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  1. #1
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    The Stock Market, IRA retirement savings, etc...

    I *FINALLY* saved some money! About $2,000 bucks!

    I was originally going to buy a new computer and go on a vacation, but I realized, "I'm fuckin 25 years old! I own no property. Have no life insurance or retirement funds. I should start thinking about this shit!"

    Then, something wild came to me. I'm going to invest $1,000 in the stock market, and put away $1,000 for an IRA retirement fund.

    The only problem is, I don't know jack shit about the stock market or a retirement fund, I sure as heck ain't gonna hire a consultant who's gonna charge me $500 bucks!

    I am not looking to make quick buck on the stock market. I know to really make money on the stock market, it's best to invest long-term. So I'm thinking of bio-technology and aqua farming companies.

    Do any of you guys know about this stuff? I'm going to start reading books on this.


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  3. #2
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    Roth IRA--you put in after-tax dollars, it grows tax-free, and at retirement you withdraw the money tax free.

    I wouldn't suggest picking stocks yourself ('cause you're not an expert, just like the rest of us). With an IRA or Roth IRA, you usually can designate whether you want it to be agressive, moderately agressive, moderately conservative, conservative, etc. They do the rest for you.

    Otherwise you can get a mutual fund that targets the kind of stocks you like or that tracks an index. The company manages it for you.

    These options give you the advantage of being well-diversified. If you try to pick the stocks yourself, you usually only pick a (relatively) small number of companies. If the company or that area of the economy tanks, you go down with it. If you're invested in several hundred companys through an IRA, Roth IRA, or mutual fund, your risk is considerably less.

    emily
    *disclaimer: not an expert, don't sue me

  4. #3
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    Well at least you have sense enough to spend that money wisely instead of using it somewhat unwisely on new toys.....like I do.
    -Call me Semaj for short.

  5. #4
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    blow it on blunts, 40s and bitches

  6. #5
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    wow, thanks Emily G!

    Now I have an idea of where to start.

    I am weary about putting my 1,000 that I want to use to start a retirement savings into the stock market. I'd rather put it in something stable and more secure, like a bank account, that'll add a percentage of the account as interest into it. That way, I'm thinking I could put 1,000 now, and 1,000 every year until for the next 45 years.

    If the interest rate is even just 2%, that account would have grown to about 500,000 by the time I retire.

    Thanks for the mutual funds idea too. I'll pretty much have to hire some sort of stock-broker or financial advisor who can teach me more and knows how to best invest my money. I think I'll wait a few more months so I can invest 2,000.

    I still would like to start a retirement savings right away though.

    Quote Originally Posted by endregan
    blow it on blunts, 40s and bitches
    I did that shit in college and wasted a lot of money to kill a lot of brain cells. Biggest waste of money ever.

    Does anyone here have stock? How does that stuff work? Where would I even begin?

    Thanks!
    Last edited by CaptainInsano; August 19th, 2005 at 08:49 PM.

  7. #6
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    id save for a condo or house
    Nathan Campbells 3 steps to drawing like a pro, 1. Sketch 2. shade. 3. highlights and ur done

  8. #7
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    blow it on blunts, 40s and bitches!



  9. #8
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    Quote Originally Posted by gasmask
    id save for a condo or house
    That's what I ultimately would like to do!

    But unfortunately I can barely pay the bills on my own shitty ass studio apartment. I want to make some money off the stock market, and perhaps in 10 years that stock would have grown for me to afford a downpayment on a house. Then I can rent that house out, and the rent will pay for the mortagage. It's like getting a free house, but the thing is to come up with the downpayment.

    Once that's done, buy another house, and etc...

    See, it's like that game monopoly. Owning property is key. And in that book "the good earth." If you own property and houses, you don't have to worry anymore.

    Maybe I should pimp. Prostitution is impervious to the fluctuating stock market It'll always be in demand! Naahh, I wouldn't be a very good pimp. I'm too nice.

