How to invest...

[meccaboy858]

Well I was just wondering (with my tax return coming and all...) if I should invest it in something? I'm totally clueless when it comes to mutual funds and IRA's and stuff like that. I mean I would just love to blow it on a PS2 and some games and have it done with but I really want to think about being smart with my money for once. Anyway, so any of you ppl who invest in things like this, any suggestions? And how would I go about getting stuff like that? You don't have to explain just link me Thanks guys...

Migs...

 

[fataIerror]

Send it to me and I'll invest it for you.

PM me and I'll give you my address.

 

[tcsenter]

<< Anyway, so any of you ppl who invest in things like this, any suggestions? >>

Ooo! I know!

Put ALL the money you have for investments into the retirement fund of one company, and after it goes bankrupt, say something incredibly stupid like "I would have never put all my money into one company had I known it was going to go bankrupt."

DUH! Would anyone invest a flat nickel on any company they thought would go bankrupt?

Moreover, inflate the actual amount you lost by estimating the highest 'worth' your investment ever reached, not what you actually paid for it.

Ok, sarcasm off.

 

[meccaboy858]

Wow, didn't expect that kind of response from you guys. Appreciate the helpful responses... Sarcasm off

 

[Maetryx]

Go to Ameritrade or Datek or similar, and make a new IRA account. The initial deposit has to be at least $500, if I recall correctly.

You have an important choice to make when you start the IRA. Roth or Traditional.

Traditional means that you can deduct from your income the first $2000 you place in the account (I think). So if you made $28k in 2001, but you deposited $2000 (or more) into a traditional IRA, you could effectively report that you made $26k and pay less taxes RIGHT NOW. When you are 62 and take money out of that account, you pay taxes on it THEN.

Roth IRA (my preference) work the other way around. You just put money in them (probably subject to some limit or other, can't remember) and pay taxes on all your income, including the part you stuck in the IRA RIGHT NOW. But when you take that money out of the account at age 62, it is tax free THEN.

Once the account is funded with your money, you're free to buy mutual funds, stocks, bonds, precious metals, and whatever else is traded by the broker you selected for your account. The fundamental idea for investing is to "buy low, sell high". You can take more risks when you're younger, and should take fewer as you approach retirement.

If you want specific stock advice, try The Motley Fool which seems to be advocates of the get rich slowly philosophy. If you want my advice, buy gold mining stocks RIGHT freaking now because gold prices must rise due to the incredible shortage of physical gold in the market. It may not happen right this second, but it's inevitable.

edit: OTOH, it looks like maybe you were asking whether or not you should make an Individual Retirement Account or simply a brokerage account (i.e. cash account). It would be silly to start investing in a cash account, by which I mean a simple brokerage account in which you try to make a profit, without first setting up an IRA. Get an IRA and a 401k (company retirement account) going as soon as you can afford to. In a 401k, you put in a percent of your paycheck, and the company you work for matches your contribution. Your contribution is doubled from the start(!)

After you have your retirement accounts initiated, and after you've paid off all your credit cards, you can then see if you have enough disposable income for a cash account.

 

[Mill]

ENRON

 

[Presence]

If I were you and if you are serious about investing I would invest in a book called mutual funds for dummies. Look into getting mutual funds and if you have a long time horizon to where you wont touch the money then you may wana look into opening up an IRA whether normal or roth probably depends on your financial situation when you plan on taking it out.

 

[tm37]

clarkhoward.com

clarkhoward.com

THis guy seems pretty smart.

 

[tm37]

Clark Howard.com



<< ? Your No. 1 investment priority should be funding your own retirement.
? Put money aside regularly, in a variety of stocks and mutual funds.
? Consider several investment vehicles when putting aside money for retirement: the 401(k) plan, the Roth IRA, the Individual Retirement Account (IRA) and the Simplified Employee Pension (SEP).
? When you're investing for retirement, the growth potential of stocks is a better bet than conservative investments such as certificates of deposit, which barely keep up with inflation.
? To minimize the risks of investing in stocks, consider stock mutual funds. Mutual funds limit your risk by giving you a small part of a big basket of companies.
? Saving for a child's college education is a lesser priority than saving for your retirement.
? One low-tech investment strategy is to invest in an assortment of index funds. Some index funds aim to match the performance of the Standard and Poors 500 or other market indexes.
? Don't expect huge gains each year and don't worry about huge losses in the short-term. Keep your eye on the target, which is long-term, 10 years or longer.
? If you see your investments take a tumble and you can't sleep at night because of it, switch to a more conservative investment strategy, such as a balanced fund, a lower-risk combinations of stocks and bonds.
? A 401K is offered to many employees and an employer often offers a full or partial matched contribution. For example, your company may contribute .25 cents for every dollar you contribute. It's not a good idea, however, to put too much money into your company stock plan. That puts too many eggs in your basket. Contribute no more than 20% into these types of stock 401K plans.
?The Roth IRA offers permanent relief from the tax man - forever! You are entitled to deposit up to $2,000 each year into a Roth and withdrawals at qualifying retirement age are tax-free. The earlier you start saving, the better. Set aside $2,000 each ($40 each week) and every year from age 45 and even with conservative gains, the account could hold $140,000 at retirement. Start at age 35 and the earnings could reach $400,000 and just over $1.1 million with $2,000 annual contributions starting at age 25. >>

 

[GasX]

Simple but effective advice:

Take $2000 and open an IRA: Traditional if you are >25 Roth if you are younger.

Put the money into a no-load index fund (try Vanguard). Forget about the account untill next year.

Take any other money you have left to invest and open a brokerage account.

Put the money into a no-load index fund (try Vanguard). Add money to the account every month. EVERY month - even if it is only a dollar.

