Thanks thats good to know on #1
The guy was a real fast talker, reminded me of Wolf on Wall Street and I was really unnerved

I just started reading through the PDF. but its going to take me a while, haha

and just because its appropriate
:G-Dub:
haha

SO with that said, rolling over my old 401k to them in the form of a traditional IRA is a good move?
OR should I roll it into my new companies 401k?

I am leaning more toward the new 401, as they pay the fees and stuff, BUT the more choices and the ability to withdraw from the IRA (even though its penalized) is a very attractive "Pro"

I would talk to someone about the IRA before you go too far in thinking that there are "fees" issues associated with it. Most discount brokers will set you up an IRA for free and there are no account maintenance charges. You'll pay some amount in commissions whenever you trade, but there are no annual fees for your average rollover IRA (I'm sure there are exceptions to this where someone is charging account fees, but there are plenty that don't).

In fact, your company's current 401k with its' target date funds will actually cost you more than holding stocks in an IRA. For example, look at the OER (Operating Expense Ratio) on the target date funds you're holding in your 401k. Most likely, the OER is somewhere in the range of 0.60%-1.50%. That means that the returns for each fund are being reduced by the OER (fee the fund company charges to pay the portfolio managers, keep the lights on, etc.) with whatever's leftover being reflected as an increase in the fund's price (aka your return for the year).

That OER is being taken every year, so ~1.00% per year. That's a fee! There is no such thing happening in an IRA, well, unless you buy mutual funds in it. So, yeah, you'll pay some amount in commissions to buy your stocks (or whatever you choose) in the IRA, but you shouldn't have to pay anything additional on an annual basis. You can even buy ETFs in the IRA and sometimes that can be done commission free.

Well Im reading this whole thread, and Gregs post are really getting me excited, haha

the OER on mine is .78%

The investment guy I have been talking to here at my new job says that I should go with Mutual Funds since I am young (31)

and suggested some from Blackrock

specifically these
1) http://www.blackrock.com/investing/p...nal-class-fund

2) http://www.blackrock.com/investing/p...nst-class-fund

3) http://www.blackrock.com/investing/p...nal-class-fund

If that's what you're comfortable with, then go for it. It's good that you're talking to a professional and listening to their advice. However, I would have encouraged you to ask a follow-up question of him, "why are mutual funds better suited for a "young" person of my age?". Then you can hopefully learn from his answer, helping you to become more informed about why you're doing what you're doing, or you can find out if he's feeding you a line of bull.

You and I are the same age, so I get where you're coming from. As a young person, you can afford to have stocks rise and fall quite a few times before you need the money. So the logic of using highly-diversified mutual funds for a young person seems a bit odd. For me, I also utilize commission-free ETFs in a rollover IRA because I know that over the course of 40 years of compounding, not losing out on ~1.0% a year in returns due to expenses can make a real difference in the ending balance.

In Greg terms, I would use the commission-free ETFs to "park" cash if you don't have a stock or other investment you're interested in.

As a reminder: we're not telling you what to do, just telling you what we do or how we think about things so you can learn.

Man, I wish I would have found this thread before I talked to him. I didnt start googling until after I spoke with him, and then I stumbled upon this gem of a thread.

Im curious if he suggested that because I told him I am a more conservative person. That was like the second question he asked me.

I guess the more important thing right now is to get the old 401k rolled over into an IRA, then later on start looking at the commission free ETF that you and Greg are talking about

I would suggest you do absolutely NOTHING until you're done reading....


You're only 31 --- and couple more weeks isn't going to kill you right now. Read thru the thread -- go back and re-read parts you don't quite get... it will start to all come together for you. THEN you can come back here with better questions.

Ditch the fast talking bozo --- if you decide to go with them - call them and ask to work with a different representative. NEVER EVER NEVER EVER work with a fast talker. It's way too important for you!!

Don't get caught up in thinking you need to do this or that. Wait until you understand ALL your options! There are income tax implications if you do it WRONG.... and there are many other considerations that will all greatly affect your decisions now and into the future.

When you get a little more comfortable with all these "terms" --- ask what it would look like to roll your 401K over into a ROTH IRA. This may take an accountant to factor in the taxes... but if I was your age (without knowing another single detail about you or your income level) I'd want my money in a ROTH IRA.

