Good Investments Vol. $5,ooo (Goal orientated need to read)

Originally Posted by LazyJ10

Don't mistake tax free - you're paying the taxes up front, that's all.
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The end sum, the reward, isnt tho. Good point tho
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I look at this like the lottery, but no matter what i am gonna win
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My moms side of the family plays the lottery and scratch offs and casinos all the time, and throw so much money away... if they woulda invested it in a Rothor anything simialr, i can only imagine how much they would have earned
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Originally Posted by koolbarbone

Dirty,

According to this article, it seems like they are saying you should invest consistently with a Roth IRA rather than invest a big sum and just let it sit.

http://www.moneychimp.com/articles/rothira/rothcontribs.htm
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I didn't even click the link...but of course continually investing in it is the better move... take a look at my initial reply. --
I gave three scenarios: 1. let it sit and do nothing. 2. add 1K every year 3 add 1500 every year.

if you notice, adding the 1500K yielded 1.5M at the age of 65....imagine now he put 2K or 3K?.....the adjusted numbers are 1.8M and 2.4M respectively.. Myadvice was b/c he had 5K and wanted and "investment for a lifetime"...also...starting early...gives him the incentive to keep adding and adding everyyear.

Don't mistake tax free - you're paying the taxes up front, that's all.
sorry...that's true...but I'm sure most people would prefer to pay the taxes now...vs. later when they're taking disbursements basedon their income level when they do
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I think it depends on your company's policy to tell you the truth.

Some companys will match your 401k contribution by 1 to 1 ... some might to 1 to .5 and some wont even contribute anything


i am pretty sure... someone else confirm this?
 
Yes, every company has a different version.

My firm matches up to 3%, and is fully vested after 5 years. Why? Because turnover in the first couple of years is high and they view it as an incentive.

My gf's firm matches more and its fully vested after the first year.
 
I'm sorry, but I don't see the logic in putting money in these saving accounts or whatever, and only getting a 9% interest rate per year, even thoughit's compounded. The only good part is you don't have to any work. If you have a few Gs you don't know what to do with, you mind as well run asmall ebay business on the side and make more just by spending like 1 hour per night.
 
I'm sorry, but ONLY 9%?? 9% isn't anything to bash an eye at.

What are returns like on Ebay?
Don't you think if you were getting 15% back more people would do it? Then it would drive those returns down, whereas, it would be the opposite in afinancial market situation.
 
Originally Posted by NikeFlightposite

I'm sorry, but I don't see the logic in putting money in these saving accounts or whatever, and only getting a 9% interest rate per year, even though it's compounded. The only good part is you don't have to any work. If you have a few Gs you don't know what to do with, you mind as well run a small ebay business on the side and make more just by spending like 1 hour per night.
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Roths are a Steady Stream thats made to build up over time, and are looked at as purely saving and aimed at retirement funds.....

Einstein said a few things about compound interest.
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I am thinking about a small ebay business, but things to sell, and what not... minus ebay and paypal fees makes me want to
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If you have some good tips on ebay store, feel free to PM me, As i currently search for my Ebay guru
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i might open a roth ira, sounds pretty good to me. 9% compounded interest. i could put up 5k. let it sit and do nothing.

i will still have enough money on the side to support my ebay hustle.

at first, i was just thinking online savings. i currently have a cd.

i'm just worried whether this would effect my financial aid for college.
 
As I understand it, once you set up a Roth IRA you have to pick stocks, bonds, CDs, funds to invest it. Is there any "wrong" funds to invest in? Anyparticularly good ones? One person mentioned Vanguard as a good place to set one up, but I have heard some negative things about the investment options inVanguard. Any truth to that?
 
every1 is diffent, i work int the buisness, and you would be suprised, there are nearly retired men who gamble in penny stocks and think they are investing.on the other hand you have some younger people who have the time to take a more agressive approach but are so afraid of the market that they miss out on plentyof oppertunity.

from my point, making money in the market requires dicipline, i mean think about how many people owned apple at 100-150 who didnt sell when the stock was at200, who didnt write options or use a stop loss order, why because everyone on tv told them the stock was on automatic pilot to the moon. the same analysts arenow on tv saying they wouldnt touch the stock now that its at 130. People get greedy and feel they are the best stock pickers in the world, thats when theylose $. there are so many ways to protect yourself and still make $, you just have to know what you are talking about.
 
