The people that I know that have the most --- have saved FIRST before anything else. They started this EARLY in life and now the compounding is coming home in spades.

I don't want this thread to become personal -- that's not my goal or intentions. I'm not a professional advisor - I'm just a hot rod guy. BUDGETING is a 'nother discussion and I really can't help you with that one.

Hopefully I'm not out of line butting in with a suggestion:
You're not alone, most of us don't save enough and have the ability to save more. Consider developing a household budget and involving everyone in the process is a good first step. That will get the household members thinking along the same lines and may create a team focus. Then discuss funding family and individual wants vs. needs vs. savings. Using pie charts may be the simplest method to develop the plan(s). It will take a little planning and salesmanship but the lessons learned and the resulting savings it may pay good dividends. :thumbsup:

So, Greg, overall you're happy with your Charles Schwab online account?

Right now I have a Merrill Lynch account, because that's what the state says I have to have. I'm doing very well in it, and as long as the governor doesn't get his way I will be able to buy service credit and retire with 72% of my salary at 55, or 90% at 60. I have a 457 plan that lowers my pretax liabilities and doesn't have any penalties for early withdrawal. I still haven't desided weather once I start maxing out my 457 if I should continue to invest in stocks, or amortize the hell out of some real estate.

Someting tells me years from now, ill look back on this with a wife and kids, and think "man, I used to have money!" :lol:

This is an awesome thread ..... one that I am enjoying and learning from. It's right up there with the "12 Gauge Garage" in addiction rating!!

My 401K is in a mutual fund, and I have a couple of small annuity accounts - one each for my wife and I. The stock market has always seemed so complicated, mostly due to the input from the few friends that I have who buy stocks. I've thought about opening an stock account for years, but have always been too intimidated.

I've looked thru the Schwab and etrade websites and setting up an account seems pretty straightforward. $1K minimum to open the account, and it seems like you're off and running.

So, Is it really this simple?

It's $8.95 for every trade. Does that mean that every time I add $ to my account to buy more stock, it costs me $8.95? Or is a "trade" only selling a stock?

I think that I read that there is a minimum number to trades that I have to complete on a yearly basis?

Again .... really that simple? Choose a known stock with increasing value over the last 10 years and hop in the game?

Where is the magic? :_paranoid

Yep -- it's that simple!

A "TRADE" is a buy or sell.... but once you buy something... there is no more cost.

It cost you NOTHING to put money into your account.

The thing that I've been preaching is to just buy good quality names - that pay dividends - re-invest the dividends and DON'T try to be a trader! Don't try to hit the lottery by buying the next "hot stock"... You can do that IF you have lots of money and lots of skills and lots of experience. We're talking SAVINGS here - retirement savings - long term savings.... not trading stocks. Not a get rich quick scheme. Just straight forward save and have the power of time compound your savings.

The big difference between a "savings account" (money in a bank savings account) and stocks is that you don't want to be taking money in and out of stocks. SO.... you have a "savings account" and when you have "enough" in there that you're comfortable with - then the 'extra' should be invested. You don't want to put all your money in stocks - and then not have any savings (ready cash). That would be wrong. Even I don't do that. :wow:

@billscamaros
Regarding Schwab I've been very satisfied with their web services. For over 10 years I've used their services for stock managment, trading, checking, on line bill pay, and over-seeing our company's profit sharing plan which is managed by a professional firm. Very good site architecture with a multitude of tools and sound advice. My only inconvenience is my local branch doesn't take cash deposits.

I think this is very sound advice on achieving what I call Balance. It's never easy, but what you've suggested is perfect. If everyone has the same goal and pulling in the same direction things come a lot easier and quicker. It also allows you to help keep each other in line with your spending.

This is some great info! Greg, thanks for sharing some great stuff as you can do with it with experience and knowledge. Most people would probably charge for the information you gave out.