Roth IRA or Roth 401k are fantastic if available to you. I don't really have anything to add that hasn't already been said expect to second the be patient part. I do hope though that someone has mentioned to you that you shouldn't move the old 401k until you have decided on what account to put it in. It must also go directly there meaning under no circumstances should your 401k money come into your hands before going into whatever new retirement account you choose. It must be an institutional transfer or you will get hit with taxes on that 401k money. Good luck. Keeping reading and asking questions.

Apple (aapl)
 

Rather than just add to the post count here - repeating what's been said in the last 400 pages over and over again... I've been holding back waiting for "events" in the market that would be NEW and of possible interest to all of you.

I think the Apple (AAPL) news - both the rise and the fall (yesterday) - and their upcoming events next week give me that opportunity.

Remember that I am never recommending WHAT to do or what to buy or sell. That's not this thread. I just want to use this as an example of a way to THINK.

Here we have a watershed moment which comes along every once in awhile in the market. You have a company that is just kicking butt... The stock recently split 7 for 1 - thus making it more affordable... so I would ASSume that is a good thing. You have a company that makes a TON of money... and is constantly in the news. Mostly all speculative and favorable.

And here's the INVESTING 102 info:

Let's ASSume for a minute that we're holding the name. We know there's a big product launch coming. We know we're going into the 4th quarter - and in RETAIL that's "everything". And all of a sudden the stock gives us a "buying opportunity" (meaning the stock DROPS). What to do?? Do we add to our positions?? Is the stock suddenly "broken"? Should we average down? Should we get in if we're not already owning?

This IS NOT about this stock - this is about a SITUATION - using this stock as a current example.

I own this particular name (5000 shares). I have a nice gain in the name. I've been in EXACTLY this same situation many times in the past with various other names.

I'd call this situation - standing on the railroad tracks. Why? Because you KNOW there's a train coming. You can jump on the train and get a free ride OR you might get run over. Those are the two things you can count on in the stock market. One is going to make you "the smartest guy in the universe" - the other is going to kill you. EITHER WAY --- it's pure gambling. You're betting that you're smart enough and quick enough to step out of the way - grab the handle and swing yourself on board for that big ride up. But if you're not - and you're timing sucks just a little, you are UNDER that train.

When you have so much "anticipation" that something big is going to happen in a name -- don't think that you're the only guy on the planet that is thinking this way. Remember there are TWO SIDES to every transaction --- and that huge anticipation can bring with it - huge disappointment. Think of the basketball game where there's 1 second on the clock - your guy is inbounding and you MUST make this shot to win... sometimes the player sinks the shot... and sometimes they miss and lose. There's jubilation if he makes it - and much head hanging if he doesn't. It's VERY emotional!!

What I'm trying to say - in too many words - don't get caught up in the hype and just throw you're money in the ring by buying (HOPING) that the big event is going to just make you money hand over fist. Lots of times when the hype outstrips the actual fact - the sellers pour in and take the big event into the trash can with the missed shot! Sometimes the big event is even bigger than the hype and the stocks sails off and leaves you wishing you'd tripled your investment (bet).

So before a guy just goes crazy --- THINK ABOUT HOW THIS INVESTMENT FITS YOUR PLAN. Are you buying because it's a name on your list you just want to own for the long term. And here it has dipped a bit - and now's your chance to buy. FINE. That's a PLAN -- that's not gambling. You've been patient - saved up your cash - you wanted to own the name regardless and here's as good an opportunity as any. BUT please don't be indiscriminate. Never invest (gamble) that you're going to buy and it's going to pop UP. You'll only be disappointed if it doesn't - and that plays on your mind in a very negative way. We have enough things to stew over... let's not have it be our long term investments.

20 years ago I'd have doubled down or tripled down on the "big" drop yesterday.... only to now own 2 or 3 times as many shares and watch them go down even harder after the big "earnings news" or the "big event" (that didn't happen)... or the big whatever. I rode the hype and got my azz handed to me many times. Sometimes I scored huge... most times the little man on Wall Street took me to the woodshed - doing exactly the opposite of what I expected (I was just certain!) to happen.

Don't take little moments in time and get all jacked up about 'em. Take the longer view and be patient. Look at any name and ask yourself if you think LONG TERM this is a company I want to own come hell or high water. If that's the case - fire away! But if you're just thinking that now's the perfect time to score big money quickly. Please don't. You'll be sorry more times than you can imagine.

