Investing 102

[SSLance]

I never meant to suggest that one should not invest to make money...just because you'll have to pay taxes on the gain. What I was trying to get at is the result of whatever happens at the end of the investment should be figured into the total ROI.

The other part of my post was in regards to how to figure out the value of an investment, any investment. And what really drives the value of said investment up or down?

I was mistaken on what I was thinking about Estate Taxes. For some reason I forgot that the Tax Act of 2012 extended the 5 million dollar exemption on estates. For a while there it was looking like it was going to revert back to 1 million dollars. That takes Estate Taxes out of the question for the most part.

[gearheads78]

So how do you select your stocks in a market like this?

I have about 20K of dead money in old 401K that I am planning on rolling to to a investing 102 type of IRA but after a solid week of research in my spare time I am lost. Everything I look at has a great 5yr track record. Most are at or close to the all time highs. I know you should not try to time the market but should I try to wait for at lease a little pull back?

I so wish I knew all this 10 years ago. I had a small porfolio owned about 6-7 stocks. I don't even remember what they all were but I do remember having $3000 each in Exxon, Amazon , and Apple I didn't even know what I was doing just coppying from advice from a guy at work. I sold it all in 6 months happy I had made almost a grand.

[GregWeld]

Joe. - there's never the perfect time. And if you've read this thread you'd know about the evil little man that takes the market down 15 minutes after you've just bought. You can count on that happening!!


Here's the real deal though. Take a stock that's been around for awhile. Let's use
Exxon (XOM).... Hit up google finance and explode the chart to max... That squiggly line is a zillion ups and downs... And that big dip there in '08 was this last "Great Recession" ---- that was the time to buy in anyone that can read this lifetime.... But disregard that and what I want you to see is that regardless of when you bought in the last 30 years... It's higher than when you bought. That's the beauty of time - and this time includes the time you're going to spend in retirement! So how many years until you retire.... And then how many years do you plan to live in retirement? If it's more than 5.... Just get in and start collecting dividends.

It's like waiting for the next greatest tv to get bigger and cheaper. If you're waiting for that you're not enjoying watching shows on a killer tv right now... You'd just be missing out.

Originally Posted by gearheads78

So how do you select your stocks in a market like this?

I have about 20K of dead money in old 401K that I am planning on rolling to to a investing 102 type of IRA but after a solid week of research in my spare time I am lost. Everything I look at has a great 5yr track record. Most are at or close to the all time highs. I know you should not try to time the market but should I try to wait for at lease a little pull back?

I so wish I knew all this 10 years ago. I had a small porfolio owned about 6-7 stocks. I don't even remember what they all were but I do remember having $3000 each in Exxon, Amazon , and Apple I didn't even know what I was doing just coppying from advice from a guy at work. I sold it all in 6 months happy I had made almost a grand.

[GregWeld]

Originally Posted by SSLance

I never meant to suggest that one should not invest to make money...just because you'll have to pay taxes on the gain. What I was trying to get at is the result of whatever happens at the end of the investment should be figured into the total ROI.

The other part of my post was in regards to how to figure out the value of an investment, any investment. And what really drives the value of said investment up or down?

I was mistaken on what I was thinking about Estate Taxes. For some reason I forgot that the Tax Act of 2012 extended the 5 million dollar exemption on estates. For a while there it was looking like it was going to revert back to 1 million dollars. That takes Estate Taxes out of the question for the most part.

When I read your posts --- what I get from you --- is that you're thinking way too much. You're TRYING to make investing complicated. It is NOT.


10 million for a married couple -- since in most states the "estate" is split evenly right down the middle… each has the ability to do a pass through of 5 million… The problem comes with the total gets passed down to the next generation. And then that's when trusts come into play. Again --- this is NOT complicated and if you have that kind of money then that's what lawyers are for… A person doesn't have to know about it or lay around thinking about it - you just take the issue to the proper people - and they figure it all out and give you some simple options. Most people don't have an inheritance tax issue.


Investing is not about taxes -- it's not about inheritance - it's not complicated… it IS about putting money into investments (whatever that choice is) as early and often as a person can… and allowing time to compound the money. Trying to avoid this - or plan down the road for all the what if's is a complete waste of time. By the time you're rich and living off your investments -- the rules will have changed twice or more anyway…

[SSLance]

Originally Posted by GregWeld

you're thinking way too much

100% error free post

OCD is hard to live with, trust me on this.

[GregWeld]

Originally Posted by SSLance

100% error free post

OCD is hard to live with, trust me on this.

By the way -- not picking on you or arguing or anything of the kind --- BUT LOTS AND LOTS of people read these posts…. and what this thread is about is SIMPLICITY in a simple easy to understand investment approach. As people get more money... then... by that time they will understand the "market" and will actually have enough that perhaps they'll be looking to diversify into other types of investments -- other as in -- rental income properties - or stocks etc.
That's an entirely different issue. Most folks aren't there yet… what I'm trying to do is to get them there… without over thinking it… or making it scary… etc.

Some folks that started to soak this all in back when the thread was just beginning (THANKS WSSix for starting it in the first place!!) -- already have seen what this simple easy to understand approach does for them. They've actually even had a couple of "dips" in the market and have also seen that there was no need to "cash out" just because their stocks were down a couple bucks a share… and in fact -- some even added to their positions during the dips -- and now are feeling quite "savvy" having done so!!


