"As a struggling poet, in my late 20, I teach as an adjunct plus I do some office work. My rent and overhead are low. I am single, come from a family of modest means, and am basically financially illiterate. I would rather read Wallace Stevens than Forbes. What do you recommend?" -- Good Intentions, Michigan
I'll keep it simple. Invest the same amount every month in a well-run mutual fund. Do it with autopay and limit your labor. Invest whatever you can afford to put aside without feeling like a martyr.$ 100 per month, $50, or even $25 will work.
Important: when you set up the account, elect to have the dividends and capital gains reinvested. You'll get the benefits of dollar-cost-averaging, regular saving, and the accumulation of dividends. All the reputable mutual fund outfits have 800 numbers staffed by people who can help you with the application process.
Here are some funds with excellent track records and experienced managers -- in descending order from most conservative to least risk-averse: Vanguard Wellington, Fidelity Balanced, T. Rowe Price Equity Income Fund, Royce Premier Fund, Franklin Mutual Global Discovery Fund.
Reading Wallace Stevens is a more fun and intellectually more rewarding than the memos that Wally himself had to read in the office. But you don't need to read Barron's or Forbes or Smart Money to be an investor. If you have the horizon of a true long-term investor -- using money you won't need for at least ten years --investing on the installment plan in a sure-and-steady fund is one of the best things you can do.