My impulse yesterday was to be a buyer. It's a great company with great products - it's a company whose products my whole family uses... I already own it... and there's the key. I already own it. If it jumps up I get the ride... if it goes down - I have a good position and I'll just hold. But I'm NOT going to just blindly stand in front of that train....because I just can't sleep well knowing I gambled because I just knew the big event was going to make me money. NO! I'll make money if I already own the name (insert any name).

I'm not talking anyone out of buying anything - and I'm not saying to buy... what I'm saying is to UNDERSTAND WHY YOU'RE BUYING or SELLING and to keep the emotion out of the sale or the buy.

Keep emotions out of it.. good point.. a tough one, but a tried and true one.

Thanks Greg.

Thanks Greg

Im almost halfway done with the thread :headspin:

When I talked to him, I asked if I should consider a Roth IRA. He said no, and I really didnt have anything to challenge back.

Right now things are shifting in my life.

1) I got the new job, where I am earning way more than I used to and now my wife can stay at home

2) We are expecting, baby will be here in December

3) To take the new job we had to move, and currently our house is on sale in a tepid market

4) We have more debt than I am comfortable with, BUT we have a surplus every month. Right now, we only owe on my car, the wife's car and a couple hundred on a no interest jewelery card I got

What I wanted to do is pay off the cars with a snowball, then use that to hit the mortgage on a new house (once ours sells)

We had been doing great prior to buying the house, we had our emergency fund, and were snow balling my wife's old car, but then it got totaled. My paid off car bit the dust a couple months later

In my mind, I should be getting debt free (minus the house) first then start investing (outside of my 401k contributions of course), do you agree?

Thats always been a tough topic. Whether or not to snowball the debt vs retirement.

Dave Ramsey says to attack the debt in full force (everything BUT the mortgage), and do NOT contribute to retirement. It should be a "short time" before you're debt free then hit retirement with a full 15% of your income.

The challenge to that is, what if I'm capable of making 7-12% on my investments/retirement while only paying 3% on my auto loans. I still come ahead 4%.

But, i think its more a comfort feeling myself. I hate payments. I hate owing every month on a car payment. So my feelings tell me to pay the damn car off ASAP. Even if it means i'm losing that 4% possible gain (or whatever it is. you never know).

Personally, we just bought a new to us vehicle. Most expensive thing ive ever bought aside from the house. I've got a 3% interest rate on it. We've got the money to still fund my Roth AND pay the normal note on the car. I'm torn at taking that ROTH money i set aside each month and tack it onto the car payment. But, that makes me nervous. LOL. So, as it sits right now, I'm paying the normal note on the car, stashing the ROTH money in a separate account (but NOT directly into my Roth), so I have wiggle room. If for some reason the market goes south and offers a huge buying opportunity, i have that money ready. If not, I'll let it pile until I can just dump it onto the car and be done with it. No clue if thats the best way to go. But it makes me sleep comfortably at night having that "second emergency fund" just for the car.

I had been using a Dave Ramsey-esque approach. We have our monthly budget, and WERE snowballing, but at the same time I had maxed my 401k

we were doing well, but now with the new job and this old 401k, its pushing me into new areas of finances I have never dealt with before

I hear ya. I'm a "Ramsey-esque" follower too. Some stuff I do his way, some stuff I do my way. lol. Like the whole car payment thing.

Just the fact that you guys are young and thinking about this and doing something about this is very very good for you and your future families. Most people these days just dont pay attention (sorta keep their heads in the sand) and they need to cause ya just cant relie on Uncle Sam 30 years from now.

My brother told me "it's not timing the market, it's time in the market".

We've often discussed the Dave Ramsey approach at work. We're a bunch of engineers that take joy in maximizing everything, including approaching debt (it's a disease). I think most on this site are like minded.

Our conclusion, the Ramsey approach is geared towards people who are inherently not good with money and is a psychological approach to paying off debt. It is not the most effective (in terms of least amount paid) to pay off debt. However, it's a great motivator for people to see the payment go away.

Conclusion (in my mind), you have to make a decision. Are you the kind of person that will benefit from the psychological approach of eliminating individual payments? If so, the Ramsey approach is the one for you.

However, if you understand the principals of debt and that attacking higher interest (after taxes) debts first is more beneficial to your pocketbook, a modified approach is probably a better option. This allows you to take into account that earning 8% in the market on funds that would only offset debt at 3% is an okay thing.

