How do you invest?

[IWantATgirl]

Investing is alot of fun. I just hate the fact that I cant touch the money without some type of penalty. It depends on what kind of investing you want to do. I have my money spread out a lil. I have my 401k at work with little to moderate risk(Long Term). I have a chunk in some American Funds with a 5-7yr plan, its a lil higher risk but fairly safe. My nest egg for retirement is my Roth IRA, I highly recommend these for the future. They give good returns, and you can write off your investment on your taxes. CD's are usually good if can find a nice rate and you have a nice amount to put in. I really recommend seeing a financial advisor, they wont charge you to talk to them and they can point you in the right direction for the way you want to invest.

Eric

[IWantATgirl]

See if they have a financial advisor they like? They could be your best help. A guy I worked with years ago quit the retail sales business and went into investments. I promised him that when I got some money piled up that I would come see him, well I kept my promise and he pointed me in the right direction so far. Have fun investing!

Eric

[IWantATgirl]

and while thugs might be ur thing in bed, try and find one whose name ends in "stein" or "berg" lol

Interesting, my name ends in berg. :lol:

[Vicki Richter]

I gained and lost a good amount of money in the stock market during the dot com crash thingy. Day trading was a lot of fun while it lasted. I still think the stock market is a good idea.

I think IRA's, specifically a Roth are the way to go if you don't work somewhere that offers the 401k deal (and maybe even if you do).

http://invest-faq.com/articles/ret-plan-roth-ira.html

I think investing in foreign markets is definitely the way to go right now. Europe and Asia Pacific growth funds are really attractive. Some of them are netting returns well into the double digits, and have a multiyear track record of doing so.

V

[BlackAdder]

Vicki is right. The industrial revolution hitting west Asian and Eastern European markets is amazing right now...there pouring money into industrialization......There going to pwn the auto market in the next 10 years.....GM is a dying elephant, plagued by mismanagement and poor/unattractive designs....


Those markets are where its at. Dont trust money men...they are indeed scumbags....I begged my grandparents to pull out of the tech market before the crash and put money into real estate....If they had listened to me instead of there "money man" they would be Multi-millionaires now instead of struggling to keep the taxes paid on there property.

[GroobySteven]

All good advice - listen to the postings above and get a Roth IRA right away as well as some mid-risk funds.
IMO the little people like you and I, don't make real money (money to live off day to day) on the stocks but use it as a place to put you're money away with a small to moderate growth.
However, easily the best place to put you're money in is property. If you have you're own apartment/house then look at buying another and using it as a rental until the value goes up enough that it's either worth selling or keeping as a rental - if you can rent it for most of the mortgage on it, then you're gaining fast.
Just my bit!
seanchai

[MacShreach]

All good advice - listen to the postings above and get a Roth IRA right away as well as some mid-risk funds.
IMO the little people like you and I, don't make real money (money to live off day to day) on the stocks but use it as a place to put you're money away with a small to moderate growth.
However, easily the best place to put you're money in is property. If you have you're own apartment/house then look at buying another and using it as a rental until the value goes up enough that it's either worth selling or keeping as a rental - if you can rent it for most of the mortgage on it, then you're gaining fast.
Just my bit!
seanchai

Seconded. Just personal experience, but property makes a lot of sense, though you have to keep an eye on the tax angles. The downsides are the relative lack of liquidity, if that's an issue, and property does have an ongoing cost implication, as it has to be maintained. Still I think it's a good place to have some of your money anyway.

[hwbs]

quote: and while thugs might be ur thing in bed, try and find one whose name ends in "stein" or "berg" lol LMFAO

its true what J says about financial advisors....they hire them off the street literally....when i was layed off , i would recieve emails from monster.com for these so called reputable companies asking me if i was into becoming a finacial advisor , when i had no pervious experience... just my :2cent

[BeardedOne]

Many of the above posts (All good) are assuming you have a fair chunk to invest from the outset. If this is not the case, an easy-in/easy-out small ticket investment is PayPal, whose money market is currently paying 3.86% (And rising) and is the highest rate money market on investment amounts under $5000. It has a debit card attachment, in case you need emergency access to the cash (With no withdrawal penalty) and you can transfer money into it with the click of a keyboard. It's also a bonus if you do any online retail business (Ebay, Yahoo auctions, etc.) since that money can just stay in the account and tally up interest. There's no minimum balance penalty, so you can tranfer the entire balance off to another investment account later without worrying about a monthly fee being assessed (The $9 service charge on a NOW account with a $300 balance requirement tallies up to a 36% 'interest' each year).

We throw all of our dotcom $ into PayPal because the 'competitive' commercial rate around here is just now capping 1% and we enjoy the extra 2+% we get from PayPal.