WHY DON'T YOU GOT TALK TO REAL PROFESSIONAL?????




Not saying that they would tell you anything different but it's their job to
explain it to you. It's better than listening to a bunch of wise men on the
computer. Whatever...
 
The one thing about Roth IRA's though is that I dont think they will be tax free by the time most of us retire.


Dirty its a difference in investing styles. 5000 is chump change in terms of investing so any type of fund would be best for him, anyway whether it be aretirement account, mutual fund or ETF.
 
Keep in mind to put 5k (I thought the limt was 4k) into a Roth you have to have had 5k taxable income for the fiscal year. If youve been working in a shoestore for two months you dont have that. You can only put in as much as you have made for the year. I wouldn't put the 5k in all at once. What I would dois get two mutual funds, put in the 1000 minimum if they have that, and dollar cost average. That just means have money deducted from your checking accountevery month (lets say $100 bucks). The purpose of that is if the markets go down more, you will be in at a lower average price, if they go up that is fine toosince you are just adding that gravy. I've got plently of recommendations since I work in fund research if anyone wants.
 
Yeah listen to those guys that tell you to start saving up early. The power of compounding will help you out. Granted I need some finance lessons myself. Ifanyone care to answer, is it good to buy bonds? Idk much bout bonds and stocks, I know that bonds you get interest payments semi-annually and for the timeperiod its issued for, and of course you get your initial investment back. I know stocks, the dividend declration is up to the corporation, and they're notobligated to issue them every year. But factor in that market value is diff for shares and you basically make money by selling your shares right? So for rightnow, I'm 19, should I start out with little bonds? I don't want to mess with stocks as I don't have enough funds to do so, and I don't knowwhat I'm doing lol. But yeah anyone care to give me an input?
 
Originally Posted by shch

Is a Roth IRA better than your employer's 401k retirement plan??
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although similar..they are different. 401k's are funded by pre-tax dollars, thus you decrease your tax bracket, while investing for your retirement. When you withdraw, you will get taxed.

Roth IRA are funded by after tax dollars...when you withdraw, you do not get taxed

In essence...the growth in your 401k is taxed...the growth in your Roth is tax free.
Originally Posted by LazyJ10

Yes, every company has a different version.

My firm matches up to 3%, and is fully vested after 5 years. Why? Because turnover in the first couple of years is high and they view it as an incentive.

My gf's firm matches more and its fully vested after the first year.
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Indeed. Even if you have a Roth, never throw away free money...if your company matches...by all means...contribute
Originally Posted by koolbarbone

As I understand it, once you set up a Roth IRA you have to pick stocks, bonds, CDs, funds to invest it. Is there any "wrong" funds to invest in? Any particularly good ones? One person mentioned Vanguard as a good place to set one up, but I have heard some negative things about the investment options in Vanguard. Any truth to that?
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yeah.. you have to pick the funds you want to invest in. if you're worried about picking the "wrong" fund... just park it in an indexfund.

I like Vanguard...but like any company...they have good and bad funds....you just have to do your homework.
Originally Posted by JordanFiend85

The one thing about Roth IRA's though is that I dont think they will be tax free by the time most of us retire.


Dirty its a difference in investing styles. 5000 is chump change in terms of investing so any type of fund would be best for him, anyway whether it be a retirement account, mutual fund or ETF.
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How do you figure they won't be tax free?...I definitely don't think that at all... in fact...I'm willing to bet they're going to increasethe salary cap.
yeah...it's a difference in investing styles 5K is chump change for sure...that's why he should park it... you don't play themarket with chump change... and like I mentioned above... the growth in a Roth is tax free...while Mutual funds and ETFs are not.
 
