Move #15 [Establish an emergency fund] to #2. #9 conflicts with #17 so add #36 Ignore broad-based rule lists like this one.

rolltimer

I agree with Rolltimer. Next to paying down debts, establishing an emergency fund of 3-6 months worth of expenses should be your next goal. You will never get ahead if financial emergencies are constantly forcing you to borrow money.

I have mentioned Dave Ramsey on Lifehacker before, and I'll do it again. His system has helped us pay off thousands in debt in a short amount of time, establish a good emergency fund and invest for the long-term. I would recommend his books to anyone who wants to turn their financial lives around.

eeefresh

If you want to try out your stock trading, sign up with an account with Zecco. Free trades, money market, etc. You can open as many accounts, but only the first one is free.

Hell, use "veamon" as your referral and get me some bonus signups :)

holymogwai

@HOLYMOGWAI:
trades are not free any more. You have to have a minimum balance of $2500 to be eligible for 10 free stock trades a month.

bnosach

This site casually assumes that you want to be investing in individual stocks. I don't think the average person should invest in stocks (or anything) unless they understand what they are doing, and really understanding the world of stocks and the stock market takes a significant investment of time. If you do invest in stocks without taking the substantial amount of time required to really understand the pros and cons of investing in the stock market in general then don't be surprised if you are surprised by how things turn out for you.

AndyFromTucson

And if you want to invest like Warren Buffett, buy shares of Berkshire-Hathaway. Class B stock is about $4,440 a share right now. It's a conglomerate holding company with assets that are so diverse, it's almost like a mutual fund with Buffett as the fund manager.

Or you could simply buy shares of an index-tracking exchange-traded fund (ETF) like SPY which tracks the S&P 500.

Deprong Mori

uh... if you are investing in a stock and it doubles in a few days you better be selling it ASAP. Unless you had inside information the odds of that doubling being sustainable are pretty low. If you invest $5000 in XYZ corp and it doubles on Friday, sell $5000 worth so when the stock tanks you didn't lose your initial investment. I know that was more a turn of phrase but doubling in a few days isn't a normal thing.

the rules should be - pay off high interest debt (student loans under 4-5% dont count), get an emergency fund and then assess your risk profile. im 24 so i have no problem taking on alot of risk because i have tons of time for it all to even out. if i were 50 i wouldn't be investing the same way.

Khamel

I think a very sensible, shorter, and smarter version of these points is via Scott Adams' Financial Plan. If you can follow it, it says whatever other people are sayig without any flab, and its so concise!

Nitin

@Nitin:
Okay, I recognize that Scott Adams' #8 is reasonable ("invest 70% in a stock index fund and 30% in a bond fund"), but isn't it kindof, well, boring to never touch your investments? It's like owning a potted plant instead of a dog. Sure, the plant is more reliable, won't pee on the rug, run away, or destroy stuff, but it's way less fun, no? And incidentally, flabulous use of the word "flab."

cameron_penn

@bnosach: Well crap, you're right. Shows how much I used it :) I mainly just opened a money market account and let it do its own thing. The interface for that site is kinda clunky, I also use SogoInvest.

holymogwai