hello! i've been looking into the best way to put my money to work for me. i'm 23, a few years out of college with no loans, credit card debt, or car payments. i don't make a boatload of money but i live within my means and recently have been interested in making sure that i'm financially preparing myself well for the future.

i freelance, so my income varies, but it averages out to about 25,000/yr. my rent's not high, especially considering where i live, and i either take public transportation or walk/bike, which keeps my expenses down.

i have my emergency fund, which would cover about 3 months' expenses, in a high yield savings account. i have a Roth IRA account that i contributed $6,000 over a couple of years when i was about 15-17, but then stopped contributing to in college. i recently opened another Roth IRA account (the first one is not easily accessible online) and have been making scheduled contributions to it (my financial priority right now is to find enough extra in my budget to contribute the maximum this year). and i have my checking account, which i use to pay my daily expenses.


in terms of planning for the future, i'm interested in finding out what i should do with the money in my IRA. right now it's all in cash, but should i look into putting some of it in index funds? i've been reading up, but don't completely understand how to pick which funds to buy. advice on how to figure this out?

Personally I would go with index funds or a target retirement, that way you can reduce the amount of work you'd need to do on your own and be confident that you're getting a good return. For those funds I'd go with Vanguard, Fidelity, etc. one of the big boys, you have a great start, keep it up.

At your age I'd probably suggest putting it all into VTSMX. That's the total stock market index fund from Vanguard and it's exactly what it sounds like. Target funds are great too but they can be a bit conservative and, IMO, a 23 year old doesn't need to have 8-10% in bonds. I'd also figure out how to get that other Roth so you can have access to it. There are many advantages to having your money all in one place and easy to get at.