Between investment knowledge and the work progressing on "BUBBLELICIOUS" I don't see how Greg sleeps and I see how Rodger became a millionaire..........wait.......or is it vice-versa??................lol..........jim :rofl: :rofl: (Seriously Greg, we are all learning alot and we thank you)

Welcome Jim!

Hey -- I like the Bubbleliscious... but I'm not painting it pink!:D

The Impala has a name now..HA HA. Great advice, Like I said before, nice to hear from someone that can explain it from experience. Ill keep reading it you keep posting on it

Here's a website that I "use" for general scanning of something I might of missed when looking for dividend stocks. Seeking Alpha has a "section" devoted to DIVIDEND investing. Not to be confused with TRADING! :D

I don't invest based on someone writing an article... I just get "ideas" -- and sometimes I get "reinforcement" for why I already own something.

Here's an article like that... since I already own MO and PM -- but this gives me a quick read on WHY I own them!

http://seekingalpha.com/article/3145...g_income&ifp=0

These kids will be future millionaires from just their allowance!

http://finance.yahoo.com/news/super-...rs.html?page=1

Those kids are smarter than 99% of all the adults I know!


The one kid - says he's invested in Apple (Great!) - Microsoft (SUCKS!) - RIM (SUCKS) .... two BAD choices and only one good one - AND more importantly - he's NOT diversified... so he has some learning to do. But I'd still be proud of him for saving and investing!

Yeah - I made millions off Microsoft -- but that was SO YESTERDAY --- and it's been a nothing stock for 11 years now! Fugidaboudit and move on. That ship already sailed.:D

Greg, thanks for taking time to write all this down. Your solid examples are paint clear pictures of how to invest and dispense with a lot of the technical arguments that keep a lot of people on the sidelines.

For those of you starting out remember, "Perfect is the enemy of good". Go out there and get started!

This thread might be the best one on Lat-G. Thanks again.

I was just reviewing how to describe the "TOOLS" a guy can use to research stocks... and one of the things that people just don't get is what is called TOTAL RETURN. That is the stock - re-investing the dividends - and the stock price appreciation.

Schwab has a "Research tab" -- you can research stocks - or bonds or etfs (exchange traded funds). If you go to the STOCK tab -- you can enter a symbol or name... That will pull up a page with a SUMMARY of the stock... and in the GRAPH that comes up labeled "COMPANY PERFORMANCE" -- there is a underlined heading "Total Return"... when you click on that it will show you a graph comparing that companies total return against the S&P 500 (Standard and Poors 500 stock index) and a selected INDEX fund for the category that the stock you're checking is in. Using Kinder Morgan Partners as an example -- it pulls up the ENERGY ETF (ETF are exchanged traded funds that are a basket of stocks that make up an index - not unlike a mutual fund).

When you look at KMP (Kinder Morgan Partners) you'll see a CHART - and right beside that (to the right of it) it shows IN GREEN the total return for 1 year - 3 years - and 5 years.

Now - everyone wants to hit a "Microsoft" and become an instant millionaire -- FUGIDABOUDIT!

BUT here's real investments that I listed in an earlier post and their FIVE YEAR TOTAL RETURNS:


Kinder Morgan Partners --- KMP -- 129.5%

Altria --- MO -- 104%

Phillip Morse --- PM -- 112.3% (3 year period since they were spun off from MO just 3 years ago)

COKE --- KO -- 59.6%

McDonalds --- MCD -- 161.1%

Johnson & Johnson --- JNJ -- 13.4%

Annaly Capital Management --- NLY -- 113.6%

AT&T --- T -- 5.9%

Con Edison --- ED -- 59.3%

I don't know about you guys -- but 100% RETURN on my money in a 5 year period gets my blood flowing... beats a savings account that's for sure!

wow! solid numbers for sure.


Thanks for all the effort you put into this thread Greg. I certainly didn't expect it to turn into a one man teaching lesson but I'm glad you've spoken up.

