If you are in your 20s and you are thinking of saving and investing then you are way ahead in the game of investment world. One year of loss in the investment world can cost you thousands of dollars in 20 to 30 years because of the power of compounding.

Read the blog Steps to become a millionaire and you would get a general picture of where to invest to reach the goal of building wealth.

In 20s one have enough time to face the ups and downs of the stock market and it is recommended that around 95% of the asset should be invested in the stock. At this age putting 95% of the asset in stock market and 5% in bond and fixed income securities sounds like a plan.

Since one doesn't have lots of money in one's 20s unless she has worked at pre-ipo Google or inherited lots of money ( I am not counting on lottery because the odds are very small), it is recommended that the investment is made through mutual fund. Also considering the global scope of economy and world stock outperforming US stock market it is also recommended that around 30-40% of the stock portfolio goes to the international fund.

Here is a simple breakdown for a person in 20s:

It is very important to invest in a low cost fund that doesn't charge any load and 12b-1 fee. Funds mentioned above are really quality funds with low expense ratio and no load.

Sign up for automatic investment plan. Funds these days allow to invest as little as $50 if you sign up for the automatic monthly investment plans. that way you don't have to worry about how much to invest where and you will save automatically. This way you will get good dollar cost averaging on your investment.

Stay on the course and keep investing as little as you can and soon you would be amazed at how much wealth you have built with your strategy.