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Originally Posted by Schneed10

And one last thing, when you invest in stock, be prepared to ride the roller coaster. You will see your balance go up and down, sometimes drastically, from year to year. In 2008 my account lost 45%. In 2009 it gained 35%. Over the long haul, these big swings tend to even out in your favor, and you end up earning more with stock than you would with bonds.

Stocks are generally a bad idea for any money which you will possibly need to use within 10 years. Once you get within that time horizon, it's time to add some bonds to the mix. That's why you choose very safe investments for your emergency nest egg, and aggressive ones for retirement funds.

You've got a long way towards retirement, so get the earning power of stocks on your side:

A 25 year old investing $3000 per year in stocks, at an average of 8.5% return, will have a balance of $965,000 upon retirement at age 65.

A 25 year old investing the same $3000 per year in bonds, at an average of 6.5% return, will have a balance of $565,000 upon retirement at age 65.

The extra 2% earning power is worth nearly double the $ over a 40-year period.

A 25 yr old forced to pay Social Security at $7,000 per year will be lucky if there is even any money left at age 65.