The first step to successful investing is saving, and Malkiel recommends that everyone, no matter their age, should begin saving as soon as possible. Malkiel recommends keeping a cash reserve, equivalent to three months of living expenses, in case of financial emergencies, and he insists that insurance is a necessity, especially for those with families. However, he does not recommend insurance investment products, as it is better to save and invest separate from insurance. Malkiel recommends placing cash reserves in Bank CDs, or certificates of deposit; treasury bills, or T-bills; and money market accounts, preferring CDs and T-bills for their assured returns, but recommending specific, tax-exempt money market funds for wealthier investors. In any situation possible, Malkiel recommends choosing tax-deferred options or untaxed investment opportunities, noting IRAs, or individual retirement accounts that defer taxes until withdrawal, and Roth IRAs, which demand taxes upfront but are not taxed at withdrawal. Malkiel also recommends investing in 401(k), 403(b), SEP IRAs (for self-employed investors), and 529 plans (covering higher education expenses), as these all offer various reductions and exemptions from taxation. The key element is for each investor to weigh their comfortability with risk, their current income, and their tax obligations to find a balanced