Megan McArdle's Three Rules for Investing.........

Sometimes the simplest things are also the hardest things.  McArdle's recipe works.  In fact, provided you don't wait until you are 55 to start, it is the closest thing to a guarantee in life that one can get.  The only thing that I would add, is that one could substitute  investment real estate for "index mutual funds" and get the same result.  It is #1 and #3 that are most important.  Her rules:

1) Save at least 15% of your income

2) Put the money in index mutual funds

3) Leave it there until you retire.

McArdle's full post is here.  As a card-carrying member of the "most spoiled" generation, I love these two parargraphs:

You guys have enough money to save, which I can scientifically prove because your grandparents almost certainly lived on a small fraction of what you now do.  And don't tell me things were cheaper, back in the good old days: in almost all cases their houses were smaller, less well heated, and entirely un-air-conditioned; their entertainment budgets were much leaner; their groceries heavier on the cheap and utilitarian and lighter on the tasty and expensive.  They literally had about a quarter as many clothes as the ones bursting out of your closet.  Their health care was cheaper because it sucked and they died quicker.

You have enough money to save and still live a rich, satisfying life.  What you maybe don't have is enough money to save while enjoying what you have come to think of as the minimal standard of living for your peer group.