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Old 09-12-2016, 05:01 PM #16
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Here is some advice and then some additional reading for you.

1. Learn what you spend. Open a Mint account and pay everything not with cash (debit is fine). This will track and categorize all of your spending and it will be eye opening.
2. Do you have any debt? If so pay it off. Paying off a 5% car note or 20% credit card is the same as earning 5% or 20% on your money.
2. Get an emergency savings account. This should be 3-6months depending on your situation. Can you get a job paying the same amount in 3 months? Can you move back home? This all plays a factor.
3. Focus on your 401k. This is the easiest way for you to save for retirement without thinking about it. It is essentially Bettermint through work. If you have access to Vanguard funds, pick whichever is closest to your retirement year (Guessing you are in the 2060 range). The key thing with 401k is consistent investments of low cost, high quality, diverse funds. This is why people like Vanguard. It costs something like .1% a year and you have a great mix of US, International stocks and bonds. The Target Date funds automatically change your stock/bond mix over time too. To boot you also get some tax relief depending on your income level.
4. If you want to trade stocks, open a brokerage account with a couple thousand in it and trade around with that. etrade, scottrade or whatever. You do not want to be trading on your 401k with little to no experience. You will make mistakes, you will get emotional and you will lose money at some point (you can make it too) but you need to have this be separate from your 401k.
5. Since you are young, you will also want to buy a house/condo at some point. You will need to balance 401k savings and downpayment and reducing debt. It isn't fun or easy but the next 5 years of your life can honestly make the next 20 much easier. Once you get to your mid-30s, 40s etc, you will see how far ahead you are of your peers.
6. Getting "rich" and retiring early/well isn't a giant house with 20 cars and a plane. It is a paid off house that is sized for your needs, a reliable paid off car, and 401k with enough money that you can sleep well at night.
7. Last thing is I'm not sure what you do or what state your are in but any job with a pension is better than one without unless you are really making well into 6-figures. Getting a govt job(local, state or fed - fed is the best) at an early age plus saving a 401k would set you up for a very nice retirement around 50. Something to think about unless you are really passionate about what you do and your field and it doesn't translate to gov't services.

Resources:
Learn about mutual funds, 401ks, financial advisers at Bogleheads:
New to investing wiki: https://www.bogleheads.org/wiki/Getting_started
Forums: https://www.bogleheads.org/forum/index.php

Books I like:
Jim Cramer 'Real Money'. A primer on how a stock trader looks at the market and how to evaluate companies and their earnings reports. I know not a lot of people like him but this book is awesome.
Rich Dad, Poor Dad is another good one to inspire you. Not the most realistic (about real estate investment and the market now is priced high).
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Old 09-12-2016, 05:21 PM #17
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Quote:
Originally Posted by AKmoney View Post
There's some argument as to whether or not it's better to invest in a Roth IRA or a standard IRA. With a standard IRA, you pay taxes later but some argue that by that time, your overall income will be less and you'll be in a lower tax bracket than you were when you made the investment in the first place.

BTW - there are income limits to Roth IRA contributions - the amount you can contribute starts to fall from $5,500 once your income hits $117K. Admittedly that may not be a problem for a young investor just getting started.
Completely agree. Its definitely worth researching the pros/cons of each. Honestly, its probably a good idea to have one of each, because why not?

If I made $117k I wouldn't be too worried about contributing to a Roth IRA. With smart money management you could easily sock enough away to purchase a few rental properties and live off that passive income pretty much forever.
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Old 09-14-2016, 12:56 PM #18
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@OP

Here is how i started my learning journey, just for reference as YMMV,

My parents let me borrow their dave ramsey discs to listen to as i commuted to work when i had just graduated college. I learned a lot just listening in the car. Def beats most morning shows. And hey, its about my money of which i didn't have much at the time so i aspired to some of the basic tenets of his: 1) get out of debt and stay out, 2) save up an emergency fund, 3) invest and diversify. Dave is pretty basic, his model is built for people up to their ears in debt and not seeing a way out. Doesnt focus too much on investing just really good basics for you to build on

Then from there ive moved on to Bogleheads. A forum but also based on books by the founder of Vanguard (prominent investing company). These have gotten more in depth in investing and a lot of the time i have to take notes, tape flag, and supplement my reading with researching.

Does your company match your 401k contribution or an HSA contribution?. That is the first thing i would look into, maxing out that match.

