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      10-24-2016, 04:45 PM   #1
HyeWarrior
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School me on investments?

So I think I'm finally in a position to actually start saving for retirement/investing, though I do have plans of getting my masters (PA). I'm 26, making "ok" money, but I definitely want to start saving aside from my general savings account.

Any tips? I know my employer matches up to 4% but this isn't my career. Not planning on staying here for more than another year.


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      10-24-2016, 04:52 PM   #2
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Teach yourself

http://mobile.nytimes.com/2016/10/16...investing.html

Savings Accounts are awesome.
FIRSTRADE or any good online service is vital.

My Aunt would say "stay away from lawyers and brokers". I think that might be the best investment advice.

Someone asked the same question last week - I said familiarize yourself with Treasurydirect.gov

I've seen people take big financial hits with; divorce, buying the wrong house, buying the wrong used car, getting sick. And getting involved in business with the wrong people - friends, neighbor's.

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      10-24-2016, 05:05 PM   #3
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Quote:
Originally Posted by ScottSinger View Post
Teach yourself

http://mobile.nytimes.com/2016/10/16...investing.html

Savings Accounts are awesome.
FIRSTRADE or any good online service is vital.
only if your beating inflation. if not why bother.
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      10-24-2016, 05:16 PM   #4
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I'd recommend stocks. Anyone looks good in the market today and I suggest you start looking in to supporting fields such as mining and build up your portfolio.
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      10-24-2016, 05:22 PM   #5
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Originally Posted by kprocivic View Post
only if your beating inflation. if not why bother.
In regard to savings accounts? My opinion is more on the line of minimizing spending and accumulate cash. As you age and death or irs or whatever, it's great to have large sums of cash in a locked safe that won't be taxed. If your young a savings account is the safest and accumulating cash regardless of interest is the best buffer.
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      10-24-2016, 05:31 PM   #6
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Always invest (at minimum) the amount that your company will match! That is an automatically 100% ROI right up front. It doesn't matter how long you are planning to stay with the company since you couod roll it over to the next company or an IRA account.
Individual stocks are not for an average Joe investor! Maybe in the future when you already pay off the all the debts and max out all other forms of investment.
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      10-24-2016, 05:45 PM   #7
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      10-24-2016, 05:48 PM   #8
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Remember, any investment you make make sure it is low on fees. Look up the recent New York Times article on teachers in savings. A real eye-opener.
And in my field, when it comes to life insurance, term life insurance and par whole life are the two ways to go. Par whole life always beats universal life and indexed Universal life. You pay a lot less in fees.
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      10-24-2016, 06:00 PM   #9
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One of the best bits of investment advice I've ever received was from my father: invest in things you know. He was a metallurgical chemist in the mining industry and therefore could read an assay report and immediately know whether the company or mine would be a success. He transferred that approach to energy, telecom, and REIT's.

You don't say what work you do, but if you're highly knowledgeable you can use that knowledge to understand what companies are going to be successful or not. As you branch out, use that approach ... learn the industry as an investment tool.

The last thing I would say is (almost) always invest in stocks that pay dividends. It's free ROI that you can use to reinvest. Better yet when the company provides a sponsored DRIP because they'll discount new shares and the purchases are commission free.
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      10-24-2016, 06:06 PM   #10
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And for utility stocks you often can buy stocks directly from the utility company w/o needing your own brokerage services
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      10-24-2016, 06:09 PM   #11
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Quote:
Originally Posted by ScottSinger View Post
In regard to savings accounts? My opinion is more on the line of minimizing spending and accumulate cash. As you age and death or irs or whatever, it's great to have large sums of cash in a locked safe that won't be taxed. If your young a savings account is the safest and accumulating cash regardless of interest is the best buffer.
that's a good point to attain cash.
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      10-24-2016, 06:15 PM   #12
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i'm a real estate guy. i don't sell it and neither does my family. one thing i noticed growing up, a solid percent of rich/wealthy people have a strong foundation in real estate. i educated myself on the internet and simply watched the market. i saved for an opportunity and jumped on it when it presented its self. i own my primary residence and two rentals. i bought one in 2012 and the other in 2015. i'm only netting about $400 after all my costs/taxes/insurance/etc., but they have appreciated well and will be paid for by the time i retire (i'm 29 now) and will bring in over $3k by that time as well.
it is minimal work for the return, but you must have a long-term vision. some people will think you are wealthy now, but its the opposite, i have to more carefully watch my money because i now have tenants that rely on me. i plan on buying more, but the market is crap right now. whatever you do- educate yourself on it, save money, and strike when the opportunity you've educated yourself on presents its self. there is no such thing as luck, just preparation, presentation, and execution. start preparing!
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      10-24-2016, 06:28 PM   #13
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Join these subreddits:

https://www.reddit.com/r/financialindependence/

https://www.reddit.com/r/personalfinance/

Join this:

https://www.biggerpockets.com/

- Read these often. Learn from others on these sites.