I understand where you're coming from Lance…. and everyone has their own situation… there's more to investing than there is to making horsepower… but this thread is about just getting started and learning some real basic "walk before you run" ideas about investing.

If I shared all the investments I'm in -- and all the tax implications - and all the inheritance and trust stuff I've got going on… or we went into detail on every single persons issues --- NOBOBY would get started at all… AND THAT WOULD BE THE BIGGEST MISTAKE OF THEIR LIVES….

[66fury]

wow, i am grateful to have read alot of this thread but i still feel like i dont know the first thing i should do about my situation.i know i need to save and get any money i have to work for me.i am sure alot of readers are in my shoes but how does a 47 yr old guy who has no debt except for a mortgage,married,2 kids(1 getting ready to go off to school and 1 still in diapers,makes 90k+(1 income currently),with no savings possibly figure out a way to get ahead.ive been employed my whole life but can never get ahead.now that im married its impossible to save a dime.i was out of work this yr for the first time in my life when i parted ways with a business partner who screwed me out of 6 yrs of my life with nothin to show for it and i had just enough in savings to get by until i landed a new job.again,i should be thankful i had some money to make it by and i landed a job making 20k more.yippee!!! you would think with no debt it would be easy but it seems any money saved gets taken for some emergency .i guess i should be grateful that i have savings to spend on things like house and auto repairs that are musts but life is running out and the future seems bleak and i dont want to work till im dead.i live a humble life and do not live beyond my means,.i dont drink ,smoke or gamble, so where does it all go?maybe gregweld could offer some advice.

[GregWeld]

Originally Posted by 66fury

wow, i am grateful to have read alot of this thread but i still feel like i dont know the first thing i should do about my situation.i know i need to save and get any money i have to work for me.i am sure alot of readers are in my shoes but how does a 47 yr old guy who has no debt except for a mortgage,married,2 kids(1 getting ready to go off to school and 1 still in diapers,makes 90k+(1 income currently),with no savings possibly figure out a way to get ahead.ive been employed my whole life but can never get ahead.now that im married its impossible to save a dime.i was out of work this yr for the first time in my life when i parted ways with a business partner who screwed me out of 6 yrs of my life with nothin to show for it and i had just enough in savings to get by until i landed a new job.again,i should be thankful i had some money to make it by and i landed a job making 20k more.yippee!!! you would think with no debt it would be easy but it seems any money saved gets taken for some emergency .i guess i should be grateful that i have savings to spend on things like house and auto repairs that are musts but life is running out and the future seems bleak and i dont want to work till im dead.i live a humble life and do not live beyond my means,.i dont drink ,smoke or gamble, so where does it all go?maybe gregweld could offer some advice.

Sorry that there's not much advice to give here… except that if you don't have any left over money each month to SAVE --- then you indeed ARE living above your means. That doesn't come out right --- and isn't meant to embarrass or put you down… but many people make far less and live on far less… (not saying they're saving anything either!).

I do have a best friend -- he and his wife NEVER made 100K COMBINED - and they retired millionaires. They saved 30+% of their salaries beginning with their very first paychecks and never stopped saving. The years went by and the money compounded a few times. They're now enjoying their travel trailer and heading down to sun country like typical snowbirds.

Only since you mentioned my name --- and I realize that I contribute a lot in this thread (as far as post count goes) but I don't do Dear Abbey… I'm not a personal financial planner… I just post in here like I do about cars etc… I help when I can with very general information. Trying to fix your finances so you can save is not something I can do…. BUT there are financial planners that you should seek out and have some discussions with. Many are free of charge for the first visit or two… and perhaps they can take a look at what you've got going on and may offer some insight.

[SSLance]

When I was a senior in high school, I did COE I think it was called, basically I went to school a half day and worked the other half day. One of the classes I took to be in this program required us to bring our paycheck stubs in and keep a budget accounting for every single cent of that paycheck...for our whole senior year!

Ever since then, I have kept very good track of my finances...and it has been invaluable to our savings. If you don't know exactly where your money is going, you won't know how or where to slow it down.

Not sure if you have ever done a budget 66Fury, or if you keep your finances on your computer...but Quicken is a GREAT tool for this and is pretty cheap and easy to run. I tell people all the time how much this exercise back in high school helped me to manage my finances. Especially when it came time to get "creative" with my bookkeeping if you get my drift... Could you imagine telling your high school teacher where every dollar you spent for the whole year went?

[66fury]

thanks for the replies and i didnt mean for anyone to fix my problems. given my situation i was curious to where i could start to build a financial future.i hated to call out gregweld on this,sorry to put you on the spot.i know people live on far less and manage to save more but even living my simple life the everyday things that are daily needs are so damn expensive that im stuck.i know people do it ,i just dont know how.i guess my family could go without food and clothes and we could walk everywhere,turn off a/c ,read by candles and so on and so on but i dont think those are the things that others have done to get ahead.every little bit helps and i do watch every dime as im putting it in the hand of the line of people with their hand out taking it from me.ive worked hard all my life and have nothing in the way of real savings and cant figure how others do it.im not so worried about my future ,i want to make sure i leave something to my 2 yr old before i die.