From there you can look into maxing out your 401k to the investment limit each year (set by the IRS, look it up), maxing out your ROTH/Standard IRA (also set by the IRS look it up), and if you are offered an HSA option max it out. HSAs are arguably the best investment option you could ever be offered. If you are not utilizing it utilize it NOW, and then read all abou the benefits of it (triple tax advantaged, steward will pay out your qualified healthcare receipts at ANY time that you want a payout, you can invest the money in an HSA to make it gain interest and work for you).

strongly stressing: YMMV.
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Old 09-14-2016, 03:51 PM #19
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My advise is to avoid investing in the stock market. Especially if you have very little funds to contribute, like several hundred a month. Each month for many years you will add to the account/s only to see pathetic gains with lots of lost effort. I did stocks and mutual funds of all kinds and it was a waste of time and money. Buy a nice piece of land in a upcoming area. Over time you will pay it off and perhaps see nice gains too. Get rid of the mortgage, use your company match fund only. Living within your means is the smartest thing you can do.
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Old 09-14-2016, 05:23 PM #20
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Originally Posted by Muzzle of Bees View Post
My advise is to avoid investing in the stock market. Especially if you have very little funds to contribute, like several hundred a month. Each month for many years you will add to the account/s only to see pathetic gains with lots of lost effort. I did stocks and mutual funds of all kinds and it was a waste of time and money. Buy a nice piece of land in a upcoming area. Over time you will pay it off and perhaps see nice gains too. Get rid of the mortgage, use your company match fund only. Living within your means is the smartest thing you can do.
Using a service like Betterment or Wealthfront makes investing in the stock market trivially easy. They handle all the investment choices and they let you invest as much or as little as you want as they support buying fractional shares of individual funds. Their fees are very low and they don't charge commissions for regular account deposits (or withdrawals).
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Old 09-14-2016, 05:30 PM #21
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Using a service like Betterment or Wealthfront makes investing in the stock market trivially easy. They handle all the investment choices and they let you invest as much or as little as you want as they support buying fractional shares of individual funds. Their fees are very low and they don't charge commissions for regular account deposits (or withdrawals).
None of the investment firms make it particularly hard to take your money. Fees aside, it is the game that is swayed towards the huge players. People like us make very marginal gains at best. Just when you think you can retire the unpredictability of the market gets you.
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Old 09-14-2016, 06:08 PM #22
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None of the investment firms make it particularly hard to take your money. Fees aside, it is the game that is swayed towards the huge players. People like us make very marginal gains at best. Just when you think you can retire the unpredictability of the market gets you.
I agree, the system is rigged against the little guy. None of us are going to get the inside deals like Gordon Gecko but that doesn't mean we can't enjoy nice gains in the market. The unpredictability of the market is why we need to play the long game. Regular contributions over the course of years (if not decades) is what builds wealth. Avoid individual stocks and buy stuff that's diversified.
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Old 09-14-2016, 08:02 PM #23
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For those saying the market is rigged: have you ever looked at an Andex Chart? The stock market is one of the few ways the average Joe can actually build wealth. Just don't speculate on random tips from random people and buy big blue chip stocks that pay dividends. If you are starting with small amounts or doing monthly contributions, use a mutual fund or an ETF that consists of such companies. A couple examples of an ETF could be the Dow Jones Index, S&P500 Index, or NASDAQ100 Index. You could also find a mutual fund such as a US Equity Fund or US Dividend Fund.

In my opinion: I honestly think a well diversified balanced portfolio is a good place for a newbie to start.
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Old 09-15-2016, 09:16 AM #24
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The OP is asking for advise. For over a decade I invested between $200 and $300 per month in mutual funds, stocks, bonds, etc. I got tired of not making any money. It did have some money left after 2008. I cashed out and payed off my house. That was the best investment I ever made.

I will let you do the math. As the price of stock increases you have to invest more to get the same amount of shares or you get less shares and less profit. You are also going to pay a fee for managing your money. You can chase your tail for ever and hardly feel empowered by the system.
You have as much a chance at making a profit by researching scratch off games and buying tickets for the games that still have tickets with big prize money available. The stock market = Vegas. If I was able to get in IPO's that were not already bought by big investors and banks I might have a different view.
Do not ever forget the crumbs the market leaves for the vultures is disturbing to say the least.
Three things that will save you from getting desperate. Do not get married. Do not have kids and do not get into school debt from a crappy university.
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Old 09-15-2016, 09:55 AM #25
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Three things that will save you from getting desperate. Do not get married. Do not have kids and do not get into school debt from a crappy university.
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Old 09-15-2016, 12:48 PM #26
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Quote:
Originally Posted by Muzzle of Bees View Post
The OP is asking for advise. For over a decade I invested between $200 and $300 per month in mutual funds, stocks, bonds, etc. I got tired of not making any money. It did have some money left after 2008. I cashed out and payed off my house. That was the best investment I ever made.
The market tanked in 2008 but it's literally doubled in value since then. If you sold everything in 2008 you would have missed out on enormous gains.

