Max out your 401k NOW!!!!!
At your age you have every advantage.
Consisder the simple " rule of 72"
Your average annual return, divided by 72, equals the number of years it takes for an intial investment to double in value with no further contribution.
I.E. $10,000 earning a 10% return annually, which is the dow jones average over any 20 year period, will double in value in 7.2 years, then double in another 7.2, and so on.
If you chart that out you can see why the investments you make in your 20's are the most important ones you'll ever make since time is on your side, wait 10-12 years till your married, have kids, and strat thinking you oughtta start investing for retiremnet and you wasted some VERY CRITICAL YEARS....
Secondly; don't be to smart for your own good.
People hire someone to roof their house, fix their plumbing, repair a transmssion, mow thier lawn and whatever else...
Yet they take the single most important thing in thier lives, their retirement, and go at it in an ameteur manner, never having enough time to learn enough to do a good job. And none of us will ever have the time to learn the trade like the cream of the crop of fund managers and financial advisors can.
I'm not recommending a brokerage or typical financial advisor because they usually work on fees and commisions paid for by the funds they recommend and not by you, inherently they don't have your best interests at heart and will churn your account in order to generate fees and commisons for themselves.
I'm not recommending you self manage either because emotion inevitably enters your mind and the average investor earns about 4% when the market is earning 10-11% due to panic selling when it's low and opportunistic buying when they hear about the latest hot thing and buy something at it's peak.
If you start hearing about the latest great thing likely it's too late.
Don't fall prey to this.
Do not buy individual company stocks, I know some will disagree but the fund market, managed right is so much safer and can have just as good of returns.
Another thing to keep in mind is that 80% of fund managers don't even stay par with the market sector indexes of the market they work in. WHO manages the fund has alot more to do with the fund than anything else. You want the very best, and even harder is to find these guys who are not in a conflict of interest situation where their pay is dictated by the volume of fund or stock shares they move/sell...
I wish I had have heard about this company years ago
It's
http://www.smart401k.com/
They are geared for the average guy who can't walk in the door and "give" them thier money to invest.
They simply guide you in what to do with your investments and do not control them, it's up to you to follow thier guidance.
They do not accept commisons or fees from any fund or brokerage.
I signed up with them, they run your company profile, find out what options are in your companies 401k plan, and make recommendations for you based on an investor risk profile you fill out through a questionare.
They have sevaral 1000 companies profiles already, and if they don't have yours they will get it.
It's done on a simple flat fee paid quarterly and is not tied to the value of your account. I'm paying a mere $59 a quarter and it's paid me back many, many times over......
The guys names are Rick Edelman and Adam Bold, they are NOT get rich quick guys, you won't see them on late night TV pushing some bullshit plan. They've been in business a very long time (20 plus years) and have an extremely high reputation for honesty and integrity and consistently score in the very top of the industries financial advisor ratings.
I've been in my 401k for 18 years now, have had it maxed out since day one. while I did "ok" for years, I really wasn't satisfied with my returns because I was taking a "do it your self" approach, earning on average about 7-9% return when you consisder that there has never been a 20 year period in the history of the stock market that did not average at least a 10% return per year when averaged over that 20 year period.
Since I figured out that I will never learn enough to manage my money as well as an honest expert that has my best interests at heart and not his, and signed on to smart401k.com, my returns have consistently beat the market average.
Did I mention "START NOW"
And "CONTRIBUTE THE MAXIMUM THEY WILL ALLOW!"