+1 Greg rekindled the spark for me. All those companies are on the watch list I created Friday. :hail:

Now where's the market heading :question:

I looked at my crystal ball --- and based on HISTORY -- UP over time.... but it will go DOWN 15 minutes after you buy in. That is, at least for me, the way it seems to work. But I get even in the end by holding (going long) and smiling while the pay me to wait.

I used to "play" in the market.... big numbers... get up in the morning - buy 4 or 5 stocks - and be out and back to playing on cars by noon. That is GAMBLING and it was only "dumb luck" that had me out of the market during the 1999 "dot.bomb" days or I'd have lost a few bazillion dollars. But - here's the difference - what I was playing with was NOT my only money - My house is paid for - my cars are paid for - so it was "okay" for me to take some dough and gamble like that. In the end -- all I really did was to create a huge tax due bill...

When I look back at that era -- and do the math... I'd have been far, far, ahead if I would have just bought those same stocks I was trading - and held on to them. It was those 'lessons' that made me the "investor" I am today... so in that sense - it was educational! :woot:

Best thread on the site IMO. Take the advice, Make money and have your Interior done :lol:

^^^^^^^^^ Yeah buddy! Make money FIRST -- then you can have your cake and eat it too!

LMAO - There was a point every stock I bought was guaranteed to go down 10+% especially IPO's. :rolleyes:

My first stock purchase was a 100 shares of Nike when it hit $5 for the first time which was big money for me at 18 years old.........it doubled and I sold it...........I don't want to know and never tried to compound the value out.

Again, thank you for the insight you are providing those who choose to read this thread on the forum as it is truly generous, genuine, and an invaluable sharing of investing wisdom. :thumbsup:

Greg and all...great thread!

I haven't been here on Lat-g for too long, and I can't say I ever expected to see this sort of discussion going on! You guys think this thread is addicting? Just wait until you start investing and you see that money double (or triple, or ???). Now that is addicting!

I'm guessing that to some even this thread is still making the whole investment 'game' seem intimidating, but really it doesn't have to be. I think there are a few really key points that Greg has made (and others as well):

1. Start investing as early as possible.
2. Only invest money that you don't need immediate access to (i.e. you already have savings/emergency funds).
3. Diversify.
4. Buy what you know.

Honestly, if you follow those basic rules I think you could pretty much get to retirement as a fairly successful investor! You'll be ahead of the vast majority of Americans, that's for sure!

One thing I haven't seen discussed with regards to buying and selling stocks that I thought I would add is the difference between a short term and long term gain. While every investment has its own tax related issues, I would consider this the most basic concept that you need to know. If you buy and sell stocks frequently, your gains (profits) are taxed at a different rate than if you hold for a year or more. Short term is taxed at your ordinary income rate, while long term is taxed at a flat 15% (or 0% if you are in the lower tax brackets). This is part of the reason you should only invest money you don't need immediate access to (the other being that you don't ever want to be 'forced' to sell at an inopportune time just because you need cash!).

The large stocks that Greg mentions are relatively safe, and are a good place to start if you are just getting into the market. Jump in and then continue to educate yourself as your total investment grows! As you learn more you can expand into more advanced investments if you so choose. The more money you have in your portfolio, the more investments there will be available to you.

I'm far from an expert and don't have a ton of money invested in stocks outside of my 401K's and IRA's, but I do find it pretty dang fascinating and fun. Who doesn't like getting 'free' money? There is a TON of information out there online, and the books people have mentioned are all good. It's never too late to start learning!

Thanks to all, and happy investing,
Marcus

I've had fun with this thread... investing is a passion of mine that is right up there with hot rodding.


Laughing about the Nike buy. Back in the day -- I bought (was allowed to buy) 1000 shares in the IPO of Starbucks.... it went public at $14 -- on a Thursday or a Friday... I flipped it out up .50 on Monday and thought I'd cut a fat hog in the azz... 'cause I'd made a whopping $500 in one or two days.


