to the 401k. Just the amount your company matches ( 5% or whatever it is for your company ). That 5% match ( or whatever it is ) is free money. It would be foolish to leave it on the table.

>>hearsa+uh
So if your company doesn't match your contribution then contribute nothing to 401k?

>>latefo+ho
Not American, but as I understand it, 401k's are tied to your employers 401k implementation and while you are employed you have little choice in how the funds are managed. If you are contributing to a third party managed fund (employer or otherwise) that is not being matched, then you are ceding control of your retirement funds for no practical benefit. You would be better off putting your savings into another tax shelter appropriate to your needs that you can control.

If you aren't getting a matching benefit or other reward for using an employer managed investment, then you shouldn't. If someone doesn't have the time, inclination, or knowledge to understand the difference then investing in an unmatched 401k is still better than not saving at all :S

>>ygjb+Nw
Tacking on, in evangelical circles Dave Ramsey's financial peace university talks about saving 15% of retirement when getting out of debt and generally working through that list, then once you have paid off the house, build more retirement wealth as you desire...most of us don't get to that point until later in life.

>>Multic+JJ
There is also the rent vs buy calculation to take into account, depend on where you live, it might make more sense to rent and invest the difference than buying.

>>Izikie+1W
Especially now since the mortgage interest deduction is less than the standard deduction for most people.