Can someone give me the rundown of investing?

This is the model my wife and I employ:

• Get an education
• Get a job
• Max out 401k
• Live within your means
• Retire in your 50’s

While some will say you can get lucky and retire before that, my luck isn’t so good, so I learned hard work and determination go along way.

To answer the investment question, my wife is a banker and she looks for stocks that have good dividends and their payouts. We tend to invest in them, and keep a diverse portfolio.

Hope that helps.

 

1st. If your married and both are working, learn to live on 1 income. Invest the rest in savings, and 401k's.
2nd. Keep any credit cards in a safety deposit box. They will get you in debt quicker than anything I know of.
3rd. When you have a 6 month supply of cash, keep it accessible at a weeks notice for emergency. When you have another supply of cash, get a 1 yr CD and when time allows get a total of 4, spaced 3 months apart, now your covered for 2 years should worst case happens. When you have that, focus on retirement.
4th. Remember how long it took to save what you have. If it took 1 year to save 5K, remember that when you want to spend it.
5th. When ever possible, don't burrow money. Wait till you can pay cash whenever possible.
6th. I never give money to an investor that I can't afford to lose, it is a gamble.

If you don't understand what is happening, don't play the market for the short term. Stocks are for long term.

We live frugally and at 50, were were debt free, (including our house) his has worked well for us, and we both retired at 62, with a 20 yr cash reserve.
Saving a dollar is worth more than earning 10 and spending it foolishly.

Hope I wasn't too preachy.

 

start a small business out of one of your hobbies. investing is for suckers

 

You can still make a decent buck investing, just don’t think you can day trade your way to retirement .

Humility and hard work go along way.

 

My dad gave me a book a decade or so ago, but it has been kept up-to-date and a new edition is set to hit the shelves in January.

Yes, believe it or not, books are these things that you read that have been printed on dead trees....

Anyway, it was a GREAT read and helped me understand a lot about investment.

And YOU NEED TO UNDERSTAND IT.

It's not that difficult.

We have money invested in several ways, and all of them are doing quite well, but we keep it invested, which is why we mostly live like hobos....

I would suggest you get the latest edition of this book, read it and it will give you a solid foundation on which to base your future efforts. You CANNOT jump willy nilly this.

You know, public libraries are great places to get FREE copies of books.
kris

Review: A Random Walk Down Wall Street - The Simple Dollar

 

Good on ya! I wish I'd been more disciplined when I was younger. But we were young and stupid ... and we had outrageous medical expenses from having two kids with cystic fibrosis. But I did take advantage of my employer's matching funds in the 401k plan. I should have put in more.

At any rate, investing is good if you don't try to time the market and you don't fall for the 30% return every year, guaranteed scams. I have mine in a Vanguard account. They make it very easy and they limit your transfers between funds to protect you against trying to time the market and also to keep down their costs (and fees), so you get more of what your investments earn. I stay away from the managed funds and stick with the funds that follow an index. In my case it's been the Index 500 that mimics the S&P 500. Over the past 10 years, it's averaged over 13% rate of return (ROI). But it is very volatile and I'm close to retirement age, so I've moved most of my account to a fund that's mostly bonds. It only fluctuates about half as much as the S&P, but it also doesn't have quite the earnings potential.

Now you still have to decide between an IRA, a Roth IRA, or a regular taxable account. Have fun with that!

 

1. If it sounds to good or claims to be guaranteed, stay far away.
2. Live below your income.
   
3. Don't drink, smoke or play the lottery.
   
4. Invest in yourself first. Education, training. Something that advances your earning potential.
   
5. Take advantage of any company matching for 401k or stock purchases but don't put all your savings in your companies stock.
   
6. Save as much as you can in a savings account and when you have 3 or 4 months income in the savings account, open another and then let that second one be your long term fund. Once you have enough in your long term fund, open a Vanguard account using a broadly diversified stock fund.
7. Don't buy individual stocks until you can afford the risk.
8. Don't try to beat the market or time the ups and downs. Smart people spend a hundred hours a week trying to do that and part time folks just can't compete.
   