It has gone up 6392% --- but I made $500 :wow: :lol:


That's a ONE POINT THREE MILLION DOLLAR loss.....

I've only got 50 shares of Nike now..........just because. Have any SB's :unibrow:

Speaking of passion, that '62 has serious potential, I'm looking forward to living vicariously through that build thread. A friend picked up a black '62 409 SS in the 80's and my first impression of that car is etched in my mind. :thumbsup:

Thanks Marcus!

Okay - so just to be sure - dear readers (I feel like Abby) - DIVIDENDS are taxed at 15% (currently) and that is for what are called QUALIFIED DIVIDENDS (there's other kinds of dividends). The stocks and their dividends we've touched on here - are all qualified.


Marcus is referring to GAINS (if any) on the sale of shares. And what he says is right on. There is as he states long term capital gains and short term capital gains. The rule for IRS is ONE YEAR AND A DAY. Frankly, I don't get caught up in that much because I'm interested in collecting the dividends so hold more than a year.


Marcus -- I've had to delete several posts because I'd read them and go -- nah - to0 much info. This is "Investing 102" - so I've kept 'em super simple (which investing really is). But you're 100% right -- there's a ton of different investment "vehicles" once you actually have a little dough. Which, of course, adds DIVERSITY once someone feels the need to. I'm not sure at what point someone needs to be in much more than the three basics -- Stocks - Bonds - Real estate (other than your home). At 58 - and I've been retired for 20 years - I've just this last year bought bonds. It just somehow felt "right" to put some money into nice safe tax frees... but the lack of growth kills me... because I've always gone for growth! At some point though - a guy needs some safety. So I guess I've got one foot in the grave! :D

Great info!! Thanks Greg for reminding me how my bad my financial decisions have been and why I will work until I am 97 years old :lol:

:lol: :lol: Well..... I'm not quite sure what to say!


So... we're re-doing our estate planning and wills.. And, since Adrienne (21) is home from college - we thought we'd have a "family meeting" and discuss some of our "ideas" and let them digest them for a day or two - and then have some input. Of course this is in the event both Mom and I meet our untimely demise... Now - we know our kids... #1 Son would most likely buy a Bugatti one day after he got the money... Adrienne would invest the money and live off the dividends. BUT -- surprisingly enough -- both thought that their inheritance should be in trusts and managed professionally... to protect them from themselves. Mom and I thought that was pretty impressive as they both admit that they most likely are not equipped to be very good money managers. Fair enough!

My point to this is -- that most people (me included) have a long list of "I wants". Only a very few can fulfill that list AND save enough to retire on. So the key to all of this discussion is to try to do both in moderation.... saving first... and the savings will eventually allow you to peck away at the list.

[QUOTE=GregWeld;385154both thought that their inheritance should be in trusts and managed professionally... to protect them from themselves. Mom and I thought that was pretty impressive as they both admit that they most likely are not equipped to be very good money managers. Fair enough!
[/QUOTE]
There is a good measurement of success as a parent. Congratulations.

My best friend died at 54 in 1995, his son would never take his advice, I guess in an attempt to prove himself, his inheritance was placed in a trust that he couldn't access for 3+ years until he was 28. Three of us tried multiple times to sit him down and give him investment and planning guidance to no avail. It took him and his wife 2.5 years to blow 6+ million dollars and have no assets. He's now divorced and living in a rental. Sad story to witness.

Money is only part of the equation.

Theres some good stuff out there you just have to keep your eyes open, If its national news you already missed the big gains..In most cases. If someone thinks they know something post it up, maybe we all can become the new power of the country !!! :lol:

Ha...yeah, I had trouble only writing "a little" because there is a lot to get excited about when you learn more and see what is really possible! I really do hope that one of the biggest things people take away from this is exactly what you said - investing is really simple as long as you stick to the basics!

Retired at 38, huh? I guess I'd better hurry up...I'm almost 36, so I only have a couple more years until retirement. Ha!