Now start reading about investing, etc... As you get more sophisticated, you may want to change your investment strategy. In the meantime, the above one will work well for you.

 

[glenn1]

<< Well I was just wondering (with my tax return coming and all...) if I should invest it in something? I'm totally clueless when it comes to mutual funds and IRA's and stuff like that. >>



Yes, you should.



<< Anyway, so any of you ppl who invest in things like this, any suggestions? >>



Glenn1's guide to investing for those who are clueless about investing (and don't have the time or inclination to learn)

Step #0: Before you do ANY investing, pay off (or minimize as much as possible) your unsecured debt, i.e. credit cards, etc. It makes no sense to be investing and getting a return of 8% on your stocks, when you could have used that same money to pay off a credit card changing an 18% interest rate.

Step #1: Open an IRA account, preferrably a Roth IRA (if you're younger than say, 40, it's pretty much a slam dunk to get a Roth rather than a Traditional IRA). Contribute the maximum amount you can to it, your broker can help you determine what this amount is.

Step #2: Use that entire balance to buy one of the funds off this list with the word "Index" in the fund name.

Step #3: End sequence, take no further actions until next year, and repeat Step #2. You may change the fund you buy from time to time, but should remain buying index funds.

Step #4: If after step #1, you have any money left over, open a non-IRA account, and repeat step #2 with that money.

Step #5: If you have a subscription to the Wall Street Journal, or such, discontinue checking your fund prices more than, say, once a month maximum. Leave your index fund alone, and don't mess with it, obsess about it, or switch between funds. Buy it and forget about it.

Step #6: Retire in 40 years (give or take) with much more money than you have now.

 

[Miramonti]

I heard dot.com's are the place to be.

 

[BooneRebel]

<< I heard dot.com's are the place to be. >>



You must have waited about 18 months before hitting the 'reply' button there.

 

[Miramonti]

You must have waited about 18 months before hitting the 'reply' button there.


lol

 

[wyvrn]

1-- Pay off credit cards or other outstanding debts with interest rates over 10%. Or, move those balances to CC's that have 0% interest offers, if you have sufficient credit. The 0% interest offer will typically be a short period from 3-12 months, at which time you can dogpile payments to pay off balances quickly and interest free

2-- Reconsider paying off balances with 10% or less interest. Reason? Well if you research your investments well, it is reasonable to expect an average 11% gain over the long term on your money. So, at any rate under 11% on your accounts payable, you are actually making 1% profit by investing the extra dollars you would have paid off those accounts with into a higher yielding investment. If course this is a simplified example, and you really want to aim higher than a 1% return on your money, but the example was just to show you how to balance the interest rates on your investments vs. debts.

3-- Consider investing in Life Insurance products. Many of them, especially the variable and variable universal offer tax benefits similar to the Roth IRA, but have contribution limits related more towards your income. For instance, the more you make, the more you can invest and keep your tax priveledges, where IRA's (though very solid investments), have harder limits for contributions (you can put less in). And when you are young, you can lock in very low insurance costs which in most investments cannot change as you get older. This means you have protected yourself if you die to early (can leave sum of money to your loved ones to pay debts and live off of), while the separate cash accounts are growing tax free to protect you if you die too old (and don't have a job for income, thus the investment is what you live on).

Read the book "Kiplinger's Practical Guide to Investing", by Ted Miller (editor of Kiplinger's personal finance mag). This book is put in layments terms and goes quickly over just about every type of investments there are. This should be, IMO, one of your first reads regarding finances for anybody.

Also, I recommend reading "Rich Dad, Poor Dad" by Robert Kyosaki. This book will teach you how to invest in yourself, which is your most important investment. Yes mutual funds, insurance, index funds, and 401K's are good ways to grow your money. But you also need to make sure you are growing yourself at a rate that significantly increases your chances for success.

Best advice of all: Don't avoid learning about money. Investments power are in time and diligence. If you waste your younger years not doing anything, your chances for success go down exponentially.

Good luck

 

[SinNisTeR]

<<

<< I heard dot.com's are the place to be. >>



You must have waited about 18 months before hitting the 'reply' button there. >>





BWAHAHAHAHAHAH

 

[kendogg]

this was a very interesting read.. ::must pay off cc debt::

 

[glen]

diversify
this is easily done buy buying an indexed stock fund, like an S&P 500 indexed fund.

 

[Maetryx]

This is a really cool thread, lots of good advice (even from other people besides me ). I saw some book recommendations, so I'd like to make my own. Only mine is an author recommendation:Andrew Tobias. His investment books are given outrageous titles to make you think they are "get rich quick" guides. But, in fact, they are filled with solid personal finance advice and a sharp wit.

Also, the Wall Street Journal Guide to Understanding Money and Investing is nearly a comic book, yet just freaking loaded with knowledge.

 

[RossMAN]

<< Simple but effective advice:

Take $2000 and open an IRA: Traditional if you are >25 Roth if you are younger. >>



Why do you recommend a Traditional IRA if you are > 25 (which I am, 27)?

 

[glenn1]

Another good read....

 

[GasX]

I take that back. I was about 25 when a Roth no longer made sense. Depending (mostly) on your income a Roth may still be advantageous. You are better off figuring it out for yourself.


Click Here!

 

[RossMAN]

Thanks for the website link it says a Traditional IRA may be worth $5,133 more than a Roth IRA.

Since I'm married I wonder if I should include our combined income or my income only?

 

[wyvrn]

Oh yeah, one other thing you could do if so interested. Go to a business conference. I am going to this one this saturday. Should be interesting

 

[meccaboy858]

Thanks for the response fellaz, now that's the kinda response I expected outta uz guyz I still have to read alot of it but I'm sure there's some good stuff in here. Thanks again.

Migs