Quote:
I will let you do the math. As the price of stock increases you have to invest more to get the same amount of shares or you get less shares and less profit. You are also going to pay a fee for managing your money. You can chase your tail for ever and hardly feel empowered by the system.
You have as much a chance at making a profit by researching scratch off games and buying tickets for the games that still have tickets with big prize money available. The stock market = Vegas. If I was able to get in IPO's that were not already bought by big investors and banks I might have a different view.
I disagree. This isn't how compound interest works. For example, starting with a balance of $0, if I were to invest the IRS' maximum-allowed $18,500 per year into a 401k plan at an average return of 6% annually, after 24 years I've got over $1M.

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Three things that will save you from getting desperate. Do not get married. Do not have kids and do not get into school debt from a crappy university.
Now this is definitely something we can agree on
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Old 09-15-2016, 02:13 PM #27
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The market tanked in 2008 but it's literally doubled in value since then. If you sold everything in 2008 you would have missed out on enormous gains.



I disagree. This isn't how compound interest works. For example, starting with a balance of $0, if I were to invest the IRS' maximum-allowed $18,500 per year into a 401k plan at an average return of 6% annually, after 24 years I've got over $1M.



Now this is definitely something we can agree on
Let me put this terms you might understand. I studied photogrammetry and business in school. I am no stranger to math. No one I know gives 18k a year to these theives. And I would never wait 24 years for that to materialize. Your compound interest goes away too if it's reinvested in the same funds.
My point is that I have no intention of ever contributing into a system that is deliberately controlling markets for their own gain, while not giving a shit about my contributions. What's the benefit of being a good investor and contributing only to see it vaporize to half its value just when you need it? Some people will make out riding the coat tails of rich and powerful. Most won't. I am just not interested in giving them the opportunity. You can, the OP can too. I don't care. I know I am done with those people.
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Old 09-15-2016, 04:13 PM #28
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Let me put this terms you might understand. I studied photogrammetry and business in school. I am no stranger to math. No one I know gives 18k a year to these theives. And I would never wait 24 years for that to materialize. Your compound interest goes away too if it's reinvested in the same funds.
My point is that I have no intention of ever contributing into a system that is deliberately controlling markets for their own gain, while not giving a shit about my contributions. What's the benefit of being a good investor and contributing only to see it vaporize to half its value just when you need it? Some people will make out riding the coat tails of rich and powerful. Most won't. I am just not interested in giving them the opportunity. You can, the OP can too. I don't care. I know I am done with those people.
Thats a very interesting strategy, and you're kind of wrong in any case (per boglehead proven investement methods).

you can do it your way and it may work for you. but most of us don't want to play the real estate market with our whole pension, which can be just as volatile or more so.

OP asked for beginner advice and i think real estate is not for beginners, you may disagree and so may he, but thats where we all do something different.

i think diversification is where you missed out. also you, and you alone select the funds that you populate your IRA and even your 401k with, so if you chose wrong you should have mixed it up and tried again, but not too often as you are in it for the long run in an IRA, HSA, and 401k.

Thats what you may be missing is the ability to play the long game. Its proven. And yes so is real estate and the stock market if you play it right, its just harder IMO, YMMV.

Basically you putting on your tinfoil blindfold and earmuffs to the other methods doesn't make them wrong or bad, it just makes it not for you. Just like your methods arent for me.
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Old 09-15-2016, 04:23 PM #29
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What are you people arguing with each others. We all need beginners to take their money in fair trades.
Let them be, we welcome all money to the pit.
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Old 09-15-2016, 09:47 PM #30
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And I would never wait 24 years for that to materialize. Your compound interest goes away too if it's reinvested in the same funds.
I really don't follow you here. 24 years is a completely realistic time frame when discussing a retirement savings plan. Even 30 years is totally acceptable, especially when getting started early in life such as in your 20s. I also don't get what you mean by compound interest going away.

All OP needs to do is invest in a highly diversified ETF or mutual fund through something like Betterment or Vanguard. The fees are very low. Let the market take care of the rest.
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