Tracy, are you advocating the start of an official Lateral-G Fund? I'm liking the sound of that! :thumbsup:

So here's a couple thoughts -- and remember that I'm really "exposing myself" personally here - but I can only use information and share that - from what I really KNOW... not what I heard from someone else tell someone else.


I was "reviewing" someones portfolio... at their request. Just a look and compare function.

They were in SONY (SNE).... Okay - great name right?! But the OWNER of the account only knew they were in Sony and that sounded great!

A quick check of the charts -- SNE is DOWN 64% over 10 years and DOWN 50+% over the last 5 years!

Compared to an investment in McDonalds (just to pick a favorite) that is UP 267%

So 100K invested in SONY is now worth 40K and the same 100K invested in McDonalds (at the same time - 10 years ago) is now worth almost 400K. (I'm not doing any math here - I'm just making quick comparisons).

Here's THE POINT.... his money is professionally managed -- so he never did ANY research for himself - nor did he even know WHY he was invested in what he was invested in! That my friends is total BS!! You going to buy a motor and not ask what's in it and how it was built and what kind of power it's making? One 454 could produce 300HP built for a truck - and another could be making 700HP... HUGE difference. Treat your investments the same way! Do just the minimum amount of research. You can check all this in Google Finance or Yahoo Finance - it's so dang easy just to look! It will pay off in the long run.

I see a new brand for instructional books. The first one will be: Investing for Gearheads

So let me ask another question about the Google Finance charts. Looking at Duke Power (DUK) on the chart, I toggle the 10 year view and notice that in around mid 2006, the price went from $33.21 on 10.37M (shares?) to $18.74 on 34.68M (shares?). Does this indicate that the stock "split"? This would be a good thing? On the 5 year chart, it looks as though the price has remained steady .... I assume that this isn't the good growth that you're looking for?

I do have to say that I'm getting a little hooked on checking various stocks out on Google Finance.

What you are looking at there isn't a stock split - it's a dramatic drop in stock price! The other number is the volume of shares traded - I'm not familiar with DUK, but there was obviously a reason (rational, or not) that the price dropped so far and the market reacted with a lot of people trading a lot of shares. (One thing to always remember is that for every share sold, there has to be a buyer somewhere - while half of the traders were freaking out and selling, the other half was buying!) Charts are generally 'split adjusted' meaning it shows the graph as though the splits never happened to keep the chart easier to read.

(EDIT - you got me curious, and a quick search showed that in January 2007 Duke Energy spun off part of its business (forming a new seperate company called Spectra Energy, NYSE:SE) and gave each shareholder 1 share in SE for every 2 shares they held in DUK. This means that if you previously owned DUK, you now owned shares in both DUK and SE. The drop in the stock price would be the market response to this. It makes sense when you think about it - DUK should be worth less money now that the company is smaller, and the market reflected that. This is kind of a special case and isn't something that happens everyday!)

If you click on the 'settings' button below the graph you can turn a lot of the indicators on and off. Take a look at NKE or SBUX and run it out to 5 or 10 years and you'll see at least one split in there.

Make sense?

Marcus

Tracy, are you advocating the start of an official Lateral-G Fund? I'm liking the sound of that! :thumbsup:[/QUOTE]

MARCUS that sounds like a good idea

:lol: Good one!

I like ---

Investing for life.... as in.... a better one!

Your last check should go to the morgue and bounce....

Your kids just fight over it, give it to them while your alive, so you can all enjoy...

Book called DIE BROKE..

To reinforce Greg's advice:
11:16 AM Among the stocks making new 52 week highs as year end approaches are faithful big-caps across a number of industries: Wal-Mart (WMT), Pfizer (PFE), Verizon (VZ), and McDonald's (MCD). All yield more than the 10-year Treasury and likely have more adaptive managements than that in D.C. What's not to like?

Talk about the perfect analogy for your intended audience! :lateral: