Investing 102

[GregWeld]

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

[Sieg]

Originally Posted by GregWeld

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 they pay me to wait.

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

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.

[PDXFactory]

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

[GregWeld]

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


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

[Sieg]

Originally Posted by GregWeld

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


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

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

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.

[GregWeld]

Originally Posted by PDXFactory

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

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!

[killer67]

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

[GregWeld]

Originally Posted by killer67

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

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.

[Sieg]

[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.

[RECOVERY ROOM]

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 !!!