Money for the Rest of Us

There is a great comment today over at Ramit’s blog. There is a bit of a debate going on about the current market and yesterday’s drop and whether this is the beginning of a recession. Check out comment number 7:

Index Funds.

Tax deferred accounts.

Automatic re-occurring investments into the fund(s).

Forget about it till you want to retire.

For a young person in a low tax bracket, this is the way to go. These are the 4 Steps to a comfortable retirement. That’s it. I’m going to repeat them again because I like them so much:

1. Set up and invest in Index Funds
2. Use Tax Deferred accounts
3. Set up automatic (recurring) investments
4. Leave it alone until you want to retire.

Granted, things can get a little more complicated than this as time goes on (for instance, when your salary increases you should increase the amount you invest). But, initially, this is all there is to it.