Best Advice I Can Give -- Blogger Edition, Part 10

Here's part 10 of the series from top personal finance bloggers offering their single-best piece of advice.  Today, we'll hear from JLP at All Things Financial.  Here's JLP's advice:

"My best advice is to start saving 10% of your income now.  Just do it!  If you are starting with nothing then take that 10% and open a savings account.  Faithfully deposit 10% of your income with every single paycheck. 

Watch it grow. 

Keep saving until you have at least 3 months of living expenses in your savings account.  Once you have reached that threshold, start saving towards your retirement.  Open a Roth IRA and contribute to your 401(k).  If your company matches, contribute up to your 401(k) first (up to the match) and put the rest in a Roth IRA.  If your company does match, don't count the match as part of your 10% savings goal.  Instead, make it extra.  With each raise, adjust your savings to make sure it stays at 10%. 

Make sure you invest in the stock market.  There is no better way to build long-term wealth than through a prudent investment strategy using stocks and stock mutual funds.

It sounds simple.  That's because it is simple.  Don't make it harder than it has to be.  Now start saving!"

How can I disagree with great advice like this?  As JLP says, start today.  Ten years from now, you'll be happy you did.  Very happy in fact.

Click here to read part 11.

Comments

[Jose Anes]

This concept is very well stressed on The Wealthy Barber Book.

A review on:
http://aneshome.com/pivot/entry.php?id=123

[Anonymous]

As simple, straightforward advice goes, this one is excellent. However, there are two things that I would add. First, don't ever let the fact that you can't figure out where the 10% will come from stop you. If your company matches the first 4% you put in your 401(k), start at 4%. Put a huge chunk of each raise into savings until you get up to your goal.

Second, there's absolutely nothing wrong with exceeding 10%. Saving and investing more than 10%, especially early when compounding can do you the most good, just gets you to the goal faster.