beginner's guide to personal finance?

[bobeedee]

Rule #1: Don't spend what you don't have
Rule #2: Pay back credit cards in full

That's the gist.

Never touch the principal

 

[Doppel]

Ask alkemsyt for advice.

 

[MrChad]

The Only Investment Guide You'll Ever Need is a good starting guide.

 

[IronWing]

If your employer (if you have one) has some type of retirement plan (pension, 401k, profit sharing, or other) take time to sit down and read all the materials concerning available benefits and then ask questions until you understand the plan inside out. Does the plan have vesting? How does it work. Is there a minimum age requirement to retire within the plan? Can you leave this employer and draw a deferred pension when you ultimately retire? Is there an early retirement provision? What is the penalty. If there is a pension, is there a provision for your spouse when you die? If a 401k is offered, read up on all the requirements for tapping a 401k at retirement. Learn everything you can about your options. Then set up a spreadsheet with retirement age vs estimated benefits (for 401k plans, this is hard).

If you qualify for Social Security, get your SS statement and download and try to learn the SSA's AnyPIA program to estimate benefits under your specific circumstances. Add estimated SS benefits to your age vs benefits spreadsheet.

Depending on the type of retirement plan your employer offers you may spot some sweet spots for retirement age. With this in hand you can make decisions about when to retire and how you might tweak your savings rate to better position yourself for retirement or plan for other financial goals.

Edit: Almost forgot, and this is really important: if your employer offers post-retirement health insurance benefits, find out how those benefits work. Try to figure out if the benefits offered are a good deal and if you will need to supplement these benefits to keep yourself covered. Then try to plan out how to pay for coverage. Health care costs are the gun to your head waiting to go off.

 

[Imp]

Money in < money out = debt

Screw savings: lots of people can't seem to figure out how NOT to rack up debt nowadays.

 

[Dr. Detroit]

I think Suze Orman does a good job for beginners - they usually have these at your public library.

I picked one up, it was not advanced enough for me so I think it would be great for beginners and really walks you through each term in layman's terms.

Check the library & Amazon used.

 

[IronWing]

Money in < money out = debt

Screw savings: lots of people can't seem to figure out how NOT to rack up debt nowadays.

Fortunately, there is a tutorial.

 

[Jeff7]

I spent many years reading up on stocks and other investment options. I understand options, commodities, futures, bonds, etc.

And my conclusion is that if you want to build long-term wealth with investments, the boring, steady approach is best. Keep expenses low by investing in index funds, practice asset allocation with rebalancing, and make periodic investments. The "Boglehead" approach.

And if you are determined to create more excitement, partition off some part of your investment capital and go crazy with individual stocks and more esoteric investments, but keep it limited to that part of your overall capital.

My opinion only. I know others do it differently. But this system has been exceptionally solid for me.

I'm also quite intrigued by this approach as of late. I'm prepping to start an IRA and go with index funds as investments, with a some of the less-volatile investment options in there as well.
(Still new to investing, but...well, I've been reading a fair bit of Boglehead-oriented material lately.)

My thoughts on actively managed funds: If the people in charge of them were truly good at picking stocks, they wouldn't have jobs. They would be deciding what color racing stripes to put on their second private jet. And they're so confident in their abilities that they guarantee absolutely nothing whatsoever, not even that they'll be able to match the performance of the market average.
Other thought: Buying the entire market is the ultimate diversification. Yes, it eliminates the chance of you picking a good stock that goes crazy and turns you into an overnight millionaire. People pick winning lottery tickets too, but it's not a good investment strategy. So it also eliminates the chance of you picking some stocks that go bad when the companies tank, or when the CEO is found doing cocaine off the back of a mule in his front yard. And if your index fund utterly tanks, the entire economy will have to have gone to hell at the same time, so you'll have other things to worry about.

Or, if you want a nearly-guaranteed way of making money in the stock market, become a broker. :awe:



As for more immediate finance...

Money in < money out = debt

Screw savings: lots of people can't seem to figure out how NOT to rack up debt nowadays.

Though I will say that I'm probably not at all "up" on the lingo myself. :\

My inlaws did this and to this day they think it was the right thing to do. My father-in-law had $89000 in a 401K, it crashed and went down to something like $32000, and the moron withdrew everything for $14000 after taxes. They keep repeating "If I left it in there, there wouldn't have been anything left!" I tried to explain to them that their funds normalized a month after the crash and would have been back up to the $50K range. I just don't think they want to admit they made a huge mistake.

Ugh, makes me sick.

Concurred. Don't try to time the market. Many people try it, but the majority aren't very good at it. The few that are truly good at it, they're usually in the news because it's so rare. And then some of them get in the news again years later when it turns out that they really aren't very good at it.

Someone in my family as well....he did the same thing, and he said he came out ahead. I'd still like to find out the dates that he got out and then quick jumped back in, to see if there really was a net gain. Too often, like you said, by the time someone decides "Oh god the market's going down!" it's too late, and then as it travels up, they again wait too long to get back in.

 

[brianmanahan]

ned, start with "The Bogleheads' Guide to Investing":

http://www.amazon.com/Bogleheads-Gui.../dp/0470067365

still the best investment book i have read, it is what got me started

so much good stuff in there

and i SO wish i would have read it 10 years earlier

 

[nanette1985]

As someone who had a shitload of money at age 50, I'll disagree - I'd have been way better off by tucking money away in that mattress.

 

[Svnla]

There are some good suggestions in this thread.

OP, go to Fat Wallet Finance and check the stickied thread. Some of those folks over there are very good with money.

I used sites such as Google Finance, Yahoo Finance, MSN Money, CNN Money.

Just take it slow. Remember that the old saying of the old turtle will win over the hare.