Investing 102

[GrabberGT]

All great and very appreciated info. Here's a new one... What are your thoughts on Roth IRA vs Whole Life Ins. vs the Dividend paying stocks model thats been outlined here. My only investment for my retirement so far is my 401k which I have maxed out at what my company will match. I'd like to start putting away some more for retirement and would like an unbiased opinion. The only opinion I have so far is the Life Ins company.

Thanks

[GregWeld]

Originally Posted by GrabberGT

All great and very appreciated info. Here's a new one... What are your thoughts on Roth IRA vs Whole Life Ins. vs the Dividend paying stocks model thats been outlined here. My only investment for my retirement so far is my 401k which I have maxed out at what my company will match. I'd like to start putting away some more for retirement and would like an unbiased opinion. The only opinion I have so far is the Life Ins company.

Thanks

Life insurance is a savings account for the beneficiary.

As an "INVESTMENT" it sucks bilge water.

A person should have enough life insurance to make sure their family doesn't suffer due to their loss. So if you have a 200K mortgage - and 50K more in debt - buy a 500K term life policy and that will insure the loved ones can live in the house debt free - pay off all other debts and have enough to bury your sorry ass. It's paid tax free - so it's a net net amount. Put the rest into savings/stocks/401K/RothIRA and hope you don't croak.

If you're a big earner - buy a $1,000,000 term life.... which will give the family enough to pay off debts and get started on a life without you. It's not an investment vehicle - it's an INSURANCE POLICY -- it's just there to help people get over the hump. As your investments grow and you age - reduce the face value unless you just like to pay insurance companies.

[CRCRFT78]

Thank you for the honest opinion Greg. I've been sitting on those few stocks for a year or so and the performance has been ok. I would like to get a little more involved in this as I feel I have a risk tolerance for this and would like to see some earnings. I hope you don't mind me emailing you with any questions I may have.

GREAT THREAD everyone. Definately a lot of good information, let's keep it going.

[GrabberGT]

Originally Posted by GregWeld

Life insurance is a savings account for the beneficiary.

As an "INVESTMENT" it sucks bilge water.

A person should have enough life insurance to make sure their family doesn't suffer due to their loss. So if you have a 200K mortgage - and 50K more in debt - buy a 500K term life policy and that will insure the loved ones can live in the house debt free - pay off all other debts and have enough to bury your sorry ass. It's paid tax free - so it's a net net amount. Put the rest into savings/stocks/401K/RothIRA and hope you don't croak.

If you're a big earner - buy a $1,000,000 term life.... which will give the family enough to pay off debts and get started on a life without you. It's not an investment vehicle - it's an INSURANCE POLICY -- it's just there to help people get over the hump. As your investments grow and you age - reduce the face value unless you just like to pay insurance companies.

Thanks. This covers Term Life. What about Permanent Life Ins. policies?

[WSSix]

Why do companies split their stock and is there anyway to know it's going to happen etc?


Also, I just noticed that Halliburton pays a dividend on their stock. Even though I've bought my stock through the ESPP, I should still get that dividend payment too, correct? I'm pretty sure I checked reinvest any dividends with my account but I'll have to look. I'm kind of excited since I've never known how to look up stock performance information before. Google Finance is pretty cool, lol.

[GregWeld]

Originally Posted by WSSix

Why do companies split their stock and is there anyway to know it's going to happen etc?


Also, I just noticed that Halliburton pays a dividend on their stock. Even though I've bought my stock through the ESPP, I should still get that dividend payment too, correct? I'm pretty sure I checked reinvest any dividends with my account but I'll have to look. I'm kind of excited since I've never known how to look up stock performance information before. Google Finance is pretty cool, lol.

Well there -- see how you are! Next thing you'll be telling me what to buy!

Google finance or Yahoo finance -- both good for just poking around and looking at stuff. Glad you found it to be somewhat useful.