[BeardedOne]

when i had no pervious experience...

I always got the impression that you had =lots= of 'pervious' experience. :lol: :lol: :lol:

[flabbybody]

the thing about investing is there are no short cuts. hot stock tips and double your money schemes are for losers. You need to be patient and disciplined about saving your money. There are plenty of low minimum mutual funds out there that track different sectors of the market. A company like Vanguard has a nice choice of products, all with extremely low fees.

and there's nothing wrong with someone who's name ends in berg. that would be me.

[Ecstatic]

You're thinking about this at a young age, Angela, and that's a good thing because you've got time for the miracle of compound interest to be of huge benefit. OTOH, there's aging boomer like myself, anywhere from 45 to 60 y.o., who are trying like hell to close that gap between now and retirement while still living a decent life today, and that's hard. When I was your age, I was convinced that us hippies were going to overthrow capitalizm and start a utopian society based in equality and sharing yadayada. Needless to say, that pipe dream went up in a puff of mj smoke and here we are scrambling today. Be smart; set aside 5% now and you'll do well in 40 years.

[stewtwo]

hi;
If i were you i would seriously consider real estate. I'm out on the east end 'hamptons" and the housing market while slowing offers a much better rate of return then the stock market. It is a bit pricey to get started though,but if you want a beach cottage anyway it makes sense.
hope that helps. :o

[BeardedOne]

It really is all a matter of what you have to start with and how agressive or conservative you want to be with your returns. You're at an age now where agressive, long-term investment can get you some comfort down the road.

After several false starts through the years, from crooked and inept business partners to booms and busts of retail fad markets, I finally got into an employment picture that's allowed me to make up for lost time. At this point I am socking away 15% of my base income (Matched to 5% by my employer) and have that in agressive stock index funds that have averaged over 10% yield (One year was as high as 30%, but has been balanced off by other years of negative %). At current rates of return, that retirement income will equal or exceed what I am making now. Add that to real estate, business investments, and close management of my day-to-day handling of money, and I'll at least live comfortably, if not in luxury.

But it's the little things that will kill you. I know people that spend down to the wire and end up getting hit with "courtesy overdraft" fees, where the bank lets you spend =their= money for $30 +/- per transaction, until your next deposit comes in. So, that $5 lunch that you paid for with your ATM card could end up costing $35 instead. People making more than I do are paying late fees, overdraft fees, overlimit fees, and losing their houses and cars simply because they aren't watching the little things like minimum balances, billing dates, etc.

I know this because I'm the guy they call for help. 8)

Yo, Angela! PM me, we'll do lunch. :)

[BlackAdder]

If you havent bought a house yet Angela, consider getting a duplex and renting out the other half to pay the mortgage. This is the best investment I think a person can make that doesnt have alot of money to throw down. Its relatively easy for a first time home buyer to do this. After you have some equity buy another one and rent that one out...>Get in really good with a general contractor for repairs...one you can trust and does decent timely work....

when you have 5-10 rental properties your well on your way...when you have enough you hire someone like me to run them for you and off to the Islands you go:)

[flabbybody]

that's good advise blackadder, but I don't think Angela's starting out with $100K for a down payment.

[Quinn]

Angela,

Some of the advice you have received above is solid. First, I would take J’s advice and seek the help of someone, preferably a family member or family friend, who has an extremely successful track record. Ask them to help you by instructing you as to how they make their decisions. Second, Seanchai pointed to real estate as being a particularly desirable investment option. He’s right because, unlike many other investment options, you can always live in a house. Real estate is also a great hedge against inflation. That said, you still need to be very careful as to when and where you buy real estate. Many markets are currently overpriced and will become dangerous over the nest few years.

Look, a lot of this probably isn’t immediately applicable because you don’t have that much to work with – yet. What I can tell you is that you need to take the time to become a truly informed investor. To be successful, you will need to be able to rely upon your own investment acumen. Professional investment advisors almost never get it right, and they won’t care about you unless you have millions to invest. Furthermore, it’s common for investment periodicals and the media to give conflicting or inaccurate projections, which means that you will need to be able to recognize bad data and advice. If possible, take at least a few economics courses (learn cost benefit analysis, etc.).

A couple of other things:
a) Live below your means so that you can save and invest as much money as possible (most people who possess nice things don’t own any of it and never will);
b) Build up your credit so that you can use it as leverage for future investments;
c) Stay out of debt as much as possible (schooling is one important exception);
d) Look as much as possible to foreign markets in the future;
e) Since you are young, don’t be afraid to take carefully calculated risks. Most truly successful investors are pursuing the right opportunities long before said opportunities become conventionally accepted wisdom.