Again, what motivates you as the individual. For me, it's optimizing. Others (like Greg has pointed out), it's the ability to sleep at night being debt free.

Just my $0.02!

thanks for the encouragement, Im just trying to start off on the right foot.

So I finished up reading the entire thread, man that was the most ive ever read on a forum.

And I think I have a plan

1) I drafted an email to the Baird guy, asking him what the base costs of having the IRA with them will be, and what are the costs of the mutual funds he suggested, I also asked him why he suggested not to do a Roth, why he suggested mutual funds

2) my last 401k isnt very big, because my former employer only matched 50% up to 3%, so I was thinking maybe to use half of it to open a Roth, and half in an IRA, that way I would limit my tax liability, but also have that extra bucket of money (with a higher earning potential). I looked and I think Im eligible for one

3) I started writing down the stuff/brands I like and where I shop and started going and looking at their stock. Also I used google finance to "make" a portfolio, as well as a GregWeld portfolio with the stocks he suggested just to compare. I think it would be better than what the Baird guy has suggested.

Finally, a couple questions.

Alot of the earlier posts in here are from 2011-2012. Has anything majorly changed in the financial world that would change some of the theory?

I was thinking maybe to have 1 mutual fund, and then the rest stocks, is that a balanced approach? Or can I achieve the balance with full stocks?

Thanks guys, great thread

So the Baird people called me and were all ready to set up the rollover and IRA and were really pushing the mutual funds

I told them what I learned here that I was thinking that the funds work more for the benefit of the fund managers, and I was thinking more about stocks. They didnt agree.

I also asked about why they suggested mutual funds as a good thing for a younger person

the only thing they could answer was because I didnt have a lot of capital to invest so mutual fund would be better.

Basically my old 401k is 20k, I was looking at GregWelds suggestion (https://lateral-g.net/forums/show...&postcount=380)

I was thinking to do something similiar

suggestions on my thought process?

I'm going to keep my comments limited to a part of your post, but I'm hoping Greg or someone else will comment on the "really pushing" aspect of your experience with Baird.

If your goal/preference is to achieve a high level of diversification with your $20k portfolio, then yes, mutual funds will be good for that.

If your goal/preference is to buy a basket of best-of-breed stocks in various industries to achieve a lower (but still significant) degree of diversification, then stocks will be the better way to go.

This $20k from your prior 401(k) isn't likely to represent the lion's share of your retirement savings. Meaning, it's not the end of the world if you don't get this one right the first time, particularly if you learn something along the way. If you'd like to use it to get your feet wet with trading stocks or other investments, then that's something to consider. You might find out that form of investing isn't for you, but you will have learned something. If you'd rather stick the money in mutual funds and check your balance once per quarter to see how it's doing, that's ok too. Really up to your personal preferences.

Investing is not a one-size-fits-all game, so when I hear a company pushing you toward an option and saying, "that's the best way to go", I have to wonder if they are really listening to you, your ideas and your interests. Keep in mind that you can roll those dollars over to any custodian, it doesn't have to be the one your company uses. These are your dollars/employees!!....Jeff steps down from soapbox...

Great post.

Great points.

I'd be leary of any fast talking pushy people in this scenario. How do these guys get paid? My guess is they take a % off the top.

That's kind of what started my Journey and ended me up in here. I talked to a local rep (that I do some side business/IT consulting for) and he gave me his suggestion. The fee's were like 4% off the top. And the average returns were 7-8%. That got me thinking... I'm only making 8% return, and I'm giving them HALF? Thus i'm only earning 4%? I think I can manage 4% on my own, and anything on top of that is icing on the cake. Talking about this with an old member here (SolarGuy/Mike, hope he's doing OK) and he led me to this thread. At exactly the right time.

I didnt have a huge amount to start with. I couldnt do individual stocks in my 401k, so i basically had to start fresh with a Roth IRA to invest. (I did re-do my 401k after learning here, but I only had certain options to pick from. I just had a better understanding of how/why to pick what i did and not just throwing darts at it).

Am I doing better than the 4%? You betcha. Do i sleep better at night? You betcha. I'm much more comfortable with myself managing my money than relying on someone else who doesnt have my best interest at hand, but just getting their cut of the pie.

