NOTE:  This post is part of an ongoing education series.  This information is for educational purposes only.  This information does not constitute investment advice.  No rational person would make investment decisions based on a blog post.  Please consult with your financial advisor before taking any action.  For the last several weeks we have been working on answers to some questions asked by a reader named Jemand.  This will be the last part of that series.  If you have any questions about investments, please let me know.

I need to start saving for retirement (I’m in grad school) but I don’t really know how to even start or how to even go about *buying* any kind of stock, much less, kinds that make particular sense for me. Also, I have less than 10,000 I can invest right now, so it feels to me that paying a financial advisor would take out way to large a chunk of what I’d be making.

Most financial advisors get paid a small (or not so small) percentage on the amount you invest.  So, with a smaller account your fee will be smaller.  For more on investment advisors - read this post.  The problem you may have is that some advisors will not want to work with you if you "only" have $10,000.

So... What to do with the $10,000.  If you are going to do it by yourself you will need to think about several things.  How old are you?  What is the money for?  How much risk can you take?  How long will the money be invested?  Will you add more or will you start to take money out?  Do you have life insurance?  All of this things and more could change where you put the money.  This is one of the reasons that it is impossible to give investment advice to everyone at once.  The advice needs to be based on that person.

Keep in mind this is not actual investment advice for any person and you should check with your advisor before doing anything.  In our example the person investing has $10,000 and is a 25 year old female with no spouse or kids.  This person has a good job with a reliable income stream and does not need this money until they retire. 

One of the most important factors in your long term investment results is expenses.  To keep expenses low, I would suggest an index fundVanguard has the most index funds with the lowest expenses.  For starters I would suggest the Total Stock Market Index Fund.

Created in 1992, Vanguard Total Stock Market Index Fund is designed to provide investors with exposure to the entire U.S. equity market, including small-, mid-, and large-cap growth and value stocks. The fund’s key attributes are its low costs, broad diversification, and the potential for tax efficiency. Investors looking for a low-cost way to gain broad exposure to the U.S. stock market who are willing to accept the volatility that comes with stock market investing may wish to consider this fund as either a core equity holding or your only domestic stock fund.

When more money is saved consideration could be given to other types of investments.