Ask The Experts: Looking to Invest; Where Do I Start?

I'm 31 years old; I have a stable job, and have no debt as far as credit card or car payment goes. I have about $6,000 in saving account, I'm currently putting towards my 401k 20 percent of my income. In the next couple months I'll have some money to invest. Where should I start? I have no experience in investing in the stock market. -Jose

No debt, putting 20 percent toward your 401k and looking to save more. Jose - you da man!

Listen, before you start investing more into the stock market, I'd keep building your liquid savings until you have an amount of cash equal to 12 months living expenses. You should also make sure you have group long term disability insurance through your employer or get your own private policy. This type of policy will protect you and provide an income in the event you can't work.

Next, I'd meet with an estate planning attorney to have a will drawn up. At 31 you may not have a significant amount of assets but you probably have a lot of stuff. A will can be a simple, inexpensive way for you to ensure your property passes to your heirs or a charity according to your wishes.

Now, within your 401k you probably have stock mutual funds to invest in. Because you will not be touching this money for about 30 years you can invest aggressively with 70-80 percent of your money in the market. Your 401k plan provider should have representatives who can meet with you to choose an appropriate allocation and investments. They'd be a good starting point for learning about the market. Additionally, start subscribing to financial newsletters, newspapers, magazines and invest in some personal finance books too!

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Bill Losey, CFP®, CSA, America's Retirement Strategist®, is the resident retirement planning


expert on CNBC’s “On the Money”. He has been named one of
America’s Top Financial Planners and is the author of Retire in a Weekend! The Baby Boomer’s Guide to Making Work Optional. He also publishes Retirement Intelligence, a free weekly award-winning newsletter. Bill can be reached online at