Firstly, I'd recommend this book:
<a href="http://www.bogleheads.org/wiki/Bogleheads'_Guide_To_Investing" rel="nofollow">http://www.bogleheads.org/wiki/Bogleheads'_Guide_To_Investin...</a><p>It's easy to grasp and straightforward. Some basic ideas from the book:<p>1) What is your timeline? You seem to have multiple goals/timelines (car, retirement, home) and you need to define each clearly so that you can save for them in the proper manner. Needing money in 5-10 years for a house going to present a different goal than needing it in 30+ years for retirement. Generally, the shorter the time-frame, the less-risky the investment. If you need it in <=5 years, I would stay away from equity, but that is me. Once you know your goals and timeline you can figure out what kind of expected return you want to target.<p>2) Risk tolerance: You touched on this, but again, you need to clearly define what you mean by "I don't want to risk too much". How affected would you be if your investments were down 30% in one year? Would you hold or panic and sell to avoid further losses? Answering this question is a lot easier to do when you haven't lived through a huge market drop. (People tend to overestimate their tolerance for risk)<p>3) What is your financial situation? I assume no debt if you're saving 50% of your pay each month, but if you do have any debt, you're probably better paying that off before choosing to invest. Talking a financial planner (who isn't trying to sell you product/services from his/her institution) is a good way to figure out a plan in this respect. I would also ensure you have a decent emergency fund - depending on your situation, 6 months is usually enough.<p>4) Other assets: If you have a decent 401k match (as you indicated) this gives you a little more flexibility since you already are saving decently for retirement.<p>5) Taxes: This matters a lot and tax rates for different investments can vary quite a bit. I'm not familiar with US tax code so again, this is something you should talk to a financial planner or accountant to understand.<p>Having said all of that, I'm personally pursuing a passive, asset-allocation plan. I'm mostly invested in Vanguard Index ETFs with a percentage allocation of bonds, US equity, Canadian Equity (I live in Canada) and International Equity that I feel is comfortable for me. I chose this mainly because of the low-cost/low-MER (Vanguard ETFs have even lower MER in the US) and went passive because I don't like to have constantly make adjustments to my portfolio.<p>Most of my assets are invested for long-term capital growth, but I have separate accounts for an emergency fund and saving for a real estate purchase where preservation of principal is my concern. (high interest savings account)