Finance Help...

[sheemone00]

So I just landed my first job out of college and I wanted some guidance on investment ideas.

I'm looking for some small investment ideas (i.e. CDs).

I'm pretty clueless when it comes to these kind of things so any input will be appreciated.

Thanks in advance.

 

[AmpedSilence]

401k and an online savings account (ING, FNBODirect, etc.), with automatic deductions...

Do it, you'll be thanking yourself later.

 

[Ns1]

if you're doing CD's you might as well just find the highest paying savings account...

 

[jaybert]

Originally posted by: AmpedSilence
401k and an online savings account (ING, FNBODirect, etc.), with automatic deductions...

Do it, you'll be thanking yourself later.

unless he gets matching on the 401k, i would suggest maxing out your ROTH IRA before moving onto your 401k.

and if you do get matching, contribute to your 401k up to your matching limit, max out your 401k, then return to max out your 401k.

 

[WildHorse]

Before you put your money down, first go study up on Warren Buffett, who is the world's greatest stock market investor.

Your local library will have some easy reading about him.

On the one hand you've got the whole securities industry with investment advisors, and business school academicians, telling you about risk diversification, challenging fancy math for portfolio management, stock buy/shorting strategies, options, trend timing, etc. The empirical fact is, big fund managers in that industry barely keep up with the S&P 500.

On the opposite end of the spectrum you've got this maverick guy who pretty much ignores all that, has consistently outperformed nearly everybody ever since the 1960s, has become one of the wealthiest guys on earth (started with $100, now personal fortune $52 billion, which he's giving away), and approaches investing in a totally different way than the above. Buffett has little interest in things like daily stock price movements.

Despite the phenomenally and consistently successful results of his different ways, the securities industry pretty much ignores him and keeps on truckin' with attempts at market timing, cost averaging, portfolio hedging using options, etc, etc.

Go to the Berkshire Hathaway web site, download and READ Warren Buffett's annual shareholder letters. Read several years back. Here

I read on digg that somebody just paid over $650,000 to have one lunch with Warren Buffett. Link

As you can see, I'm a fan.

 

[DaveSimmons]

Here's the usual advice that most financial advisers would agree with:

1. Pay into the company 401k up to at least the level that they match (say they match 50% up to 8% then do 8%)
2. Pay off CCs and stay out of debt. Pay down any loans at an interest rate above 5%
3. INGDirect or other high-interest savings account, build up to at least a couple of months of living expenses
4. Roth IRA, vanguard.com is one good place, pick a stock index mutual fund or 2.
5. still have money? increase the 401k % up to the maximum allowed
6. still have money 2? regular brokerage account for more stock index mutual funds

If you have student loans it might be awhile before you can do # 4 - 6.

Also, if you're planning to buy a house in a few years, CDs or high-interest savings are better short-term investments than stocks.

 

[MegaVovaN]

His first name is WARREN

 

[Yossarian]

you are in a fortunate position. starting saving and investing early are the most important factors contributing to success.

I recommend reading this forum--

bogleheads forum

and checking out books like Four Pillars of Investing and Bogleheads Guide to Investing. You'll have to determine what your investing goals are, i.e. retirement, house, etc. Once you do that you'll be able to determine what asset allocation works for you.

Personally I have switched everything over to Vanguard. Low cost, zero load mutual funds diversified across the whole market are the way to go for most investors.

 

[WildHorse]

Originally posted by: MegaVovaN
His first name is WARREN

Yes you're right I'm a disaster as a typist. Typo fixed above.

 

[TallBill]

Screw an IRA, I want to be retired at 45 baby!

 

[DaveSimmons]

Originally posted by: TallBill
Screw an IRA, I want to be retired at 45 baby!

I plan to retire early, but IRAs and 401ks you can't touch until 59 1/2 are still worth having: with them you can spend more of your other investments while they keep growing untouched.

Also, with a Roth IRA you can take out your original contributions early without penalties, you just need to leave the growth in the account.

 

[sheemone00]

Thanks for the initial replies, I'll start reading some of those suggested books and doing some research on on-line savings (I just have a wells fargo savings account at the moment), mutual funds, and 401K.

Unfortunately my work does not provide a 401K.

I would love to hear some more suggestions for this beginner!

 

[jadinolf]

Originally posted by: sheemone00
So I just landed my first job out of college and I wanted some guidance on investment ideas.

I'm looking for some small investment ideas (i.e. CDs).

I'm pretty clueless when it comes to these kind of things so any input will be appreciated.

Thanks in advance.

I would recommend jadinolf Enterprises.

They will quadruple your investment in 3 days.

Email $5,000 immediately.

 

[alrocky]

OutFox the Box
Ask for help here

Suggested Reading:

The Four Pillars of Investing by W. Bernstein
All About Asset Allocation by R. Ferri
The Only Guide to a Winning Investment Strategy You'll Ever Need by L. Swedroe
Why Smart People Make Big Money Mistakes & How to Correct Them by G. Belsky & T. Gilovich

You may invest up to $15,500 in a 401(k) this year and $4,000 in an IRA. Endeavor to invest as much as you can as soon as you can. Doing so increases the likelyhood that you'll retire richer and you'll actually invest less than if you start later (for the same end amount.)