How do I get started investing? is a question much like, What should I do once I graduate high school? In both cases, the answer very much depends on where you are in life; and where you are going. Just as a future doctor might take biology and chemistry at an Ivy League school, someone bent on a life as a French chef might want to work in a kitchen in Dijon. Let's look at a few paths:

The young careerist

You are in your 20s, setting out into a career, and your schooling is over. You work for a medium- or large-sized company.

1. The first thing you should do is to contribute as much as you can afford to your 401(k). If your company offers matching, contribute at least the maximum up to which your company will match. Be brutal; cut spending if you can. Invest in a few different places, if your company allows, such as an index fund and a mutual fund with a low (or no) cost or load.
2. Once you are comfortable with your level of contribution and have saved that all-important emergency fund, start investing slowly by putting a fixed amount each month into a few stocks that are well-regarded by financial minds you trust (the Motley Fool is a good place to go to find your analytical kindred spirit).

The artist, freelancer or entrepreneur

You are in your 20s or 30s, and you don't work a “normal” job–no cost-of-living raises, no automatic retirement savings plans.

1. You, more than anyone else, need an emergency fund saved before you get going with investments! You'll need that cushion in case your income fluctuates suddenly. (That can happen, as I've learned myself.)
2. Starting an IRA is a good first step, either through a site like Sharebuilder that will allow gradual investments or through your bank or a brokerage house. Once you have it, you'll want to look into index funds, bond funds or trusted mutual funds; and if you can, max the annual contribution you can make and use as a tax deduction.

The mid-life financial born again

You've made some mistakes in your financial life, or purposefully put off saving and investing. Now you're in the middle of your life and you don't know where to start. If you've already got your savings building, you're making the foundation for a good financial future.

1. Start investing immediately, either through a company 401(k) or a Roth IRA–or both, if it's possible. Set goals for yourself that are achievable without risky investments; be realistic.
2. Work hard to figure out ways to set aside more money than you think you can to your investments. Any small amount that you can give up in spending now will pay off big in the end.

The bottom line

Here's the bottom line on investing, though: make sure you invest. I ran the 401(k) program at a very small company years ago. I was the only one who ever went to the rather simple step of electing an investment (which you can't typically do until after your first contribution hits the account–as frequently as every pay check, or as seldom as quarterly).

Even if you put everything in an index fund or conservative bond fund, at least it's a better average return than the money market fund that is the default for most plans. And most importantly, money you spend today can't be invested in anything, so any money saved for tomorrow benefits the future you.