Monday, March 10, 2014

Investing Ira'S For Dummies!! Ha Ha

Hello all,
I am 26 married male. I am currently looking into investing. First I wanna start and IRA account. Now I have one at work but I have yet to start it. My company matches up to 300 a month I think. I plan on contributing 1200 a year or 100/month. What I want to know is what should I do, start one w/ my employer or should I start one w/ an online broker like Etrade, Ameritrade, ETC??? Eventually I wanna look deeper into stocks once I learn more about this sort of stuff. I just bought 3 books and I am getting a lot of advice my my coworkers, which some are doctors that I have asked and well I can't be spending near what they are everyday!! HA HA I have been reading and doing research on the internet but there is a lot to learn I know. I was looking at the Roth IRA vs. Traditional IRA! That to me was confusing enough. Anyone w/ info that would like to help feel free to respond. THANKS

First thing is to take advantage of the EMPLOYER program, 401k, 403b or whatever depending on the TYPE of employer. They'll match up to $300/month, so by NOT being in that you are GIVING AWAY as much as $3,660 PER YEAR! No one can afford to leave that much money on the table.
My rule of thumb is to (1) take advantage of employer programs up to the maximum of the employer match, (2) Roth IRA, (3) employer program up to the maximum allowable, (4) any more investable funds into regular IRAs.
Educate yourself to the point that you'll be buying no load mutual funds. FORGET about individual stocks, you don't have enough money for that, yet. Just buy the stock mutual funds. To eliminate individual stock risk you'd have to own at least 20-25 individual stocks, or the equivalent of TWO YEAR'S salary. Sure you might get lucky and buy a MICROSOFT, but you'd be more likely to buy an ENRON, LUCENT or something similar.
In your mutual funds divide your money into:
Aggressive Growth
Small Cap
TIME is your greatest friend, also your greatest enemy. Invest the MAXIMUM you can afford. DON'T buy frivolous things like NEW cars, expensive stereos, extra doo dads on your phone service etc. Learn to live on 80% of your income and INVEST the rest.
The BEST BOOK I can recommend is The Millionaire Next Door, your library should have it, or it's available in paperback. Read it, learn it, live it. Best financial book ever written, if people would just learn to live it.

Thanks. Well I found out that my employer matches only 300 a yr!!!!!!! 300 is 300 but cmon!!! Anyway thanks for the advice. I am going to be starting the one here very soon. The whole financial thing w/ us is wife and I moved out of our parents house pretty quick on a wim so to speak. Used credit cards to get going w/ normal apartment stuff. Then I started my little car project, you know young kids and thier souped up cars!! Well I was one of them. Don't regret it for one min though b/c I have learned so much about car work and normal maintenance. So we still have around 5k in cc debt. I am currently try to work on that but also just bought a house in Oct and was doing lots of work to that. Well I will look into that book though for sure!! I hate reading but will force myself to read it!! Thanks again!!

And that is what i did. I put $1500 into Lucent. Wha Wha Wha. GONE!!!

Tags: investing, mutual funds, individual stocks, just bought, should start, take advantage, work that, your greatest