1. Have 3-6 months of living expenses in a savings or money market account.
2. Max out contributions to any employer retirement plan you have and start an IRA.
3. Determine your risk tolerance by using an asset allocation calculator you can find online from institutions like Vanguard and Fidelity.
4. Based on what your allocation is, invest in low cost index stock and bond funds.
5. Rebalance your allocation when it varies by 5 percentage points so you will be forced to sell high and buy low.
6. Ignore advice to make a quick killing in an investment you don’t understand
7. Don’t buy an asset because a neighbor, friend, or relative told you how great it is.
