FROM FOSCO


Depends on a few things - expected retirement age and your risk aversion. I'll assume you'll be 22 when you finish up and expect to work until your 60 (if you make $50K coming out of school, you probably won't want to work 'til 65). So you've got about 40 years of work to save for retirement. Use this to determine your expected net earnings and then pull out your finance book to reverse estimate the growth over time.

Regarding where to invest - depends on the amount of time you have available. Buying property will be the largest investment of your life and you'll need some cash and earnings potential to pull it off. Buying/selling (flipping) houses can be a strategy but has time and risk associated.

We had a guy from Charles Schwab come talk to our company @ a conference a month ago - he just kept preaching diversification. Max out whatever the company matches to your 401k and put away the max in a Roth IRA (pre-tax baby). If your comfortable investing, you can pick your own stocks but there are tons of great mutual funds (no load, no spiff for the firm) that you can set your diversification (large cap, mid cap, growth, international, etc.). Here's a pretty standard way to keep your investments health for the long term:

Conservative
You seek current income and stability, and are less concerned about growth.
Fixed-income investments: 50%. Cash: 30%. Stocks: 20%.


Moderately Conservative
You seek current income and stability with modest potential for increased investment value.
Fixed-income investments: 50%. Cash: 10%. Stocks: 40%.


Moderate
You’re a long-term investor seeking steady growth potential without the need for current income.
Stocks: 60%. Bond funds: 35%. Cash: 5%.


Moderately Aggressive
You’re a long-term investor seeking good growth potential.
Stocks: 80%. Bond funds: 15%. Cash: 5%.
This portfolio could be volatile.

Aggressive
You’re a long-term investor seeking high growth potential.
Stocks: 95%. Cash: 5%.
This portfolio may have substantial year-to-year value fluctuation.

Regarding 'how much to save' - as much as you can. A dollar today is worth more than a dollar tomorrow. Lock in your student loans if you just graduated (by 7/1) as interest rates are risking. And pay off any credit card debt before you begin investing. Cheers-