-----

My general advice? Be patient, and save your money (start yesterday). It will grow. Enjoy your money, but don't buy bullshit (we all do it, many way beyond their means) - avoid lifestyle creep, as your income increases over time. Do this, and your money will make you money - you won't have to work. In terms of investments, don't rush into anything volatile and fast. Get your slow holding pieces in place. Always max out with your employer (your 1 year situation might make it a little tricky currently), max your Roth, etc. I also like real estate, but you need to get your foundation first.
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      10-24-2016, 06:45 PM   #14
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Quote:
Originally Posted by Pheonix View Post
Always invest (at minimum) the amount that your company will match! That is an automatically 100% ROI right up front. It doesn't matter how long you are planning to stay with the company since you couod roll it over to the next company or an IRA account.
Individual stocks are not for an average Joe investor! Maybe in the future when you already pay off the all the debts and max out all other forms of investment.
This is all you need to know, OP. Put away as much as you can with the matching being the min. Start early and invest as much as possible. Diversify within the portfolio and don't select the investments by last year's performance. GL.
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      10-24-2016, 06:50 PM   #15
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Research compounding interest
Play with online calculators changing your investment start date to see how your money is affected and use that knowledge with the idea of compounding interest

Hopefully this scares you into wanting to save a lot more than you have anticipated. Remember to be wary of lifestyle inflation when you receive raises.

I always look at retirement calculators to see where I am headed. When you find that you are investing enough to have a nice surplus, then start to use your raises to fund more exciting and immediately gratifying stuff. (Assuming you want to work until average retirement age)

I was at a retirement seminar with people at least a decade older than me and was shocked at one person (dual income) when they said, "how do people save 10% for their retirement accounts?"

Look into mutual funds - Vanguard has some great ones with very low fees.

morningstar.com does a great job providing details

As the other person mentioned, be wary of high fees. a 1/2-1% difference in fees may not seem like much on $10k, but it starts to really add up over time as your pot grows.

Also, I have heard a benefit to Roth accounts is that they are accessible without penalties in case of an emergency. Example, you have invested $10k into a Roth account. This grows to $12,500. You can pull out $10k for an emergency without getting penalized. May be a good idea when you are young. Try to max out as many accounts like this as possible to live like you are poor while saving too much for retirement. In the case that you need it, you can withdraw the money without penalty.

Last edited by PoorLurker; 10-24-2016 at 06:58 PM..
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      10-24-2016, 06:53 PM   #16
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I'm in the industry deal with stocks, bonds, options, mutual funds, insurance, and private equity set up retirement/investment plans for people all the time any info you need pm me but it really comes down to what your investment objectives are, if you're looking for growth or speculation and how much capital you have to get started.. there are many different strategies
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      10-25-2016, 10:24 AM   #17
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Open your Roth w/ Vanguard. Buy a Target Retirement fund. (The further out the Target date the higher risk/reward ratio.) Set up an automatic deposit into this fund.

Always max out whatever your company matches on your 401k

Always pay off debts with more than the minimum payment
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      10-25-2016, 10:30 AM   #18
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[QUOTE=PoorLurker;20754790]Research compounding interest
Play with online calculators changing your investment start date to see how your money is affected and use that knowledge with the idea of compounding interest

Hopefully this scares you into wanting to save a lot more than you have anticipated. Remember to be wary of lifestyle inflation when you receive raises.

I always look at retirement calculators to see where I am headed. When you find that you are investing enough to have a nice surplus, then start to use your raises to fund more exciting and immediately gratifying stuff. (Assuming you want to work until average retirement age)

I was at a retirement seminar with people at least a decade older than me and was shocked at one person (dual income) when they said, "how do people save 10% for their retirement accounts?"


What's the old saying? Those who understand compound interest are destined to collect it. Those who don't are destined to pay it.
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      10-25-2016, 11:38 AM   #19
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VRG_135 what are US interest rates these days? Agree with the theory, but at current rates it's a very slow slog to gain any appreciable ROI.

While it's important to have some funds in safe and conservative interest bearing holdings, there is real value in diversifying and generating much higher ROI through equities.
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      10-25-2016, 01:03 PM   #20
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It's scary how many people don't understand compound interest.
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      10-25-2016, 01:24 PM   #21
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Quote:
Originally Posted by Aatish View Post
It's scary how many people don't understand compound interest.
I understand compound interest just fine. Invest $100 today @ 2% in an account that pays daily interest (compounds daily) and you have $122 in 10 years for an average ROI of 2.2%.

Yes, it's a simple calculation that ignores the value of continual additional investment, but the ROI itself doesn't change.

Contrast that to a stock with an average growth rate of 4% that trades @ $10/share with an annual dividend of $.50/share which your reinvest through a DRIP. Each share is now worth $14.23 and you own 10.44 shares for a total of $155 or an average ROI of 5.5%. That scenario doesn't include the impact of a DRIP discount further increasing the yield.

While everyone should have significant retirement savings that are conservative and safe, that should never be an exclusive growth strategy especially when you're starting relatively young.
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      10-25-2016, 01:36 PM   #22
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Quote:
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I understand compound interest just fine. Invest $100 today @ 2% in an account that pays daily interest (compounds daily) and you have $122 in 10 years for an average ROI of 2.2%.

Yes, it's a simple calculation that ignores the value of continual additional investment, but the ROI itself doesn't change.

Contrast that to a stock with an average growth rate of 4% that trades @ $10/share with an annual dividend of $.50/share which your reinvest through a DRIP. Each share is now worth $14.23 and you own 10.44 shares for a total of $155 or an average ROI of 5.5%. That scenario doesn't include the impact of a DRIP discount further increasing the yield.

While everyone should have significant retirement savings that are conservative and safe, that should never be an exclusive growth strategy especially when you're starting relatively young.
Wasn't trying to call anyone out on this thread, just saying.

I know a lot of people, whom are older than me and have families, as well as those near my age who do not understand the power of compound interest rates.

Completely agree that a completely conservative strategy isn't ideal. Some aggressive moves are necessary...but I feel that varies from person to person.
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