Finance/Investing ITT

[Alkasquawlik]

anyone need or want a Scottrade account please pm me. I recommend someone we both will get 3 free trades. Not much but hey.

I'll take you up on this in a week or so.

I heard ZENG is about to take off today.

[Surtr]

Buy a house. Then sell it when the market comes back up. When I was your age I was totally stoked about getting into the stock market. The problem with the stock market is you have to have quite a bit of money (and be willing to lose it all) to make a good return. And even when you know what you're doing, there's still a certain amount of luck involved. I've since lost interest.

http://www.getrichslowly.org/blog/

Investing kinda sucks dick right now. If that's what you want to do with your life, I hope it gets better by the time you're ready.

[nando]

Buy a house. Then sell it when the market comes back up. When I was your age I was totally stoked about getting into the stock market. The problem with the stock market is you have to have quite a bit of money (and be willing to lose it all) to make a good return. And even when you know what you're doing, there's still a certain amount of luck involved. I've since lost interest.

http://www.getrichslowly.org/blog/

Investing kinda sucks dick right now. If that's what you want to do with your life, I hope it gets better by the time you're ready.

no you don't, lol. if you think you have to start with a lot of money to grow your wealth you will always be poor.

housing is still going to fall further.. historically, housing only returns about 7% a year. Except you're paying interest over that period, and inflation is about 3%. So in the end you basically break even. You buy a house because you have to live somewhere, to diversify your assets, or even to rent out, but not because the investment return beats the stock market. You'd be better off with an all bond porfolio.

Now is the BEST time to invest. I feel bad for anyone who's missed out on the 50% run from march because they were afraid.

[Alkasquawlik]

I'm hoping by the time I'm out of college, the economy will be back in an upswing and I can hop on.

A friend of mine started investing in June this year with $500, and as of today, he has made over $6k. That fuck. I need to hop in, I want an E46 M3.

I'm not ignorant, and know there is a ton of risk involved, but I'm young and willing to take some chances.

[nando]

why wait for it to come back? you will just miss most of the rally. actually it's already been mostly missed. Waiting for a pullback right now.

[Alkasquawlik]

why wait for it to come back? you will just miss most of the rally. actually it's already been mostly missed. Waiting for a pullback right now.

I'm not waiting, my statement was more geared towards getting a job in finance once I'm out of school.

I get paid on Friday, and I will be opening a Scottrade account. Only reason I haven't already is because I have no cash flow right now. Gas and food are killing me.

[87e30]

I wanted to get into this. Then I bought a motor swap. Fuck.

When I have cash I'm getting my ass into this.

Interesting thread.

[Surtr]

no you don't, lol. if you think you have to start with a lot of money to grow your wealth you will always be poor.

I never said you have to start with a lot to grow your wealth. I'm just saying you won't be making much at first. And it might not turn into anything. Of course you can keep making small amounts and wait for it to add up, then invest in something else.

housing is still going to fall further.. historically, housing only returns about 7% a year. Except you're paying interest over that period, and inflation is about 3%. So in the end you basically break even. You buy a house because you have to live somewhere, to diversify your assets, or even to rent out, but not because the investment return beats the stock market. You'd be better off with an all bond porfolio.

Of course it doesn't beat the stock market. It also doesn't have the risk of the stock market. And you get a house out of it. Which you can probably sell later and buy a similar house and have enough left over for a car thingy.

Now is the BEST time to invest. I feel bad for anyone who's missed out on the 50% run from march because they were afraid.

Buying when things are low is good, except if the company goes out of business. So basically your options are to have a little more risk right now, or to make very low returns. Both options suck if you ask me.

[nando]

I never said you have to start with a lot to grow your wealth. I'm just saying you won't be making much at first. And it might not turn into anything. Of course you can keep making small amounts and wait for it to add up, then invest in something else.

It's not the little bit at a time that matters, it's the little bit at a time compounded over 30+ years that is so powerful. You don't have to make huge amounts overnight; it's the get rich quick mentality that gets people into trouble. The rewards more than outweight the risks in the long term, and seeing how most people here are less than 25, they're the ones who can benefit the most. There are no gaurantees in anything, otherwise you couldn't make any money out of it. You could get shot tomorrow and die. Better not go outside I guess?

Of course it doesn't beat the stock market. It also doesn't have the risk of the stock market. And you get a house out of it. Which you can probably sell later and buy a similar house and have enough left over for a car thingy.

are you really saying there's no risk in real estate, after the huge bubble that just imploded? Even regular people who didn't over extend themseves are faced with owing more than their house is worth. they are expecting 48% of home owners will have negative equity in a year or two. That seems like risk to me. 80% of sub prime borrowers will have greater than 10% negative equity. Nobody with a brain would continue to make payments in that situation, even if they could.

it's not even that it doesn't beat it, it doesn't really make you anything. Yes, you should buy to have a place to live. That makes sense, you have to live somewhere and why pay somebody else's mortgage for them. But you aren't going to be able to retire based on built up equity in your home, unless you get extremely lucky.

Buying when things are low is good, except if the company goes out of business. So basically your options are to have a little more risk right now, or to make very low returns. Both options suck if you ask me.

so don't buy junk. There are tens of thousands of high quality companies that pay dividends with solid balance sheets that you can own. Buying Citi or Ford for $1 a share was risky, but how likely do you think it is that wal mart, mcdonalds or intel will go bankrupt in the near future?