Now that doesnt answer about going Stocks Vs Mutual Funds. But, as Greg discussed way back when in the thread you can build your own mutual funds, and NOT have to pay them the fee's. Just make sure you have no more than 5% of your entire nest egg in any one stock. Personally, I bought in $1k increments and am up to about a dozen or so stocks in my own "mini mutual fund". Am I as diversified as a standard mutual fund? No, they're in 50-250 stocks at any given time. But, my best of breed's mini-fund will likely out perform them, as i dont have a bunch of lagging employees pulling my total return down.

On a car, just remember to add the depreciation + finance rate to see what your money will really be worth in the future. That's how I talk myself out of buying a car every time I get tempted by EZ financing.


Anyone down to talk about student loans for a minute? What a crock that government student loans never adjusted with QE and rate-cutting, and banks won't refinance the loans either probably because the Fed won't let them. Fortunately, there are a few private companies popping up that will refinance debts. We are applying to SoFi.com which will cut our average rate from about 7.5% down to hopefully 4%-ish.

I only bring this up because a 4% refi gives us 2 options instead of just 1 at 7.5% (which has been to pay down like banshees):
1) Keep the monthly payments the same to pay down the loan more quickly.
2) Invest the difference in monthly payment into the market.

If you already own a home with equity, I have also read (but have no first hand knowledge) that refinancing your house and using the home equity to pay off BIG student loans (JD, MD, MBA) can also be a smart decision too. Just planting some seeds for the 102'ers to look into.

Glad you other guys are beginning to chime in -- and your responses tell me that you've been good students -- more importantly - the responses show me you're all THINKING and understanding that there's no one particular answer. Once you get there... you've got the fire power to actually be independent! That's fantastic!



CapitanofIron...

Mutual funds are generally the "milk toast" of investing. They're the dumbed down version of one size fits all mentality. While I absolutely agree that they are the BEGINNING for many people - as they allow you to just put in 20 or 50 bucks a week... without thinking. SOME savings is better than NO savings... and if the company will match some percentage of yours -- then it's easy and painless... and done automatically.

Here's the ISSUE I have with Mutual Funds once you have enough to do any kind of investing on your own. As stated above -- when you look at what makes up a Mutual Fund... the top ten stocks are usually pulling the wagon - and then there's the other 100 that are the lamest of of the lame.. and they are what drag you down... AND when you add to that - the fund must earn something as they have management costs... then that further cuts into your return.

The entire point of this last 400+ pages is to teach people to think - and to be able to MIMIC a mutual fund on their own. Mutual Funds aren't the magic bullet -- they're the dumb bullet. The go up when the market is going up and they go down when the market goes down. Some of their investments pay a dividend - and most do not. So you own "everything" in their portfolio and when you look at the returns... most are super mediocre.

If you simply take your 20K and buy 10 good names or even 7 good names and have the dividends reinvested... You own your own mutual fund - but your performance will begin to really compound. You'll still go up with the market and down with the market. But as explained here many times. When the market is DOWN the dividends buy MORE shares at lower prices... THAT IS GOOD!! Every share you own pays you a dividend - the more shares you have the more dividends you collect and pretty soon you're on a roll.

Keep reading and keep posting.

I'm a Dave Ramsey endorsed local provider and get toe to toe with many of his listeners. There is a wide range that employ his philosophy. Many that are very well off.

To me, it's a simple, workable approach to becoming debt free and financially independent. Most need a simple approach to stick with it and be successful.

I agree that a one size doesn't fit all. I do employ many of Dave's philosophies. Like with any philosophy, you use what makes sense to you and create your own.

Anybody have any thoughts on cutting down on my retirement to fund
a million dollar life insurance policy on one of my parents?

A life insurance policy is tax free? Anybody do this as part of a retirement
investment?

later
John

You'd have to do a lot of math and guessing to see if that would pay off. Yes Life Insurance is tax free... But what it costs per month and for how many years etc is the issue.

Been working through this with my wife recently and her law school loans. They vary from 3 to 7.9%. I just closed a bigger/better 2nd on my home and was considering that option of paying down the higher loans, but I think I'd rather employ that money elsewhere.

Just for scorekeeping both student loan interest and primary residence mortgage interest are tax deductible, so even though they are a wash in this instance, it is always something to consider when doing your own analysis.

We will also check out SoFi.com as well -- thanks for the link.

