I would do the following:
1) if you are working and your employer offers a 401k plan. Participate.
2) choose funds that have low fees. Normally the funds with lowest fees are your index funds.
3) if your employer doesn’t have a 401k, open a Roth IRA at Vanguard, Fidelity, or Schwab.
4) try to max it out. You can contribute 6k in 2019.
5) buy ITOT or VTI or SCHB. These are US Total Market index funds. They all have very low fees.
6) study about investing at least 30 min a week. Start with topics such as early investing, asset allocation, and market vs stock risk. Go from there
7) Every dollar that you invest today is 21 dollars in 45 years if your money makes 7%. Each dollar invested today is 160 dollars in 75 years.
8) inflation erodes your purchasing power over time. Historically inflation has been around 3.5%. Today it’s about 2.7%. If you did nothing and only kept your money in a savings account you would lose 3 cents in purchasing power every year for every dollar that you save. If you save 1 dollar on Jan 1, 2019, after 1 year of saving that dollar, you’ll only have 97 cents in terms of purchasing power. Over time this is a very powerful drain on your money. Investing counter acts the effect of inflation.
9) you will hear from the inter webs that on average the market will give you a 7% return, where does this number come from:
4-6% in earnings growth
-2 to 2% in speculation growth (valuations)
We do some math:
2 + 6 + 2 – 3 = 7%
1.8 + 4 -2 -3 = .8%
Just remember that the game is long and your investment life will be long. Close to 80 years. Don’t worry about the ups and downs in the market if you need the money 40 years from now. Let me know if you have any questions.
Disclaimer: Consult your financial professional before making any investment decision.