9. Slow and steady wins the race.
10. Marry one person and stay that way for life.
    
11. Buy a house for shelter value. Selling a house costs you a big sales commission.
    
12. Don't buy a new car every 3 years or the fancy brands.
    
13. And above all read even if only at the local library. Economic trends. History of economics.

 

Before I was 34, I had never even thought about "investing." I didn't think I had enough money, and knew very little about it. Then I met my wife, she had mutual fund investments and it got me interested in learning about savig for the future.

These 3 books helped me a great deal. They are very basic and easy to read. Available on Amazon, etc. about $8 each. They are skinny books, so you won't feel overwhelmed in reading them. The Wall Street Journal "Guides"....

 

bisco has a point. There are all kinds of financial "schemes" out there, and some people can, and do, lose a lot of money. Time is on your side, use it to read and learn.

Investing is a long-term proposition. Requires a lot of patience. Keep it as simple as possible. Run from the "get rich quick" plans. Or real estate "flipping" deals. It took me 25 years, of slowly building up savings and having money taken out of my paycheck twice a month that went into the 401k plan at work. I began with as little as $50 or $100 per month.

Never got RICH, but ended up with a nice modest nest egg that is very important to my survival today, at age 65.

 

Sorry, it double posted again. Deleted.

 

• Buy low
• Sell high
• No wooden nickels
• If they can't make money on it directly, they'll offer it to you so they can make money on management fees

 

Lesson number one for investing: DO NOT ASK RANDOM STRANGERS ON INTERNET FOR ADVICE.

 

Nothing wrong with suggesting that a young person become more informed, and start saving some money, in general.

But as far as recommending specific stocks, or specific investment companies, I agree, he needs to make his own decisions. Or consult a good professional financial advisor. (I deleted a specific mutual fund company suggestion.)

And if you want to get picky, I've seen some very questionable, foolish, and downright dumb car advice on this website. Be aware and cautious in ALL dscussion forums.... And with ALL internet strangers.

 

"Investing" takes many different forms. The ones you hear about most often are NOT appropriate for most of us.

Start out with a bank savings account.
When that starts looking "full", then buy some CDs from the same bank.
Those are "cash equivalents" and it is really hard to lose any money with that kind of investment.

To make a lot of money on an "investment", you risk losing a lot too.

Look up a guy named Dave Ramsey and follow his advice.

Anything that sounds too good to be true.......really IS.

 

Don't pay rent, own the house, equity.

Whats precious, gold, diamonds.....water.
Investing in water via stocks or bonds wouldn't be money lost, water is going up in value every day.
Don't put all your egg's in one basket, some that seem trustworthy won't be, learn as you go.

 

Everyone has pisted great advice, if you save $10,000 and put it into a money market type investment when you are 20, you should have 3 to 400,000 by the time you hit 65 assuming it was a stable group.

We had a small inheritance in 2009 when interest was .0003% and put it into annuities where you can't touch it for at least 10 years and have made 08% and better, so the sooner you start, the better off you will be.

Debt free is the first step, avoid precious metals as they are expensive, we saved a weeks pay every month over and above what I was paying into 401k. I started 28 years ago, and retired @ 63. We still save money, like as much as a car payment and to cover appliances and such.

Whole house solar panels guarantee cheap utilities, steel roof, will not have to be replaced, live like a refugee but enjoy helping others. JMHO

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First thing to do is get out of debt and then stay out.

 

I tried investing once. I put $900 into stocks. Within a month it was $3,000. I added $5,000. Within a few weeks I was up to $11,000. (+$5,100.) Next week the bottom dropped out of the market - overnight. That $11,000 was now about $500.00. It sat that way for several years until I took the loss for tax purposes. (-$5,600.00.)

Work hard, plan, save, don't overspend. Max out your 401k. Investing is for rich people who can afford to lose money.

 

Splendid advice!!!

You just contradicted your advice about the 401k. That is an investment. A great one.

The experience in your first paragraph sounds more like a bet on one stock. Never a wise investment unless you have insider information. Then it's a crime.