Just upped my life insurance recently and did look at the cash value vs term option. Ended up just going with term as I felt the restrictions in the investment options/vehicles were just not wide enough for my liking.

Smart.

Your lovely bride has earnings power... so life insurance should be sufficient to pay off the house (people can also buy a MORTGAGE life insurance that pays off the mortgage upon death), bury your sorry butt, set up college fund for children.

Life insurance is a bet - they're betting you'll not collect - and you don't really want to collect. It's not about leaving your spouse rich. It's about taking the heat off should you meet an untimely demise. And number 1 - it's NEVER a good investment. You'll do far better to invest the "premiums" in dividend paying stocks over the long run.

I think a level term or a return of premium policy is better to cover a mortgage than "motgage life," which is a decreasing term policy.

There are times when a perment life insurance policy (whole life, universal life, etc) makes perfect sense.

John, not to sound morbid, but I would not want to be sitting around waiting for someone to die so I could collect money. Depending on the age and health, a permanent policy can get pretty expensive.

On the other hand, if you are in an inheritance situation where the estate is cash poor (family land or farm) or large estate where estate taxes are going to be a probem (estate over $5 million), then a permanent policy would work. Normally you would set both of those situations up in an irrevocable insurance trust.

For discussion's sake in this thread, I would be more than happy to run some numbers and post them up here so other people might understand how different types of life insurance works, pros and cons of different policies and how they might fit into a person's financial plan.

Not trying to sell anything here, just trying to educate like our Jedi Master.

The cash value policy I bought on myself when I turned 21 is to this day the best investment I've ever made. My financial Advisor back then talked me into it as a "Reverse IRA". Basically taking after tax dollars and investing them into a vehicle that grows tax free while protecting my family at the same time. The last premium payment I made took $2,000 and instantly turned it into a little over $8,000...tax free. I took one out on my wife when she was 30 years old and I believe it's $1500 premium eeks out about $4500 worth of cash value right now. I've tried to go back and buy more of the same many times and due to my age, I just can't make the numbers work to my advantage anymore. I'm 47 years old now and it takes right at 10 years just for the cash value to catch back up to premiums paid. My policy passed that limit between years 6 and 7. The trick is to buy these young from good companies, the only one I trust is Northwestern Mutual Life.

Thanks Greg,

I really appreciate your input as well as the effort you and everyone here have taken to help the investing-layperson gain understanding.

I am now definitely going to roll it over into my own IRA and go with stocks

My wife and I have started writing down some names of stuff we use/like

I even downloaded a mobile app that lets me track stuff, and it even shows the stocks graph over time (max five years)

Now I just need to find a place to open my IRA, I looked and Schwab has some local offices that I need to make an appointment with to sit down and chat.

Im going to do a little more digging, we have about 18 names right now, and I want to look through each of them to narrow them down to the 10 that we will go with.

I will definitely keep posting! :cheering:

I like it Payton. How about a scenario for some $500k policies?

Good info Payton!!


Estate taxes are something we've personally worked very hard on... With trusts etc. There is a pass thru of the first 5 million... and blah blah blah. It gets very complicated once you surpass 5 million. And of course - anyone with that kind of net worth should certainly have professional help long before they got to that point.

And yes -- mortgage insurance doesn't really work if your mortgage is down next to nothing... which is what happened to my Dad. I think this all came about back in the day with special programs the government had for GI's.

We used to have a couple big policies... but then they become rather useless if you don't really need them to pay off anything or to help your family. They were term policies and we dropped them quite awhile ago. For us personally - it's like having an IRA... we don't really need "retirement funds". YIPPPPEEEEEEE HAHAHAHAHAHAHAHA

I've been pretty happy with my investment of GoPro and Tesla. I bought GoPro at 40.55 and it ended today 63.52. Bought Tesla at 252.66 and closed at 282.11. Both have been a pretty fast mover, good investments and I'm hoping Tesla will explode once they break ground on their mega factory.

Oh hell yeah!



I should have loaded the boat with them... but no dividend... no investment. I have to live off mine.

Great pics and especially for you young guys!!

I'd also be interested in the 500k term life info.

Personally I would love to hear it from a 'neutral' source. http://d26ya5yqg8yyvs.cloudfront.net/ear.gif

NICE

when Tesla first was about to go public, I had about 5k in my savings, I wanted to buy so bad, but my wife correctly reminded me that it was all our savings at the time, and it would be stupid to risk it....

