Investing question. Please read those who know their stuff.

[slickdadd]

Ok, so heres the thing. I know nothing about investing. I'm curious what would be a good move to invest parts of my measely paycheck that could help me out in the future. Seeing as im only 20, i don't have the greatest history of experience with money yet. I'm looking to put away maybe 100 dollars of each paycheck towards an investment, or at least im thinking that sounds good at the moment. What "investments" should i invest that money in. CD's? Bonds? Mutual Funds? I'm not interested in risking my money in anyway such as with the stock market, at least not at this point. Nor do i really know how any of the earlier mentioned investments work exactly, so im basically just wanting some opinions on the matter or experience. Thanks

 

[smallmovesal]

i say high risk mutuals for at least part of the money. in the long term (i assume you're leaving it for decades until you retire) it will give a higher return. that's what i did with $500 earlier this year.

i have superannuation that's locked-in right now and i won't see it until i retire. i've only gone moderate risk with this one, but at this rate, it will give me quite a bit of money (or with inflation rates as they are, maybe it'll buy me a bag of chips when i see it finally).

the deal is that the younger you are when you start, the longer it has to accrue and the more you will have when you are retired. you are the perfect age for this right now, so i definitely encourage you to start investing it now. just don't take the money out until it matures.

hope this helps.

 

[HappyScrappy]

the common thing I've read is that you should put it into a mutual fund and since you are young the compounding interest will be nice in the long run.
and the technique you are talking about is cool - dollar cost averaging.
find a good mutual fund - or even just an index fund and then setup the money to be automatically put in, and then don't look at it for 30 years or so or it will just drive you nuts when it goes up and down.

that said, I lost about $30K on penny stocks last year, so I'm pretty gun shy. I was up a lot and then the crash... oh well, can't win them all.

 

[Warik]

Variable life insurance.

-Mike

 

[May1010]

SlickDad,

You're only 20 and you're a dad? Please explain.

As for your question, do you work full-time? If you do, does your employer offer a 401-K? If so, that's a great place to start. Typically, there are several plans to choose to participate in, from the very conservative to the very risky.

If you're able to save $100 per month starting now, you'll be very well off.

You might also want to think about an IRA account.

Hope that helps,
May1010

 

[slickdadd]

Well apparently i do have a 401k, but im not too sure how that affects me. Mainly my goal isnt necessarily "retirement" savings per say, but money to have once im buying my dream house for example. Just an investment to pay off down the road, but not 40 years down the road, although that is a possibility as well. Mainly curious about investments to help me out in the short term compared to long term or retirement, but somewhat in retirement as well. Just any tips. Appreciate the ideas guys.

 

[May1010]

Ah, now I understand your goals a bit better ...


I suggest that you invest in a mutual fund. You might want to take a look at Fidelity's Magellan Fund. It used to be managed by Peter Drucker, I'm not sure about that anymore though. Magellan has continously provided an excellent return on investment. But, alas, as with any investment, Magellan is a risk.

Go to your nearest Charles Schwab office and chat with one of their advisors.

Best of luck to you.

 

[slickdadd]

So mutual funds is the way to go. Appreciate it.

 

[Badkins21]

Information is the key. Check out www.fool.com , www.fortune.com , www.forbes.com , www.yahoo.com/finance , www.datek.com , www.nasdaq.com , www.cnbc.wsj.com , and any other site you can find, but make sure they aren't selling anything (Datek is a broker, but it has a lot of good information)...

First off, know that the more risk you take, the more money you CAN make...I've pushed over $3K into the stock market over the last few months (I'm 20 also), and will continue through the summer, however I don't expect to make any money for another 6, 8, or even 12 months or more.

You've picked a wonderful time to invest, as no one knows what the hell's going on...We're not in a recession, but we kind of...should be? All the information is bleak, yet we've made progress over the last few months...The market is extremely VOLATILE right now...

The $100/month idea is a good one, but it's be wise to start with at least $1K if you're going to buy a CD. I'd stay away from bonds until you're older. As far as mutual funds, you're going to have to do your own research, since there are about 40,000 of them today. Find a research site and use their tools to narrow down your options. I'd stick with one from a big name, like Fidelity, JP Morgan, Scwab, etc.

Some solid stocks that are trading at horrible lows right now are Cisco, Dell, Palm, Yahoo, etc., and a few biotech's like Abgenix, Lexicon, and Geron...those are the future...

 

[ironman65]

The FIRST PLACE you must look into is your 401k plan that you said your employer offers. The reason is that the money you put into is not taxed yet. Let's say you put $100.00 a month away, that does not get taxed and also lowers the amount on which you are taxed. n addition to that many employers have a matching contribution thay add to this. You need to ask your employer what they do. Some employers do 25% of what you put in. That means you would get $25.00 a month added to this. There is a catch though. You are not eligible to receive this money if you are not vested. Depending on your employer, they have a vesting schedule. It could be you are eligible in 20% increments per year. Meaning, you would have to have five years with this company before you would recieve the full 100% vested money from the company.

Another question to ask is if your company allows you to take a "loan" against your own money to purchase a house. That is up to the administator of your companys plan. Inside of the 401k plan you will have a variety of choices generally. Mutual funds of all risk levels from moderate to agressive growth. They will give you profiles of each fund and show you what the fund has done in the past. They will also likely have bond funds, and other investment tools. The maximum amount you can put in per year has just been raised to $10600.00 per year. Anyway, this by far is your best bet. Next on the list would be IRA accounts. I think this gives you enough info to get started. Be careful. I would recommend agressive growth for the long haul, but you may want to diversify a little since you are looking to use the money sooner than later. There is much more to it, but that is an overview. Hope this is easy to understand.

ironman65