Investing 102

[MoparCar]

Greg,
Thank you for taking the time to educate us. I really appreciate it! I know it's something you wouldn't have to do. Very educational. My favorite thread right now!

Wes

[jay72nova]

WoW!
alot of good advice here!

just to give another example, this is how I do things.
I own two houses the one I live in and the one I used to live in, I have the renters pay the mortgage and taxes and expenses on that one with thier rent.

outside of my mortages I save 20% of my income in invstment and savings of some sort. When I was single and when my wife and I were both working it was 30%
I lived in 300$ a month rentboxes and drove and old copcarbluesmobile for many years.

The only reason I bought a new car is becuase I got one tax free at invoice from Iraq...it won't happen again

I maxed out my 401k, (and I think everyone should) I like the HUGE boost it gets from the money coming out of my paycheck BEFORE it gets taxed....that garenteed growth right there!!! whatever your tax rate is you get an automatic growth boost the day it goes in the account..plus whatever the account makes....plus whatever your employer might put in.

I max out my IRA

I have all my money in my government TSP or my Schwab account which I have an IRA, individual investment account and a checking acount in. I use my investment account as my "savings"

Most of my investments are in index funds, no fees and they track the market....there are very few managers that beat the market and when they do its not year after year...and index funds don't have fees to pay which compounded turn out to be alot of money.

I have a couple high divedend stocks just for fun.

schwabb has some nice tools, one of which is an account analizer. you tell them your investment needs and it compares your needs to your account and tells you what they recommend you sell and buy...as in sell some large caps and buys some small caps because you said you could tolerate more risk than your account reflects. I use it.

anyway thats what I do.

[redefined]

I'm 7 pages into a 358 page thread. So far it's awesome and I can't wait to read it all! So many pages to go, forums rock my world. A car forum and a thread on investing, but this time it's someone that actually knows what they are doing. Gotta love it! I'm going to need some coffee!

I'm 30 yrs old and have a good head on my shoulders as far as money goes. Sadly my wife and I haven't saved what we'd like to but we have Roth accounts and a business and I have a solid job with Deloitte. Currently I want to invest to save for retirement, save a boat load of money for our second house to buy in 2-3 years and pay off my school loans - went back to school and graduated in 2013 yay!

IRA/Roth is good and this thread is very informative and just helps to drill down into the basics. Where I struggle is picking those 'big name big cap stocks that pay you a dividend' and finding the info on the company to answer the questions of what type if dividend, large or small, and to know enough about their business and what it means if the stock cut in half. Do I buy more if it cuts in half? What determines that? Does it count on a retail customer to support their business and drive the stock? I don't trust most people so that's probably a bad idea, or is it?

Back to reading and many thanks to you Greg. Sadly since I don't have the buckets and buckets of money that some do, when I get into the mood of investing and saving it makes me want to sell everything and just save save save. '68 Camaro for sale? Haha, noooo!

[GregWeld]

Originally Posted by redefined

I'm 7 pages into a 358 page thread. So far it's awesome and I can't wait to read it all! So many pages to go, forums rock my world. A car forum and a thread on investing, but this time it's someone that actually knows what they are doing. Gotta love it! I'm going to need some coffee!

I'm 30 yrs old and have a good head on my shoulders as far as money goes. Sadly my wife and I haven't saved what we'd like to but we have Roth accounts and a business and I have a solid job with Deloitte. Currently I want to invest to save for retirement, save a boat load of money for our second house to buy in 2-3 years and pay off my school loans - went back to school and graduated in 2013 yay!

IRA/Roth is good and this thread is very informative and just helps to drill down into the basics. Where I struggle is picking those 'big name big cap stocks that pay you a dividend' and finding the info on the company to answer the questions of what type if dividend, large or small, and to know enough about their business and what it means if the stock cut in half. Do I buy more if it cuts in half? What determines that? Does it count on a retail customer to support their business and drive the stock? I don't trust most people so that's probably a bad idea, or is it?

Back to reading and many thanks to you Greg. Sadly since I don't have the buckets and buckets of money that some do, when I get into the mood of investing and saving it makes me want to sell everything and just save save save. '68 Camaro for sale? Haha, noooo!

Well - - first off thank you.


Secondly -- you have a good amount of time on your side... so if you get started you'll have a nice retirement.


Third -- Yeah - the thread has grown a bit -- but much of it is repeated info - so you'll have to learn to skip when it gets repetitive.


Fourth -- It doesn't take much to open a discount brokerage account -- and that's where you'll find a lot of info on what you're missing --- i.e., the dividend etc. But you can also get a lot of that info right on Google Finance -- and I'm sure Yahoo Finance etc.


Fifth -- It sounds good to say -- but stock don't ordinarily or regularly get "cut in half". 10% is considered bear market territory... and 20% is huge... and then that's what you'll learn by sticking with the reading of the thread -- you'll be averaging down and buying more shares when the stocks are low as compared to when they're higher priced. Trust me - stick with it - and you'll get a handle on all of how that looks.


Sixth -- Again - if you stick with the homework here - a lot of how you choose stocks -- is explained in the thread. It's really basic basic thinking - not rocket science -- and will serve you well especially given your age. You'll learn about total return -- dividend investing - investing in things you can understand and or use or recognize the companies that you do business with.

Glad to have you on board!


And don't sell the car -- but do share the "expense" with the "investing" side -- and you can do both...