I showed her the other day what it was at, this was pretty much her reaction when I explained how much we would have made, :confused59:

we need to build 1 of 2 things, a device that lets you see in the future, or a time machine that lets you go back, haha

WELL I have taken the plunge.

I talked to fidelity and have rolled it over to one of their IRAs (Im familiar with the website and its free if you keep it with them, as well as trades are $7.98 which is the cheapest I have found)

So in 3 business days, I will be able to start pulling my money out of their mutual fund, and buying names.

I have decided to go with 10 picks and start from there.

I did alot of thinking, stuff along the lines of, what does everybody use that will not change during a recession, and certain stuff popped in my head, paper goods, gasoline, medicine, food. So I started looking around the house and when the wife and I go grocery shopping to see what brands go well.

Anyways, Here are my picks and why, please feel free to critique:

1. RDS-B Royal Dutch Shell - $82.11 per share, 4.58% div yield, graph: looks up and a little choppy, sector: Basic Materials, Industry: Major Integrated oil Why: I almost always fill up at Shell, Texaco or Valero, Texaco (Chevron) is expensive, and Valero doesnt offer much of a dividend when compared to the others
2. KO Coca-Cola - $42.17 per share, 2.89% div yield, graph: looks up and somewhat steady, sector: Consumer Goods, Industry: Beverages - Softdrinks Why: I love the stuff, and given the market share and how much Americans consume softdrinks, I dont see this going anywhere
3. UL Unilever - $43.84 per share, 3.4% div yield, graph: looks up and somewhat steady, sector: Consumer Goods, Industry: Food Why: Almost everything in our bathroom is from Unilever, the soap, shampoo, lotion, BUT I am a little worried about having too many consumer goods items
4. MO Altria Group - $43.89 per share, 4.74% div yield, graph: looks up and somewhat smooth, sector: Consumer Goods, Industry: TobaccoWhy: I dont smoke, BUT I also have quite a few friends who are hooked, and see so many people puffing away
5. NNN National Retail Properties - $36.57 per share, 4.60% div yield, graph: looks up and somewhat steady, sector: Financials Industry: Real Estate Why: I rarely see retail space empty
6. PFE Pfizer - $29.47 per share, 3.53% div yield, graph: looks up and somewhat smooth, sector: Healthcare Industry: Drugs Why: Out of the big name pharma companies that I could think of, this one had the highest dividend
7. GE General Electric - $26.02 per share, 3.38% div yield, graph: looks up and somewhat smooth, sector: Industrial Industry: Industrial goods Why: Out of the big name industrial companies that I could think of, this one had the highest dividend
8. TGT Target - $61.99 per share, 3.36% div yield, graph: looks up and choppy, sector: Services Industry: Retail Why: My brother is a pharmacist there, so I get to see usually how busy they are, also I just read that they are increasing their dividend http://seekingalpha.com/news/1975635...idend?uprof=45
9. T AT&T - $34.48 per share, 5.34% div yield, graph: looks up but choppy, sector: Technology Industry: Telecom Services Why: I use ATT and even though they have their problems, I see them as the most stable phone service company and they always seem to snag the exclusive gotta have it phone, as well as almost all the people I know that have company phones are on ATT, also I liked their dividend
10. ED Con Ed - $56.69 per share, 4.3% div yield, graph: looks up and somewhat smooth, sector: Utilities Industry: Electric Utilities Why: Out of the big name Electric companies that I could think of, this one had the highest dividend. Here in Texas its unregulated, so usually I just go with whoever has the lowest rate, but most of those are little companies that are private

What do you guys think

I was hoping my dividend average would be higher, but this is basically all I could think of

Thanks

Don't forget that over time -- you not only get dividends - but you have CAPITAL GROWTH as well.... 2012 the "market" was up 30%.....

Owning big good names like you've selected is what allows you to continue to pound money into them even in a down market. This part is extremely important... the same $500 buys more shares in a down market... they DO recover netting you nice capital gain -- but also they're paying that ever important dividend.

It more "Fun" to own the hot names at any given time... until you're in a down market.. then the hot tend to go cold as a stone and they DO NOT pay dividends and then you sell because you panic out etc.

Investing is mostly MENTAL. You have to be able to buy when everyone else is selling... that's when you make the big bucks. LOL But it's true.

Keep reading - keep posting -- you'd be surprised at how addicting investing is!