Dont put it in the bank because Now A days dudes aint living pass 50 so just do you because dirty made a wish on the dragonballs 100 years ago
 
As I understand it, once you set up a Roth IRA you have to pick stocks, bonds, CDs, funds to invest it. Is there any "wrong" funds to invest in? Any particularly good ones? One person mentioned Vanguard as a good place to set one up, but I have heard some negative things about the investment options in Vanguard. Any truth to that?
Vanguard is the king of low-cost funds. The only thing I don't like is that they have a $3000 minimum investment on most of their funds. Theyhave one fund, Vanguard Star (VGSTX), that has a $1000 minimum invesment.

I don't know old you are, but I'm assuming 20's to 30's. If you're new to investing I would suggest one of two things. A. Invest in indexfunds or B. Invest in a Target Retirement Fund. With a smaller amount (less than $10k), I would just park it in a Target Retirement fund for now. The reasonbeing Vanguard (most other mutual fund comapnies/brokerages) will charge you a maintenance fee for smaller balances. The limit varies so you might want tocheck first.

Once you've accumulated more than $10k, then you can exchange it for a combination of index and/or actively-managed funds. Some people swear by index fundswhile others think active-management is the way to go. But that's another topic altogether. On the other hand, you can just leave it in the TargetRetirement fund. The asset allocation becomes more conservative as you get closer to retirement. These funds may start out at 90% stocks and 10% bonds/cashequivalents and gradually adjust until it's 60% stocks and 40% bonds/cash equivalents. These are essentially "set-it-and-forget-it" investments.
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I have to agree w/ if you're young go aggressive. With that millionaire by 65 stuff, you're assuming 10% return on your entire portfolio every year.Not unless you're in just the "right" funds that will rarely happen.

I also doubt most people allocate their entire portfolio into mutual funds, that wouldn't be too smart. Don't get me wrong though a Roth IRA is abeautiful thing, but don't get your hopes up.

I turned 20 a couple months ago and I was thinking about opening a Roth. But whats the point, when I don't need the money anytime soon and many of my stocktrades have done pretty well. In late 07' I got an 70% return on part of my portfolio I was using for 3-7 day in and out trades during earnings season, soyou can definitely see why my opinion is the way it is.

I'm not having exactly the same fortune in 08' but my last 4 trades were profitable, time for a comeback.

If you're young and can accept risk, read a few books, learn the market, you won't be disappointed.
 
you're assuming 10% return on your entire portfolio every year. Not unless you're in just the "right" funds that will rarely happen.
I can assume this b/c if you use an index fund...you can assume this. year to year....that may change..but over a 10-20-30 yr period... 10% growthcan be easily assumed

I got an 70% return on part of my portfolio I was using for 3-7 day in and out trades during earnings season
so then that's probably a 30% return after you factor in Cap Gains... not worth it in my book.

I don't deny your strategy... I just like my growth tax free and un-risky
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Thing is most people aren't going to be as active as you, unless you're in the profession yourself. And judging by NT, its safe most won't wind upin the financial sector.

With that being said, allocating 80% funds, 15% stock and 5% bonds is a good mix for someone who isn't going to be as hands on.
A well managed fund, during the correct conditions, SHOULD see 10%+. That's the whole point of having actively managed funds.

It's YOUR responsibility to make sure you allocate those funds within different sectors and mixes to help your OVERALL return to be better than average.

When you don't need the money right away, that's the BEST type of investment.
Like I said earlier in this thread, nothing wrong with looking toward to future. Maybe it'll take you guys some time before you realize it, buthistorically, data tells me the EARLIER you invest (regardless of its use) the higher the return.

Some people just think too much about the now and not the future, I plan on retiring by 55 and have saved accordingly. If working is something you want to do,by all means knock yourself out. I would prefer not to.
 
Dirty,

I can assume this b/c if you use an index fund...you can assume this. year to year....that may change..but over a 10-20-30 yr period... 10% growth can be easily assumed
What index funds are you currently invested in? S&P 500? Total Stock Market? Are you with Vanguard, T. Rowe Price, Fidelity, etc? I'mcurrently investing in an S&P 500 index fund in a taxable account at T. Rowe Price (also have my Roth IRA there). But I'm thinking about exchanging andgoing with a Total Stock/Equity Market index fund instead. Not sure if it will make a difference over 20 or 30 years though, as far as returns go. I justdon't want to miss out on small and mid-caps I guess.
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