Best of luck,
-Quinn

[BeardedOne]

And if Perlman or Icahn buy in, bail!

[Vicki Richter]

Angela,

I would recommend you buy a few high rise apartment buildings and a couple grocery stores. You can always start out with a Circle K or 7-11 if you don't have enough for a Safeway. The other alternative is to buy some fast food franchises. Go ahead and buy a Subway or even a McDonalds.

If you can, head out to Texas and see about purchasing some of the remaining oil fields.

I hope you find my revised suggestions helpful. I am almost positive you would make money on each of them.

V

[Quinn]

I would recommend you buy a few high rise apartment buildings and a couple grocery stores.

I know this is meant to be funny and all, but it does bring up a somewhat interesting piece of trivia. Gocery stores typically operate with a profit margin of 1-2%, making them one of the worst opportunities available anywhere.

-Quinn

[brickcitybrother]

Angela:

I will agree most with Quinn. While you did request investment advice, the first analysis has to be with debt. Just remember that even Donald Trump's empire went through the hassle of a bankruptcy.

So I would rearrange the priorities in this manner:

1. Stay out of debt as much as possible. Purchase smartly and realize savings at every turn - where possible. I disagree with seanchai with respect to most property purchases. Unless done so free and clear, real property is not an asset but a liability because it carries debt service (a mortgage and property taxes) and creates additional liabilities. Moreover, despite what the media suggests, real property can be a very risky investment. Just think of the market (real estate market that is) of the 90s in Texas as well as the near total bankruptcy of NYC when its bond ratings fell do to the lack of performance of the real estate market.

2. Know your credit history and standing. Obtain a copy of your credit reports. It does not matter where you live now, you can obtain a FREE copy from each of the three major reporting agencies. P.S. Get them directly from the agencies as opposed to a website that 'offers' to combine information from all three. You need the action/account number from each agency to be able to respond to mistakes/errors.

3. Maintain at most a single credit card with which you can build your credit rating, if it is damaged. If it is not - consider using a charge card (Amex is the most popular) with a back up credit card (or a supplemental credit card from the charge card issuer (E.g. Optima, Amex One, Carte Blanche)

4. Create a forced savings plan. If you are employed, have your accouting department direct deposit a portion of your paycheck into a saving account/investment tool. This can and probably should be a 401k plan especially if your employer would contribute (as their contributions amount to FREE MONEY). By way of example - an employer who matches your contributions - dollar for dollar - up to the max of 15%, would double the amount of your savings. A side benefit is that the deposits are PRE-TAX dollars - possibly lowering your tax bracket. Other options are IRAs, Roth-IRAs, money market accounts and mutual funds.

5. If you are self-employed - incorporate! This does not mean use the symbols such as Inc., P.C., Co., etc. It means actually create a legally recognized entity such as a Chapter S or Chapter C corporation, a sole proprietorship or a Limited Liability Company. Doing this allows you to deduct from your PRE-TAX income - costs most individuals cannot deduct. By way of example, a home office is tax-deductible (defraying the costs of a home or an apartment). Similarly, there are deductions for autos, equipment, clothing, etc. Even meals and trips can be deducted (if legitimate business expenses are incurred).

Finally, read and stay informed about finances and debt.

I hope that this is helpful to you. It is just a rough skeleton of a plan.

Good Luck.


P.S. I define freedom as living debt free.

[Vicki Richter]

I would recommend you buy a few high rise apartment buildings and a couple grocery stores.

I know this is meant to be funny and all, but it does bring up a somewhat interesting piece of trivia. Gocery stores typically operate with a profit margin of 1-2%, making them one of the worst opportunities available anywhere.

-Quinn

Yeah but you also have to consider the volume... If you can sell widgets full time for a 50% profit margin, but you only sell $10,000 a year, you're really not doing that great. If you own a grocery store like the higher end ones I suggested, you're still going to be turning over millions a year in a store.

http://finance.yahoo.com/q/ks?s=SWY

And to prove my point, their profit was $10 billion last year. Not bad for a 1.56% profit margin huh?

My point was simple, most people really don't have money to invest into real estate. Yes if you already own a home, you can leverage it and buy other homes, but it's still designed for upper-middle class +.

[JonathanX]

1. Roth IRA

2. SEP IRA
(a retirement plan specifically designed for self-employed people and small-business owners)
if you are self-employed and want to invest more than your allowable Roth yearly contributions.

3. REIT's
(A security that sells like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages.)
if you don't have the funds to invest in Real Estate directly.

4. Mutual funds, CD's, TBills only if you want to play it safe.

5. Individual stocks

Get a Scottrade account (They have low fees)
http://www.scottrade.com
for IRA, Mutual funds and/or stock purchases.