[WSSix]

Originally Posted by redefined

Back to reading and many thanks to you Greg. Sadly since I don't have the buckets and buckets of money that some do, when I get into the mood of investing and saving it makes me want to sell everything and just save save save. '68 Camaro for sale? Haha, noooo!

Since that's the case, spend your money on building the brakes and suspension and not replacing a good engine with another good engine that just happens to make more power. You're in the ATL metro area. You will never be able to truly run with the power guys in the area so be cooler than them. A thumping 68 that can handle will turn more heads than an M5 and be way more unique.

Concentrate on maxing both you and your wife's Roths out. Until you get a better understanding of stock selection etc, you can have the money in a targeted retirement account within the Roth IRA. Do you know what the money in your Roth is currently being invested in?

Good luck. Glad you're getting something out of this thread too.

[Sieg]

Originally Posted by redefined

I'm 30 yrs old and have a good head on my shoulders as far as money goes.

That's all you need!

I'm 55 and committed to investing in 1999. Though I didn't have the wisdom shared in this thread to save me from a few mistakes which when you apply compounding to those losses it would make a substantial (probably $50K) difference to my current portfolio.

You might consider opening a Schwab or other account and buy a few shares (10 or so) of a few solid name dividend stocks in different sectors reinvesting dividends just to get your feet wet and give you a feel for the game so to speak. Then watch what happens on a small scale to get you familiar and comfortable with the procedures.

Combine the additional 10 years you have on me and the knowledge shared here and you'll be looking good at age 55........if you don't get greedy!

[redefined]

Years ago I messed around with some trading and had a Scottrade account. Nothing is in it that account now, also have Fidelity and Vanguard but the Fidelity will be merged over into Vanguard shortly - for independence related work reasons. That being said maybe I'll open one up here, thought I'm not sure of any local - doh! I know there are both Scottrade and Fidelity close ha.

Greg do you pay attention to the P/E much when you're looking for a new stock? Or even though it gives a sign into what the investors are thinking is it the same as 'water cooler' chat at the office, if the P/E is to high you might be to late? Or is P/E more for the day trader type?

Oh and my current Roth IRA is in - American Funds The Growth Fund of America A (MUTF:AGTHX) with the following the top 10 holdings (most don't fit the mold of what's talked about in this thread - no dividends!):

Security Net Assets
Gilead Sciences Inc (GILD) 4.13%
Amazon.com Inc (AMZN) 4.00%
Google, Inc. Class A (GOOG) 3.36%
Home Depot, Inc. (HD) 2.36%
EOG Resources (EOG) 2.05%
UnitedHealth Group Inc (UNH) 1.61%
Philip Morris International, Inc. (PM) 1.53%
SOFTBANK Corp (SFTBF) 1.50%
Nike, Inc. Class B (NKE) 1.46%
Comcast Corp Class A (CMCSA) 1.42%

WSSix - that's the problem, it doesn't NEED anything! It has suspension and motor and... and.. and.. haha. It just doesn't have everything I WANT done to it. I think what I'll end up doing for now is ditching the leafs, even though aftermarket upgrades, for a 4 link and mini-tub along with a good tune for the motor/carb and call it a day! For now at least. We need/want to build a new house within 3 years that will have a nice workshop/garage so that's #1 on the 'spend money' list!

But back on topic!!! I just sold a set of wheels I had sitting around in the garage and currently have one of my guns for sale. Soon as that sells maybe I'll toss it towards some of these stocks that have been talked about here and use some on the mods mentioned above.

[GregWeld]

American Growth (AGTHX) - the mutual fund you mention you have --- has a 5.75% FRONT LOAD --- which is a BS word for "commission". Gawd I hate Mutual Funds... and the horse they rode in on.


And it had a pretty good year this year -- however - it's 10 year average is only just that - average - @ 7.94%


It's not a bad fund -- it's just average -- and in a bad year such as 2008 - it was down damn near 40%... but everything was crushed then so it just went along for the ride.


RE: P/E -- that's just ONE metric.... and is rather useless IMHO and that's why what's the most important metric you'll hear me beat into everyone around here is TOTAL RETURN -- who cares how it got there and why and what all the other pretty little numbers are ---- the big question is DID I MAKE MONEY ON MY MONEY AND IF SO - HOW MUCH. If you have a 5 year Total Return number that's over 100% --- you doubled your money in 5 years.... That's an important number.

[redefined]

Where do you see a companies Total Return?

For a 401k/Roth through an employer it seems the only options are mutual funds, pick one, am I wrong? Vanguard is the one I'm in the process of signing up with. Not sure I see another option other than funds/trust/bond.

I also use a Fidelity AMEX credit card. Every looked into it? It's nifty, instead of getting points that you can blow on the newest iPad or Skymiles program it places money directly into your Fidelity investment account. The more I spend the more I invest in myself! yay!

[GregWeld]

Originally Posted by redefined

Where do you see a companies Total Return?

For a 401k/Roth through an employer it seems the only options are mutual funds, pick one, am I wrong? Vanguard is the one I'm in the process of signing up with. Not sure I see another option other than funds/trust/bond.

I also use a Fidelity AMEX credit card. Every looked into it? It's nifty, instead of getting points that you can blow on the newest iPad or Skymiles program it places money directly into your Fidelity investment account. The more I spend the more I invest in myself! yay!

I use Schwab and they have a page for it... not sure where your accounts are or where you could see that very important historical information but I'd ask someone wherever you hold accounts -- and or have online availability.