Questions on Investing

[brunswickite]

I just started working full-time after I graduated college in May. Currently I live at home and do not really pay many bills. Also, I have a good amount of money in the bank from working summers and during college. I would like to invest some money up to $5000 in either the stock market, or mutual funds or maybe even something else. I would like to start slowly and do my own reasearch but any pointers on where to find literature, what websites are good for tracking, and what places to buy would be very helpful.

Thanks.

 

[DaveSimmons]

search "invest", "trade" and "broker" (one at a time) in current and archived threads for a lot of good material.

 

[Night201]

I would work on building up a safety fund first. I know you live at home, and because of that, I would try to put at least $10,000 in a saving account first and then begin to invest in the stock market.

 

[brunswickite]

Originally posted by: Night201
I would work on building up a safety fund first. I know you live at home, and because of that, I would try to put at least $10,000 in a saving account first and then begin to invest in the stock market.

I have a little more then that in my savings. Also, by the time i finish reading up. and tracking where i want to invest I should have a healty safety fund.

 

[jkats]

If your company has a 401(k) plan and matches contributions, that may be your best bet - mine matches $0.50 on the $1 - an automatic 50% return! (You do have to watch out for any vesting period).

If your in it for the long term, your next best bet is a ROTH IRA. Over the long term, the amount of interest earned can be comparable to any other type of investment - and it will be tax free!

 

[brunswickite]

Originally posted by: jkats
If your company has a 401(k) plan and matches contributions, that may be your best bet - mine matches $0.50 on the $1 - an automatic 50% return! (You do have to watch out for any vesting period).

If your in it for the long term, your next best bet is a ROTH IRA. Over the long term, the amount of interest earned can be comparable to any other type of investment - and it will be tax free!

my company does have a 401k plan but unfortunatly they do not match the contributions. I plan on putting 5-10 percent into 401k initially. (I started 3 weeks ago, 401k starts after 3 months)

 

[brunswickite]

bump

 

[Munkies123]

i made 400 bucks one summer off some mutual funds sittin on my @ss out of like a 3grand investment pretty sweet i'd say

 

[austin316]

Originally posted by: jkats
If your company has a 401(k) plan and matches contributions, that may be your best bet - mine matches $0.50 on the $1 - an automatic 50% return! (You do have to watch out for any vesting period).

If your in it for the long term, your next best bet is a ROTH IRA. Over the long term, the amount of interest earned can be comparable to any other type of investment - and it will be tax free!

if a company doesn't match a 401k, is the roth a better option?

 

[brunswickite]

Originally posted by: jkats
If your company has a 401(k) plan and matches contributions, that may be your best bet - mine matches $0.50 on the $1 - an automatic 50% return! (You do have to watch out for any vesting period).

If your in it for the long term, your next best bet is a ROTH IRA. Over the long term, the amount of interest earned can be comparable to any other type of investment - and it will be tax free!

What is long term? 10-20 years?

 

[jkats]

Originally posted by: austin316

Originally posted by: jkats
If your company has a 401(k) plan and matches contributions, that may be your best bet - mine matches $0.50 on the $1 - an automatic 50% return! (You do have to watch out for any vesting period).

If your in it for the long term, your next best bet is a ROTH IRA. Over the long term, the amount of interest earned can be comparable to any other type of investment - and it will be tax free!

if a company doesn't match a 401k, is the roth a better option?

If your company doesn't match, then the ROTH IRA is probably better. The nice thing about the ROTH IRA is that your contributions are not locked in. If you have an emergency and need $$, you can withdraw your contributions at anytime w/out penalty (earnings may be subject to tax/penalty). Many brokerages will also let you invest the money in your ROTH IRA anyway you choose (i.e., in individual stocks, mutual funds, etc.). In essence, it's like any other investment - but earnings are tax free!

brunswickite, long-term meaning you plan to withdraw at retirement. Early withdrawal may mean earnings are taxable (although contributions are not, since you already paid taxes on them). In this case, the investment will be like any other investment (no worse, but no better either) - in effect, you simply lose the advantage of tax-free earnings.

The only downside to the ROTH IRA is that you are limited in how much you can put in per year (currently $3000). Consequently, it's best to start maxing your ROTH IRA each year when you're young - the larger you can get it, the greater your tax-free earnings will be. If you wait too long to start investing in a ROTH IRA, you will not be able to grow it very large.