Financial Advice?

[GasX]

Originally posted by: rahvin
Don't recommend investments with risk to someone who is risk adverse. The person themselves must accept the risk and potential loss of principle if the investment turns bad, in the case of the poster and his subsequent responses indicate your best bet is to attempt to educate the poster as to the scale of the risks but not to talk down to them for being risk adverse. Not everyone can handle the idea of having the potential to lose hard earned money. Those of you promoting investments should consider that.

Discussing risk is always warranted. My wife very much wants her money her grow as fast as possible but when you start to talk to her about what risk really means, she gets REAL nervous. Conversely, saying you are "risk averse" doesn't mean you should use a bank for your life savings. You might feel that "risky" means venture capital and options plays and that blue chip stocks are safe.

Smart investing is all about finding the investment that will bring the highest returnes within your stated risk profile

 

[rahvin]

Originally posted by: Mwilding

Originally posted by: rahvin
Don't recommend investments with risk to someone who is risk adverse. The person themselves must accept the risk and potential loss of principle if the investment turns bad, in the case of the poster and his subsequent responses indicate your best bet is to attempt to educate the poster as to the scale of the risks but not to talk down to them for being risk adverse. Not everyone can handle the idea of having the potential to lose hard earned money. Those of you promoting investments should consider that.

Discussing risk is always warranted. My wife very much wants her money her grow as fast as possible but when you start to talk to her about what risk really means, she gets REAL nervous. Conversely, saying you are "risk averse" doesn't mean you should use a bank for your life savings. You might feel that "risky" means venture capital and options plays and that blue chip stocks are safe.

Smart investing is all about finding the investment that will bring the highest returnes within your stated risk profile

In the context of what the original poster has posted and his further comments made I think it's a safe assumption that the party in question is 100% completely risk adverse and anything that isn't FDIC insured is out of the question.

 

[DaiShan]

Originally posted by: Mwilding
Beyond clearing your debt, it is a good idea to have a large amount of liquid money.

1. You can use it as a down payment on a home.
2. You can use it in an emergency.
3. You can live on it if you lose your job.

Most advisors recommend 3-6 months of living expenses.

OK, so you are debt free and you have your cash buffer. Now what?

Best bet for your average joe/jane is to invest in a mutual fund via a direct deposit program (e.g. $500/month from your checking account) Regular investing will soon add up.

Liquid does not mean dollar bills, it means assets that can be converted to cash in a short period of time (90 days or less) So something like a corporate bond that yields a decent return from a strong company, that you can trade might be a good bet. Investing while you're young is a very good idea, especially conservatively. I put away $300 a month and $500 when I can swing it, plus the interest on bonds if you have enough money can serve as a sustainable form of income.

/edit that was directed to the OP in case he didn't know, your post just brought it to mind.

/edit #2 also keep in mind that 75% of fund managers did NOT beat the market last year, meaning that the market as a whole grew faster than the funds most managers actively invested. That isn't to say there aren't some real winners out there, my father has a good bit of money in a Janus account (I think) that is now closed to the public that has had some phenomenal rates of return over the past 5 years (well in excess of the market as a whole)

 

[GasX]

Originally posted by: DaiShan
/edit #2 also keep in mind that 75% of fund managers did NOT beat the market last year, meaning that the market as a whole grew faster than the funds most managers actively invested. That isn't to say there aren't some real winners out there, my father has a good bit of money in a Janus account (I think) that is now closed to the public that has had some phenomenal rates of return over the past 5 years (well in excess of the market as a whole)

that's why ETF's and index funds are the way to go

 

[Noirish]

Originally posted by: rufruf44
4 shares of berkshire class B stock.

Google!!!

 

[DaveSimmons]

Originally posted by: Noirish

Originally posted by: rufruf44
4 shares of berkshire class B stock.

Google!!!

The Google IPO is a sucker bet, people like you will be bidding the price up way above any sane value just because you like Google.

And putting all your monry into Berkshire shares is a huge risk, since Buffett won't be around and/or picking winners forever. That kind of gamble makes more sense after you already have a good amount in cash/CDs and index funds.

 

[wyvrn]

Originally posted by: rahvin

Originally posted by: Mwilding

Originally posted by: rahvin
Don't recommend investments with risk to someone who is risk adverse. The person themselves must accept the risk and potential loss of principle if the investment turns bad, in the case of the poster and his subsequent responses indicate your best bet is to attempt to educate the poster as to the scale of the risks but not to talk down to them for being risk adverse. Not everyone can handle the idea of having the potential to lose hard earned money. Those of you promoting investments should consider that.

Discussing risk is always warranted. My wife very much wants her money her grow as fast as possible but when you start to talk to her about what risk really means, she gets REAL nervous. Conversely, saying you are "risk averse" doesn't mean you should use a bank for your life savings. You might feel that "risky" means venture capital and options plays and that blue chip stocks are safe.

Smart investing is all about finding the investment that will bring the highest returnes within your stated risk profile

In the context of what the original poster has posted and his further comments made I think it's a safe assumption that the party in question is 100% completely risk adverse and anything that isn't FDIC insured is out of the question.

The problem with bank accounts is low interest. They do not keep up with inflation, therefore the investment erodes over time. That in itself is guaranteed risk. You must take some small amount of "potential" risk in order to prevent erosion over time.

 

[randomlinh]

Presidential Online Bank's webpage looks ... like it could use some updating but i guess that's how they can manage 2.75%.... who else has been with them?

 

[Chunkee]

have her start a brothel...and you can be the pimp.

highest return....

punanni sales are at their highest in these stressful times

jC

 

[Cable God]

Originally posted by: Asharus
My company's 401k is handled externally by TRowePrice, and the stock purchase plan is handled by Fidelity.

And my company's software handles your 401k's daily trading and recon