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When talking about investment, you should always keep in mind that “High risk means High return”.

ESPP and stock options are both tied to your company's stock. They are risky investments by nature. If you have extra money to save, it’s generally a better idea to put it in broadly diversified index funds or bonds.

Most FAs recommend 60/40 or 70/30 stock/bond allocation. But if you don’t have too much money (<$100K) to invest, I wouldn’t follow the above rule. Instead, you can put the money in several index funds.

In your particular case, my recommendation is as follows:

Large Cap – 30% (Buy SPY)
Mid Cap - 25% (Buy MDY)
Small Cap 15% (Buy IWM)
International 30% (Buy EFA)

The above symbols are ETFs tracking the performances of their corresponding indices. You can buy them like buying any other stocks. I think they are better for most people because in any particular year, the majority of mutual funds under-perform their respective indices.

If you want to buy real mutual funds, go to Fidelity.com, where you can find hundreds, if not thousands, of no-load mutual funds. Download a copy of the application form, fill it, send it to Fidelity with a check, you’ll have your 1st fund(s) up and running!