Investing

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perro

Veteran XV
I have been reading quite a lot about investing for the future. My parents have done shitall planning for their own retirements, and I don't want to be in the same boat. I have a 401k that is getting decent returns, but I'm young and I want to invest more of my income in something higher risk that offers more returns.

What websites/forums should I be reading to get started with stocks? I don't have any delusions about becoming a day trader, but I would like some resources for longer term stock trading.
 
get a mutual fund
get a roth IRA over a 401k if you're young and think you'll be making more by the time you retire
after you get these things in place along with a basic savings account, start adding stocks to your savings portfolio to round it out and give you the higher risk/reward returns
 
true
once you max your roth ira, you can decide on 401k or stocks depending on what you're feeling
 
My 401k through work is a mutual fund and from what I can tell its getting respectable returns. I'm not against upping my contribution, but my work automatically matches 6.45% regardless of my contribution so nothing is pulling me toward that. I've looked into roth IRAs but I'm getting a better return and tax benefits out of my 401k.

I've been looking into the savings account thing, but haven't found any definitive info on where to start one with good returns. My current savings account is through chase and gets shit interest, but transferring money is simple and instant. I have actually been trying to find a rewards debit account in my area that offers 5%+ but havent found a CU yet that has one. Honestly not sure where to go from here on this issue.

I'm mostly looking for info on how to invest in the next microsoft or walmart (in a sense) and how to manage the investment over the long term.
 
perro said:
My 401k through work is a mutual fund and from what I can tell its getting respectable returns. I'm not against upping my contribution, but my work automatically matches 6.45% regardless of my contribution so nothing is pulling me toward that. I've looked into roth IRAs but I'm getting a better return and tax benefits out of my 401k.
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IRAs and 401ks give essentailly exactly the same tax benefits

IRAs allow you to choose what fund you want to invest in, while with 401ks you are limited to what your employer offers. 401ks have higher allowable contribution limits and you should always take full advantage of employer matching
 
ScottTheWise13 said:
IRAs and 401ks give essentailly exactly the same tax benefits

IRAs allow you to choose what fund you want to invest in, while with 401ks you are limited to what your employer offers. 401ks have higher allowable contribution limits and you should always take full advantage of employer matching
Click to expand...

This.

So are you saying that your employer contributes 6.45% of your salary into your 401k, regardless of what you put in? That would surprise me. Typically, they will match something like 50% of everything you put in, up to a max of 6ish % of your salary. So if you contribute nothing, they contribute nothing. You kick in $5k, they put in $2500. If you contribute $10k, but only make $60k salary, your employer match is capped at $3600 (60k * 6%) so that's what they put in.

I would triple check that before you start looking elsewhere, because if you aren't taking advantage of the full employer match, you're just passing up free money.
 
check out earth2tech.com
talks about up and coming companies in the green energies field or related items of that interest

pick up magazines on fields that interest you and you think could perform well in coming years (tech firms, retailers, fancy clothes, whatever) and read up and broaden your knowledge of said industry

if you make 40k right now, you put the money in a roth ira at x tax bracket (we'll call it 20%). When you withdraw at 60 in 30 years say, and you make 100k a year, you arent taxed. With the 401k, you'd be taxed at your now 100k a year salary bracket, say 40%
 
ScottTheWise13 said:
IRAs and 401ks give essentailly exactly the same tax benefits

IRAs allow you to choose what fund you want to invest in, while with 401ks you are limited to what your employer offers. 401ks have higher allowable contribution limits and you should always take full advantage of employer matching
Click to expand...

This. You can contribute $5k per year to an IRA, and $16,500 to a 401k. Something to note though, is that the tax benefits of the IRA phase out pretty quickly, i.e. you don't get a deduction for them above a certain income level. That doesn't apply to the 401k - you contribute that tax free regardless of your income.

So are you saying that your employer contributes 6.45% of your salary into your 401k, regardless of what you put in? That would surprise me. Typically, they will match something like 50% of everything you put in, up to a max of 6ish % of your salary. So if you contribute nothing, they contribute nothing. You kick in $5k, they put in $2500. If you contribute $10k, but only make $60k salary, your employer match is capped at $3600 (60k * 6%) so that's what they put in.

