The first responder gave you some sound advice, especially with respect to the Roth IRA account. I am not so enthusiastic concerning index funds however. They do have low expense ratios. That is for certain, but many have not performed very well at all during these last 10 years. That is probably more an indication of the health of the US economy rather than any particular fault of the funds themselves although I believe some do suffer from certain failings, namely cap weighting.

On line brokerage is by far the least expensive for investors and traders. E*Trade is not in the most healthy financial condition currently. The company made a lot of stupid bets that darn near bankrupted them. They do have also some extra fees association with customer accounts. I use TD Ameritrade and Fidelity. They each have their pluses and minuses. Fidelity has by far better research. But TD Ameritrade is much better at handling OTC transactions. Fidelity is also more expensive for smaller capitalized investors. Scottrade is the least expensive of the main line internet brokers.

I do believe that one should start investing young but one also needs to be careful. Many young investors-speculators tend to shoot for the moon. Some hit it but most miss by a wide margin. I personally have missed several moon shots by a wide margin through the years, but I am still around to tell about it. Many are not.

Since you are already invested in mutual funds through work, you might want to try your hand at some individual companies. That does require more work on your part, but you might consider it part of your education. There are plenty of books available on investing. I believe that it would be a good idea to read a few first. Might start with "Investing for Dummies." It is a good introductory book on the subject.

If 20 people answer this, you will probably get 25 different answers.

Assuming you’re in the US, I would start out with something simple and reasonably secure. I would pick an index fund or two to invest in, and start out with a ROTH IRA. Do some searches (Yahoo finance is a decent place to start) to educate yourself about index funds. Look for something with a low expense ratio, and pick one or two. If you go with 2, they should track different market sectors, to get some added diversity. Then set up an automatic payment plan to put some money from each paycheck into them. If you want companies to look at, consider funds offered by TIAA-CREF, Vanguard, and Fidelity to start with. There are certainly others, but I know that these offer funds with low expense ratios.

Contact these companies, and they will be glad to advise you about how to set up a Roth IRA with them.