$5500 if you're funding it yourself. Higher if you're over a certain age. In general though, they are great unless you find yourself in the tax brackets listed above. I do the majority of my investing within my Roth account.

Thanks guys....

Jointly the wife and I are under $160K, I sure hope my tax bracket now will be LOWER than my retirement tax bracket!! :thumbsup:

How much would you say is a minimum to start with? I'm a few months out before I can commit a decent chunk every month but I could swing a grand or so until then. Pick 1 stock and put a grand in it now?

Paying any debt that has a "high" (that's relative) interest rate is priority. Once it's paid off --- the catch is to not charge more than you can pay off each month... If you pay off a 10% loan -- it's the equivalent of making 10% (not quite but you get the idea). Paying interest is the opposite of compounding interest for yourself... it's compounding for someone else.




For those that qualify -- I'd always fund an ROTH IRA first --- while it's not tax advantaged NOW --- pulling that money out tax free when you retire is just HUGE. We don't know what tax rates will look like when we retire -- but the longer you have until you retire -- the more you can bet they'll be higher than what they are now. Allowing your money to compound for years - and withdrawing it completely tax free is huge!

Think this way --- if you retire and need $2000 a month from your ROTH IRA... you can just pull out $2000 each month... but if you need $2000 a month to pay your bills and you're withdrawing from a 401K and you're in the 25% tax bracket -- you now need to pull out enough to cover your $2000 need AND enough to cover taxes ($500 more?)... so you're draining your account $500 a month more than if you had it in a ROTH. That's $6,000 a year! Just for taxes.

Put the money in NOW -- let it grow... and withdraw tax free! It's the greatest gift Congress ever gave you!






Whatever you can afford -- there is no magic... I'd say if you have a grand --- either do ONE stock -- or do TWO.... and when you have $500 more add a third -- do this until you have TEN stocks... then start to add your $500 to one of the ten names... until you have a grand in each... and so on. The most you need is 20 names even if you have one million dollars (that's 5% per investment). If it was me -- I'd always add the additional funds to the name that had the poorest performance -- thus buying me more shares - and bringing my average cost down the quickest...

There's an explanation to averaging down somewhere in the thread.

I agree with Greg about doing what you can when you can at any point with the Roth. I say this even if you know you'll be over the salary limit to contribute eventually. I started my Roth in my 20s and some years could only manage a $1000 or so. I've only been able to max it out the last few years.

Also, I'm sure it's been mentioned but once you've got an account open, don't save up through the year and make lump sum deposits to it. Get the money into it ASAP even if it's $50 here or $100 there. If you're dealing with smaller amounts, especially if you're young and just starting out, you may find simply investing in a target retirement account is best. This way you can make the small deposits and not worry about having enough to buy a full share of a stock. You can't buy half a share of a stock but you can buy half a share of a mutual fund.

Here's a quick run down of the regular and Roth with minimums etc from Vanguard. I'd bet the other houses are similar

https://investor.vanguard.com/what-w...-and-roth-iras

Sorry -- I'd forgotten to respond to this...


I had written earlier that I was personally disappointed in a couple recent McDonalds visits... the food was cold and the places weren't especially clean.

When I'm an OWNER of a stock - that makes me an OWNER of the company -- small yeah -- but that IS what you are doing when you buy shares -- you're buying a piece of the company. I like to be proud of what I own..... and I also subscribe to the Jeffery Lynch version of investing. I buy share in companies that I can see and use personally.... keeps it simple.

SO --- I think I'm mister average Joe guy in the street --- and if I'm avoiding the food at McDonalds -- then maybe others are as well. What Gwen and I find is that if we get hungry for a burger -- we want to spend those calories on eating something really good!

So coupling that with the relatively low % of dividend.... and understanding that if my money has to work for me -- and I want to be paid a MARKET rate of return --- and we are in a rising rate environment -- then something has to be sold in order to buy something else with perhaps a better cash-flow and growth prospects. It's more just a rebalancing act which should be done by everyone at least annually. You look at every holding and if you're honest about your expectations and assessment of the business... and then you either continue to hold -- or you move on. I chose to move on.

My positions in a name are kind of large on a relative scale to most reading this drivel on here.... My positions are usually a million or more per name. I live off the income generated rather than re-invest it, as I'm kinda done trying to save some money. LOL. When I look at where my portfolio is and the average income and growth --- making 3.3% and only seeing 7% growth puts a name like this at the bottom rather than in the middle. Middle gets held -- bottom gets sold. I have steady eddies already -- if I didn't -- then I would have looked at mickyD's with a different thought process... but I already have Coke (KO) and Altria (MO) and Con Ed (ED) and several other holdings that have those qualities.

Does this make sense?


BTW --- I NEVER want anyone to follow what I do just because I use it as an example around here. I'm in a completely different "place" -- I'm not a young man anymore (anyone under, say, 40 is young!) -- I've been retired for years -- and I'm (as stated above) not trying to diversify or save capital up to build a nest egg. So my moves are geared to making CASH FLOW so I can continue to race with Charley and put fuel in the rig. That's way different than INVESTING 102 -- similar -- but a different balancing act. If I have a long term gain (owning the shares one year PLUS a day) == and I can take that capital gain... and raise my % of dividend with some other name... then that's what I do. The difference of getting 3.3% on a million bucks or getting 5.2% is a good number... and if I can get 10% growth instead of 7%... that makes something look even better!

I DID NOT take the time to read this sites information --- I kinda already have a decent idea on what it takes to make some investment decisions... LOL

BUT ---- it might be worth a read for the new guys... and might be somewhat faster than trying to work your way thru all the posts here (maybe less confusing to get started with than here).


http://beginnersinvest.about.com/od/...esting-101.htm

So here's some info that came thru just now --- that KEEPS ME BEING A DIVIDEND INVESTOR...


http://www.marketwatch.com/story/bp-...k=MW_news_stmp

I own 11,000 shares of British Petroleum Prudhoe Bay Trust (BPT) -- the last dividend I got was $2.17 a share (for the quarter).... they just announced that shareholders of record (the EX date) will be paid $2.527 (call it $2.53).


Now ---- Since I get to waste my dividends buying much "needed" useless crap that Charley wants me to have... I just got an allowance increase of $4,000 every 3 months... for doing what? Nothing.

This particular dividend VARIES because it's based on how much oil they pump and some other stuff -- but it's always a nice check. I just like it when the check gets bigger rather than smaller!

I picked up Ford "at a discount" a couple of weeks ago while it was down. I am already in the green, cant wait for dividend day!

Glad to see a few more guys jumping on the train here. Awesome!!!