I would triple check that before you start looking elsewhere, because if you aren't taking advantage of the full employer match, you're just passing up free money.
 
my company contributes an amount equal to 6.45% of my salary pretax/ss/etc without me contributing a dime. yes, it's awesome. I currently contribute 4% voluntarily to make my total contribution 10.45% I make just a bit under $40,000 at this job, so the annual contribution is roughly $4,000. So far my return in this fund has been nearly 40% after fees (which are negligible), but I happened to invest right at the bottom of a dip. The lifetime of the fund is a little over 13%. I am definitely happy with this fund and the 401k situation as a whole and I know the return (short and long term) is nothing to scoff at.

I can afford to put another $4,000 or so into some other long term investment, and $4,000 into savings. I'd like this money to do the most work for me in the long term. Would upping my contribution (maxed at 10% or so) and contributing the rest to a roth really be the best idea right now? Like I said I'm young and Im not risk adverse atm.
 
Whatever you do, just don't give your money to a financial planning company like Ameriprise or similar companies. You're basically paying someone who is not rich themselves to try and make you rich, which is a bit illogical if you think about it.

The safest bet IMO if you're not financially literate or don't know much about investing and want something besides your employer-backed penchant fund is to pick a (relatively) safe and cheap mutual fund like fidelity or vanguard and put your money in a S&P500 index fund that they offer and either make monthly contributions or just leave it alone.
 
is now a good time to start pumping money in? It seems like things can pretty much only go up form here...amirite?
 
If it's long term then it's not a big issue. The stock market has always historically risen over time. Recessions have generally just temporary lulls. By long term I'm assuming you mean like at least 10+ years.

If you want this money back in like a year just do a high yield CD (like from ally bank) or something and forget about it if you don't know much about investing.
 
perro said:
my company contributes an amount equal to 6.45% of my salary pretax/ss/etc without me contributing a dime. yes, it's awesome. I currently contribute 4% voluntarily to make my total contribution 10.45% I make just a bit under $40,000 at this job, so the annual contribution is roughly $4,000. So far my return in this fund has been nearly 40% after fees (which are negligible), but I happened to invest right at the bottom of a dip. The lifetime of the fund is a little over 13%. I am definitely happy with this fund and the 401k situation as a whole and I know the return (short and long term) is nothing to scoff at.

I can afford to put another $4,000 or so into some other long term investment, and $4,000 into savings. I'd like this money to do the most work for me in the long term. Would upping my contribution (maxed at 10% or so) and contributing the rest to a roth really be the best idea right now? Like I said I'm young and Im not risk adverse atm.
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Honestly, for your situation I'd say open a Vanguard account. They have a variety of funds with the best combination of good returns / low costs. You can pick funds based on your risk tolerance, rather than trying to pick specific investments that would require a lot of knowledge that you don't have. I've been with them for years and can't recommend them highly enough.

Also, you mention "the fund" - which implies to me that you have all of your 401k money in one fund. I'd switch that up asap, spread out amongst maybe three. It's good that you benefited from the timing of getting in on a dip, but you might as well bank that by diversifying a bit and avoiding a correction.

Edit: Specifically check out the Tax-Managed Small-Cap Fund - over the next decade that's where your biggest growth sector is going to be as the economy starts to bounce back. It's the small - medium size businesses that drive the 30%+ gains.
 
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I don't plan to invest or do anything for my retirement because I'm going to have like tens of millions of dollars.

When I want to 'retire' I'll just sell off my company, stay on the board of directors or something and build a new house on a beach somewhere while fucking my supermodel wife.
 
If you are investing for retirement, definitely max out IRA and 401k before you put money into other market accounts. The return just from tax benefits is great.

For just a liquid savings account, you can probably find a good local credit union or high yield online bank to dump short term money into.
 
sweet 401k option dude
how old are you?
I've got a mutual fund roth ira from barclay (offered by statefarm) called a lifepath fund. Mine is the 2040 range which means they invest it all into high risk stuff now, and as i approach 2040, scale it back into safer territory. Dont have to really think about it much which i like. I max that out every year. 401k i put in another 2000 a year, not much. Then i research firms and areas of industry and invest a thousand dollars in a company that looks to be promising in the medium term. I think i have 5k in stocks i picked.
but that took a few months to fully get a grasp on

right now, max out your roth ira for the tax bracket break if you think you'll be making more money later in life
401k is great as well for an residuals
 
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