And if you think 50% return overall in 5 months is low, I don't know what else to tell you. Even with the highest quality "low return" stocks you could have made an easy 10-20% just because people were selling more out of fear than because the underlying value of their stocks were low. And that doesn't even count dividends.

[BillBrasky]

Alkasquawlik,

Congratulations on deciding to take up investing. I started out back in Sept. 2001 with $50/month in a Roth IRA (I don't have access to a 401K) while the market was still on its way down from the dot com bubble. I soon realized, after running the numbers, that I could retire years, even decades earlier if I maxed out my contributions. I rode the '03-'07 rally all the way up and decided to go cash in early '08 and missed a good chunk of the market collapse, then bought back in first quarter 2009. I also opened another private equity account with TDAmeritrade in 2007. I use that to play around with some high risk stuff and the volatility in the markets over the last year has been VERY kind to me.



It's good to see a lot of people on this board interested in investing. I was thinking about making a thread about this a few weeks ago, but never got around to it. The earlier that you can start saving money and investing, the sooner you'll rise above the masses of people slaving away to buy stupid stuff that they don't need and probably can't even afford.

[Surtr]

Lots of stuff.

I basically agree with everything you're saying there. The only thing is, buying a house CAN help you retire, since you will require a lot less money to live if you're not paying rent or a mortgage.

Basically my advice summed up is that you shouldn't try to get rich quick, unless you can afford to lose everything you invested. There's a reason you see a lot of old guys in sports cars. It took them that long to be able to afford them.

[nando]

I basically agree with everything you're saying there. The only thing is, buying a house CAN help you retire, since you will require a lot less money to live if you're not paying rent or a mortgage.

Basically my advice summed up is that you shouldn't try to get rich quick, unless you can afford to lose everything you invested. There's a reason you see a lot of old guys in sports cars. It took them that long to be able to afford them.

that's what I'm saying - investing in stocks isn't neccesarily getting rich quick. Yes, you can do it, but you have to take on a lot more risk.

Diversifying and owning different assets (bonds, stocks, a house, land, etc) reduces the risk of losing everything significantly (investing 101 anyone?). Over the long term investing in stocks (and a mix of bonds, as you get older) you can build up enough wealth to retire in the mediterranean or something instead of ending up in an old folks home (like most of my family does).

I don't invest so I can have enough money to buy a bentley or a yacht tomorrow. I already own a house and a car. I do it so I won't have to scrape by on social security and government handouts when I'm in my 70s. and I want to actually leave my kids something when I die. The only things I've ever inherrited from my wealth squandering family was my grandpa's wheelbarrow and a couple post hole diggers.

[Vedubin01]

Alkasquawlik,

It's good to see a lot of people on this board interested in investing. I was thinking about making a thread about this a few weeks ago,

Funny I was as well. But I am not well liked by some so I just kept it on the low. I commend anyone in the lower 20s thinking of their future and have enough brain to step out and do so. Just remember with every reward, it took some type of risk to get it. Do what you can and it will end up adding up down the road.

Just seems these bank stocks aren't slowing down. I know there is another correction coming so Ive been playing safe and or building money.
Some real numbers came out today saying a real correction in the unemployment is more like 16% not the posted 9.4% Not good when your looking into the future for some positive signs.

[rwh11385]

A house can be a good investment if lived in, since rent has zero ROI. There are upkeep expenses, and lawncare if a SFH instead of condo, ... but these can rewarding and fun weekend activities. Think about multi-line discounts on your auto insurance, too. Heck, if you find the right IRS tax form and have friends willing to pay rent, you can make a profit.

I hope Alkasquawlik isn't one of those kids who jerk off to Boiler Room. The truth is that finance isn't always heroic or sexy... and you don't need it to be to get good returns, unless you're only goal is try to impress people about talking about stocks and "what's hot".

What do you mean you want to work in finance? Corporate finance which is balancing the company's investments in other companies? Financial advisor which is annoying your friends to let you manage their money? Investment banker... which is working every waking hour?

A friend of mine started investing in June this year with $500, and as of today, he has made over $6k. I need to hop in, I want an E46 M3.

Hey, if Obama gets his way, the government would take 30% of that $6000 instead of just 15%... and what about many more people that tried to be like him and lost most of what they risked on penny stocks?

WHY WOULD YOU WANT AN E46 M3? In a financial thread, I can't believe someone else hasn't pointed out a near new car like that is nothing but a pile of debt for a depreciating asset with high maintenance costs.

Along with Get Rich Slowly, The Simple Dollar is good as well.

[E30ownerwithanopinion]

I have been investing for years… here are some lessons I have learned along the way….


Higher the risk higher the return
Don’t fall in love with a stock
Don’t be greedy
Know when to take a loss
Stick to companies you know and understand
NO ONE TALKS ABOUT THEIR LOSSES ONLY THEIR WINNERS


A good part of investing is figuring out your opportunity costs. RWH… although you are on the right track it’s not the complete picture. A house can be a good investment if the real estate appreciating at a higher rate than your interest rate taking into account what you would be spending on rent. Of course you would build a model to take all these factors into account but you have to look at the overall picture.