IMO here are some stock tips:

If you want to play it safe: FDX, GOOG, AAPL

If you want to gamble a little like I do....

GTE - http://www.globetel.net (big news should be coming soon) recent news:
http://biz.yahoo.com/bw/051116/20051116005627.html?.v=2

GZFX.OB http://www.gameznflix.com
w/ recent Circuit City news....stock up...29% today alone. You should have seen it a week ago. Bear-in-mind....a risky penny stock but good potential. Just got 14000 shares myself last week for under $200!
Like Netflix BUT includes games for Xbox etc. and will be adding books and audio books in the future for rental.
Circuit City news:
http://biz.yahoo.com/iw/051005/097102.html

SIRI - http://www.sirius.com (Howard's coming nuff said!)

Good luck!

[Quinn]

Yeah but you also have to consider the volume... If you can sell widgets full time for a 50% profit margin, but you only sell $10,000 a year, you're really not doing that great. If you own a grocery store like the higher end ones I suggested, you're still going to be turning over millions a year in a store.

http://finance.yahoo.com/q/ks?s=SWY

And to prove my point, their profit was $10 billion last year. Not bad for a 1.56% profit margin huh?

My point was simple, most people really don't have money to invest into real estate. Yes if you already own a home, you can leverage it and buy other homes, but it's still designed for upper-middle class +.

V,

Your original point was understood, and I happen to agree with it. So far as grocery stores are concerned, the chains in the US are controlled by a handful of corporations (I believe the number is six). By agreeing to fix prices amongst themselves, which the government has previously alleged in an investigation of the industry, they have been able to artificially inflate prices at the consumer's expense and safely regulate competition. Only in this way has the industry been able to survive on thin profit margins.

If you happen to be a small store not affiliated with a major chain, insolvency is always around the corner – something the larger chains are more than ready to influence. Even the larger corporate-owned chains are unusually susceptible to strikes and the like. I guess my point is that it's a terrible industry to put you money behind due to the unreliable state of profitability. Something always works until the first time it breaks down.

-Quinn

[Canucklehead]

100% lottery baby. Go big or Go home.

[Quinn]

I would recommend you buy a few high rise apartment buildings and a couple grocery stores.

I know this is meant to be funny and all, but it does bring up a somewhat interesting piece of trivia. Gocery stores typically operate with a profit margin of 1-2%, making them one of the worst opportunities available anywhere.

-Quinn

So I've heard. But at least I'd have high inventory turnover numbers, lol.

No doubt about it. Still, so far as good ideas go, it's really all about researching how to grow a money tree :D We'll go in halves on the research cost or bring Vicki in and each take a third.

-Quinn

[McRen]

I'd invest in a forward thinking energy company. One that is already making money off things other than oil.

[Kramer]

First off, buy the book "Investing for Dummies" to help you understand how it all works.

IMO, you should go with (tax free bonds), (index funds) and an IRA. My broker says these are pretty safe investments. You will get growth, but you have to be patient. Throw all your extra cash into these investments, and you wont regret it. 8)

[BeardedOne]

I don't have a Roth IRA, but I used to hang with Bill Roth and that ugly ass St. Bernard of his. :)

Angela, if you have been working off the credit of relations it sounds like you might not have a decent credit file of your own. Get a copy of it and find out what's up.

The big 3, Equifax, TransUnion, and Experian have various free report offers (And allt hree will be succeptable to the new credit reporting act), so you should be able to get a free or cheap copy of your credit report. Because each has different sources, you should get one from all three in order to get a complete picture.

If "free" reports aren't available for you now, Equifax has a three-in-one that you can get from their site. It pings all three bureaus and gives you a snapshot of what the banks, etc. are seeing. They have a package called 3-in-1-plus-score for $39.95. You get the three bureau reports in an easy to read comparison format and you also get your current credit score and advice on how to maintain/raise it.

The scores go from 350 (Deadbeat scumbag) to 850 (Or is it 950?) which is Ivana Trump rich-bitch quality. I will guess that you may have a rating of 550, based on little or no credit performance. As time goes on (paying off student loans, etc.), that will climb. Significant life events (Higher salary, home ownership, etc.) will make big spikes in the number. I recently took a client from a lame-ass 400 to a moderate 650 in less than thirty days just by paying off and maneuvering some debt.

A score of 640 and above will make you attractive to reputable mortgage companies that will give you decent rates. Below that and you will wind up with "high risk" mortgages like those offered by New Century at 12% and up.

Your credit score will affect your credit card and mortgage rates, your insurance rates, and could make a difference in the quality and level of employment you get, so that number is big stuff as far as your quality of life goes.

Damn! I'm working on here again. :x