  10. #9
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    Quote Originally Posted by ParkerD
    I am weary about putting my 1,000 that I want to use to start a retirement savings into the stock market. I'd rather put it in something stable and more secure, like a bank account, that'll add a percentage of the account as interest into it. That way, I'm thinking I could put 1,000 now, and 1,000 every year until for the next 45 years.

    If the interest rate is even just 2%, that account would have grown to about 500,000 by the time I retire.
    Nothing's wrong with putting money in the bank, but remember that on average inflation grows by 4% each year. This means that your money will actually decrease in value over time by sitting in the bank, so don't rely on this for your long-term investing.

    emily

  11. #10
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    Quote Originally Posted by ParkerD
    If you own property and houses, you don't have to worry anymore.

    haha i'll remind you of that line then

  12. #11
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    Thanks again Emily!

    I'm 25 years old and I'm having a quaterlife crisis. Money has become a growing concern for me.

    As of this point, I only make $1,500 a month (well, $2,200 before taxes) and can barely afford my rent, food, and school tuition. I'm going to animation school, and hopefully that'll lead to a good-paying animation career.

    It's not even money that I care about. I care about marrying my girlfriend having a gorgeous wedding for her that I can pay for. I want to take us to Paris (she always wanted to go to there), and buy us a new car every 5 years. I want my mother to not have to worry about paying for medical bills, and when she wants to go to Las Vegas I can take care of all that. One day I want a boat, and own a nice house... fuck that... i want to own TWO nice houses, with a hammock in the backyard. And when I'm old, I want to pay for my grandkids college educations, send them to art school in Italy.

    In other words...

    I'M TIRED OF BEING A BROKE MUTHA FUCKAH
    Last edited by CaptainInsano; August 19th, 2005 at 09:16 PM.

  13. #12
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    Roth IRA is the way to go. It is tax free each year and the amount that it increases maximum each year increases with inflation. You HAVE to start early when saving. Deciding to save now at 25 is the perfect time, if you wait until you are just 35 or 40 you are losing potentially hundreds of thousands of dollars due to loss of compounding which you can never get back. I would also start investing right away. Don't save $2000 and then go into a fund. Do it now and put a certain amount each week that way you can start the earnings now rather than waiting for it.

    The max for your roth IRA right now is $4000 and it will increase in 2 years I believe. I would invest in it now and make sure you NEVER take the money out until you retire. It is only tax free if you don't take it out before you retire. I'd start with funds for now. Look into no-load funds which have low expense ratios and have no commission fees. Commission based funds kill your profit. I would personally try to get a few funds that cover a range so as to maximize your profits such as an International fund, stock fund, balanced fund, etc. The goal is to reduce risk but maintain high profits and reduce overlap between funds. I would only move to stocks when you learn about the stock market, it is very complex. Perhaps check out www.morningstar.com or www.motleyfool.com for more reading on the nuances.

    There are also target funds now that companies such as Vanguard and T Rowe have started. Basically you find out when you retire and find the fund that matches the date you retire and then they manage the asset allocation for you and change the stock/bond/money ratio based on how close you are to retirement. Not sure how good they are as they are new but they save you the trouble of balancing yourself.

    If you want other spending money or are thinking about needing money in the future for say a house, set up another account such as a money market account, short term bonds, etc rather than a savings account. They are stable and provide higher returns typically. Money market accounts are nice because you can transfer funds out of them to another fund, or write checks from them as well.

    Also it is a good idea to have a rainy day funds set aside, perhaps 3 months worth of expenses so you don't have to dip into your mutual funds, stocks, retirement accounts, etc.

    Good Luck.

  14. #13
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    Holy shit, thanks man! This is very very helpful !!

    I'm not going to do the stock market thing. I'm just going to put the whole 2G's into the Roth account.

    Thanks again fellahs.

  15. #14
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    Good advice, Neil.