Companies split their stocks for a variety of reasons -- usually to keep the 'momentum' going in their stock (it creates excitement in the market) and - #1 - to keep their share price "affordable".... People can buy shares at $35 or 50 bucks -- they become "hesitant" when it gets up to $100....

They usually only split like this when the company is GROWING and doing well.

A sure sign a company SUCKS --- a REVERSE SPLIT.... when they take 10 shares and turn them into 1 (expressed as 1:10) !! Citigroup (C) did this awhile back.... because their share price had fallen to about a $1 a share -- at that price -- they get "de-listed". It didn't help.

We could talk about reasons for days - but basically it's (a stock split) a "reward" to the shareholders.... people love 'em!

Berkshire Hathaway (Brk.A) (Warren Buffett - heard of him?) has never split their shares - ONE share is $112,325.00 PER SHARE -- how many of those are you going to buy?

[pw2006]

Originally Posted by GregWeld

Well there -- see how you are! Next thing you'll be telling me what to buy!

Google finance or Yahoo finance -- both good for just poking around and looking at stuff. Glad you found it to be somewhat useful.


Companies split their stocks for a variety of reasons -- usually to keep the 'momentum' going in their stock (it creates excitement in the market) and - #1 - to keep their share price "affordable".... People can buy shares at $35 or 50 bucks -- they become "hesitant" when it gets up to $100....

They usually only split like this when the company is GROWING and doing well.

A sure sign a company SUCKS --- a REVERSE SPLIT.... when they take 10 shares and turn them into 1 (expressed as 10:1) !! Citigroup (C) did this awhile back.... because their share price had fallen to about a $1 a share -- at that price -- they get "de-listed". It didn't help.

We could talk about reasons for days - but basically it's (a stock split) a "reward" to the shareholders.... people love 'em!

Berkshire Hathaway (Brk.A) (Warren Buffett - heard of him?) has never split their shares - ONE share is $112,325.00 PER SHARE -- how many of those are you going to buy?

I like Buffet, I have owned his Brk.B shares for over 5 years. However, it doesn't have a dividend and it is about flat split adjusted since I have owned it. I sell out of the money puts and covered calls giving me a descent yeild. However, even with my options, I would have been much better off in MCD. How do we inverse hindsight?

[GregWeld]

Originally Posted by pw2006

I like Buffet, I have owned his Brk.B shares for over 5 years. However, it doesn't have a dividend and it is about flat split adjusted since I have owned it. I sell out of the money puts and covered calls giving me a descent yeild. However, even with my options, I would have been much better off in MCD. How do we inverse hindsight?

Oh god -- if I had a dollar for every one I've MISSED... There's so many high fliers... a guy could have made an easy million on a ten thousand dollar investment!

Yeah -- I'm not a fan of Buffet - and if you think you have flat returns now - wait 'til you get up one morning and read he's passed away! POOF!

NO THANKS! I wish him all the best - but I ain't counting on it. Talk about gambling?!?!?

It's amazing -- when I look at stocks -- which I do CONSTANTLY -- how many big moves I've missed in names you'd never guess in a million years had the kinds of moves they've had. McDonalds is just one prime example that everyone understands and "never knew".... I hate the product - don't eat there unless on a single guy road trip - but it's a great investment. Ditto the Terbacky stocks (MO - PM - LO)... I don't smoke - hate the smell - think it's DEAD wrong... but I'll invest in them!

[GregWeld]

Originally Posted by GrabberGT

Thanks. This covers Term Life. What about Permanent Life Ins. policies?

I'm just not a big life insurance guy -- but I'm in a lot different boat. I've only ever used Term life.

Look at life insurance this way -- you give money to someone else -- they manage it and make money off of it - and then they gamble that you're going to keep paying them for a bazzillion years (most don't) and they might have to give you some money back.

So - it might be considered "forced savings" for those that can't save but will "pay the bill".... but no matter how you cut it - it IS NOT a good "investment".

Use it for what it's for - and INVEST in stuff that will make you money.

Just my opinion.