Here are some of the most common questions I have received so far from people between 20-27:

How much should I save?

There is no specific percentage that you should be saving. The real answer is as much as you can. The problem is, clients don’t want to hear that. They want a magic number. So, as my way of meeting you half way I’ll give you a number. 10% minimum. This is if you’re investing pre-tax (see this article for more details). If you’re investing in a Roth account, then you probably only need 8% at first. But don’t be discouraged if you can only get to 5% or so. The habit of saving is the most important thing you can learn here, even if it’s not enough for now.

How do I know where to save it?

If your company has a 401(k), then that’s probably the easiest way to save. Most companies match contributions. So, if you put in 6% you’ll likely get a company match of 3 or 4%. If your company doesn’t have a 401(k), then you can start an IRA. An IRA is essentially a personalized version of a 401(k), and they are very easy to start. With some companies, you can have an IRA opened for free and ready to go in less than 20 minutes.

How can I know what to invest in?

The investments are the tricky part, but companies have made it much easier in recent years. They have funds that do all the hard work for you. Take for example a Target Retirement 2040 Fund. This would be a mutual fund that invests as if you’re going to retire in the year 2040. It does all the work for you. They typically have low fees and are designed for you to never have to manage them at all. It’s a very simplified version of the complex market investing you hear about on TV or on the radio. It’s a nice way to start for people that want to invest, but are afraid of making a dumb mistake and losing all of their money. You won’t triple your money overnight, but you won’t have to worry about investing either.

Once you have your feet wet, any financial planning company that you have an IRA with will help teach you about investments and what’s right for you. They make money off of keeping you as a customer for a long time, so they’re always willing to help you get started (as a side note, it takes most companies a few years to make any profit off of an IRA, so they’ll do ANYTHING to keep you there for that time!).

How do I know what company to open an IRA with?

Most people just ask their parents, and whatever they say is what goes. That’s not a bad strategy, but it can backfire in a heartbeat. It’s like them picking a boyfriend or girlfriend for you. Tread softly with your parents recommendations. Find what works best for you.

There are two types of companies. First, there are those who charge you a fee for doing a financial plan. These are good because they get into details about your life and will actually train you one on one on how to invest and how to make money. The downside is the price. The other type is the kind of company that doesn’t charge fees. It’s nice because it’s a cheap and easy way to invest. The downside is that it’s not a high level of service and not much details on your financial life. You pick what’s best for you. If you’re someone that goes head first into something, a fee-based advisor is great. If you want to be careful and test the waters, a non-fee based advisor will ease you into the world of financial planning.

What should I look for in an advisor?

Someone you trust and are comfortable with. They’re all smart people, but you have to feel good about them. It’s really that simple.

Keep your questions coming! For more articles on investing, retirement and mutual funds, check out our investing section here.