Finance/Investing ITT

[Alkasquawlik]

Are any of the forum members finance professionals?

How many of you guys invest on your own?

[BillBrasky]

I started investing on my own when I was 19. I'm now 27 and grateful that I was smart enough 8 years ago to get a head start on something that most people don't figure out until they're 40. One of the greatest mathematicians of the modern age, Albert Einstein, once said that the greatest power in our universe is the power of compounding interest.

[Alkasquawlik]

How'd you start investing?
Just trading on your own, or putting funds away in a 401k type of deal?

[rwh11385]

I have some friends who waste away on a phone all day trying to convince people they can handle people's money better than people can do on their own. I feel bad for them, as I do for people who are convinced that they need help if they could do just as good of a job on their own. Some are too lazy to manage their money themselves, or some may not be capable actually, but many should DIY.

Personally, read "I will teach you to be rich". http://www.iwillteachyoutoberich.com/ A lot of it is obvious and a good amount I was doing already, but it's a great guide to setting up your personal finances and investing. Automation is magical.

I have 3 funds I invest in. Vanguard ETFs that represent all of the US stock market VTI, all of the world stock market besides US VEU, and US real estate investment trusts VNQ. Don't worry about trading any particular stock and gamble your money away or lose any returns on the commission you will pay. 3 funds minimizes the commission you pay and is easy to track, although I'd recommend just letting it sit and earn you a solid return: 8%+ for me since June 15th even with the short tanking soon after. (I do not worry about bonds at all at my age with my side-investing / long-term savings)

I also put away over 10% into my Roth 401(k). Think all the benefits of a Roth IRA with no limit and ease of a 401k. All this goes into a lifecycle fund that automatically changes the risk / return allocation as I get older.

INGDirect is a nice place to save money and not worry about accessing what you don't want to spend, while getting a good return.
I use Scottrade for brokerage and have been happy with it. I'd save up ~$700+ and buy up a chunk of a fund so that you're only giving up 1% on commission expense at a time.

Charles Schwab has a cool credit card that transfers 2% of what you spend into a brokerage account, which is a good return and could help automatically invest some money on the side.


Once you handle these things automatically and without needing to worry about it, you have the freedom to enjoy your life and focus on more important things.

[John Rocker]

I lost all my money daytrading back in October 08.

Since March 09, I started with $300, and am now up to $14k from trading on BAC, C, WFC, and FITB. I figure Ive roughly tripled my money in about 5 or 6 months.

[nando]

I don't "trade" but I enjoy buying stocks, watching the market and putting money into my 401k.

if your employer offers 401k matching, take advantage of it and max it out. After that put money into a Roth IRA, max it out if you can, especially if you are young. The advantage to the Roth IRA is capital gains are not taxed, which is huge.

I also like stocks that pay good solid dividends, that's money I can reinvest and purchase more shares, even if a stock goes down. Diversification is key as well.

trading can be a bad idea, not just because you probably don't know what you're doing - but you also have to pay comissions and taxes (if you made money) on every trade. If you left it alone that money would still be in there earning a return. Basically if you have the time to trade effectively you are probably doing it for your job.

You need to figure out how much money you will need to retire and continue your lifestyle into retirement (there are online calculators for this). a few hundred thousand will not be enough, unless you want to get stuck in a retirement home and living off social security (if it still exists). Even a million dollars will probably be scraping by in 40 years. That means you should be saving as much as you possibly can to reach your goal. My goal is 3 million by the time I'm 70. I have 40 years to get there, but if you are only 20 you have a 10 year head start which makes a huge difference. even if you can only save $50 a month now, do it..

[John Rocker]

Also, brokers are a ripoff. No need to pay him commission, etc, when 93% of brokers can't even beat the S&P 500.

If you plan on doing that, might as well go with Scottrade (which I use), and just buy shares of SPY (S&P 500 ETF) and leave it at that.

[hank_bukowski]

Also, brokers are a ripoff. No need to pay him commission, etc, when 93% of brokers can't even beat the S&P 500.

If you plan on doing that, might as well go with Scottrade (which I use), and just buy shares of SPY (S&P 500 ETF) and leave it at that.

iono bout u gays but im not gonn listen to a gut who loss all money daytrading back in octobar of '08

[John Rocker]

I only lost moneiez during the Keepin it Cool Summer Sale, adn it was because some queef drover her Audi A15 through mai storez.

[Alkasquawlik]

Kish, you're only 30 years old? I thought you were older than that.

Finance is something I would like to do as a profession when I'm out of school, so I'm trying to learn as much as I can right now.

[scabzzzz]

See sig

[Alkasquawlik]

You still owe me $10

[z31maniac]

if your employer offers 401k matching, take advantage of it and max it out. After that put money into a Roth IRA, max it out if you can, especially if you are young. The advantage to the Roth IRA is capital gains are not taxed, which is huge.

So do you suggest only putting up the company match in the 401k (3% of gross salary in my case), then taking the extra I'm putting in the 401k and switch to a Roth IRA or Roth 401k like Heeter suggested?

Currently I put 6% of my pay in along with my 3% company match, so I'm getting 9% of salary in my company 401k (with my allottments I earned a 12% return on my last quarter).

Should I take the extra 3% I'm putting in my company 401k and put it in a Roth account? Should I do any post-tax contributions to my company 401k?

I know I need to be putting in more than 9% of my earnings into retirement accounts, but I'd like to get some other things paid off first before I contribute more to savings and retirement.

[Alkasquawlik]

Isn't the max you can put into a 401k annually roughly $15,000?

[John Rocker]

I believe IRA has a max, not sure on 401k.