    Good choice, ParkerD.


    emily

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    Ouch, $26,400 a year before taxes? I hope you pay off any outstanding debts you have first before you do something like open up any IRA's. A minimum wage income doesn't leave you with much room to manuever if something hits you hard, and if you need to hit the cash in the Roth to cover that emergency it'll hurt. If anything, I'd try and make time to speak to someone at your banking institution about your long term financial goals and see if they can better assist you. Find out if they've got financial planners/advisers, or someone like that. Yea, some of us are going to give you great ideas, but it might be best to take the time out to better understand your own financial situation before you make any moves.

  17. #16
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    Well said. I don't know the minute details of your situation so just take my words as general advice. Debt should be the top priority as goldenavatar just said if you have any. I would definetely put some of that money aside from the start to invest though if you don't have any debt and if you know of any financial planners that can help you, give them a call. Prioritize your spending, debt, and savings. Even small amounts of savings are better than nothing.

  18. #17
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    Quote Originally Posted by goldenavatar
    Ouch, $26,400 a year before taxes? I hope you pay off any outstanding debts you have first before you do something like open up any IRA's. A minimum wage income doesn't leave you with much room to manuever if something hits you hard, and if you need to hit the cash in the Roth to cover that emergency it'll hurt. If anything, I'd try and make time to speak to someone at your banking institution about your long term financial goals and see if they can better assist you. Find out if they've got financial planners/advisers, or someone like that. Yea, some of us are going to give you great ideas, but it might be best to take the time out to better understand your own financial situation before you make any moves.
    I don't make minimum wage. I make $18 bucks an hour.

  19. #18
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    I recommend

    http://www.coffeehouseinvestor.com/

    for a good starting point on learning about investments.

    As a general rule, pay off your debts and credit cards first since they typically have higher interest rates than the returns you would get on almost any investments. Set up a good savings plan and have 3-6 months worth of living expenses in an emergency fund (and don't touch it EXCEPT for emergencies!). Only after these things are accounted for should you think about investments IMO. Roth IRA is a good way to go. I'd also recommend that you diversify your investments so that not all your eggs are in one basket. I'm a big believer in investing in no load Index funds with the more volitile and higher turnover funds in the tax deferred plans (Roth IRA, 401k, etc). Analyze your spending habits and see if you can trim expenses that way.

  20. #19
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    dzu,

    thanks for the input! I'll definately check out that site!

    The money news said I should invest in Microsoft and...beer (?), because the Xbox360, as well as surgical equipment companies (because the rich baby-boomers are retiring and need replacement surgery), superconductors and fiberoptics with Chinese companies. Basically, I think Tech Stocks are pretty safe.
    This is just wrong, but it also said investing in housing companies in Israel is good because all those people got kicked out fo the Gaza strip and will need to find housing (!). Brazilian utility companies and middle-eastern cell phone companies are all emerging.

    Whoa... WHAT the hell did I just write?!

    I'm gonna go draw for a while and think about this later tonight.
    Last edited by CaptainInsano; August 20th, 2005 at 11:58 AM.

  21. #20
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    ParkerD,

    You're welcome. I highly suggest reading up more before investing anything. Keep in mind the stock market has no guarantees of returning ANYTHING to you over the next 10 years. The whole point of the stock market is high reward at a high risk and picking your own stocks just exacerbates that risk even more. Typically, the higher your risk, the longer period of time is necessary to smooth out any bumps or dips. Who is to say that when you're ready to buy your house the market is in a slump? It may also be in a huge bull market. Nobody knows for sure so it's best to use money to invest that you won't need anytime soon so that you dont have a meltdown when you see that the market has dropped by 30% the past 3 years. The point of diversification is to spread your $$ across multiple assests so that when stocks are down, bonds might be on an upswing.

    That's good that you don't have any debt. That in itself puts you a step ahead of most people.

  22. #21
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    Now after all that's been written here, i'm sure you'll do the right thing with your money. I hope you'll make the right decision.









    Blow it all on blunts, 40s and bitches.

  23. #22
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    you can get zero down on a house, if u make 18 an hour u can afford a house, morgages are at an all time low right now
    Nathan Campbells 3 steps to drawing like a pro, 1. Sketch 2. shade. 3. highlights and ur done

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