I'm 22 in college and I want to retire when I'm 40. I have $3,000 to invest?

right now what is the best investment stradegy for me to use so that I can retire at 40. I'm thinking about ETFS but I need to learn more about it before I invest.

Do research on high quality stocks, assess how much it worth (calculate intrinsic value) and invest within acceptable risk tolerance (margin of safety). Don't forget to reinvest your dividend as well. You'll get double 'compounding interest' effect

Step-by-Step Stock Investing for Beginners
http://www.stock-investment-made-easy.com/
http://answers.yahoo.com/question/index;_ylt=As61UR4DWXZnVDIVK6se6XLty6IX?qid=20070717183111AAk8IIS&show=7#profile-info-kFApW5uJaa

You will not retire at 40 investing in ETFs. Virturally impossible unless you pump about $22,000 a year into your retirement account. Let's assume for a moment that you are a very assute investor and can really learn to pick stocks and can generate 15% return annually. Possible but difficult. Even then you will need to invest $13,200 each year. Let's assume that you are the next Warren Buffett and can genereate 20% return annually. Extemely difficult. You will have to invest $7,800 annually.

save save save dont go out an blow your stuff use the monee wisely there is a difference of needs an wonts a new coat if you dont have a coat an then thats a need im 17 an have 12,000 or there about saved up 4rm cuttin grass working every pay chck i get i take out a persentage an save it an i dont ever take monneee out of the savings account

The problem with ETFs for your case is that you will probably want to add a little money every month (a practice that is called "dollar cost averaging"). That would mean buying ETFs frequently, which would produce transaction costs that you can avoid if you operate with ordinary no-load mutual funds through an account in a company such as Vanguard, Fidelity or T. Rowe Price. Whatever account you use, check its tax stance: you may prefer this investment to be in a tax-advantaged account such as a 401(k) if you are a U.S. citizen. Also check if there are extra expenses for the mutual-fund accounts, such as low-balance fees or extra charges for non-U.S. citizens. If dollar-cost averaging is managed well, an ETF portfolio in an ordinary brokerage account can be less costly for certain cases.

Be it through ETFs or mutual funds, you need to build a diversified portfolio. To start, I recommend allocating most of the capital, if not all, in company stock, because your investment horizon is long term. If the market goes down, there is enough time for it to recover. As your planned retirement approaches, shift the allocation towards less-volatile instruments such as bonds. Real-estate and commodities don't look too good and I don't think the amount invested is high enough to justify diversifying through those alternative asset classes.

Regarding country allocation, you may want to more-or-less reproduce the world economy's capitalization but with a bias towards your own country or region (as I presume it is where you will be spending the savings). The reason for this bias has to do with your future expenses being related to the performance of your country's markets. If you are living in Germany and your investments are mostly U.S. assets, a crisis in the U.S. would make your savings too low in comparison to your expenses, which wouldn't be the case for U.S. citizens as their expenses would also go down (measured in euros).

You may also want to allocate a portion on emerging markets, which offer potentially-higher returns (but higher risks too, I'm afraid) and small/medium capitalization companies. If you are a U.S. citizen, the following allocation looks adequate (please receive this opinion with caution, I'm not a certified advisor):

* 25% in a S&P500 index (U.S. large cap), such as VFINX (mutual fund) or IVV (ETF).
* 20% in small cap U.S., with TRSSX or IWM for example.
* 20% in developed-world ex-US large cap index, such as VFWIX or VEU.
* 15% in developed-world ex-US small cap, with VINEX or GWX for example.
* 20% in emerging markets, with VEIEX or VWO for example.

The other fund families have similar offers, always look for no-load funds with small annual expenses. You may want to consider broader funds, such as Wilshire-5000 indexed which include U.S. large, mid and small cap, if you need to keep the number of funds very low to lessen costs (transaction ones if you invest through ETFs for example), but make sure that higher fund fees don't cancel that advantage.

Gradually gear the allocation towards bonds, to end with about a 40% stock and 60% bond distribution at the time of retirement. By the way, why do you want to retire at 40? You will be so young! Anyway, if you change your mind by then, I guess having some nice savings won't hurt.

Apart from augmenting the bond participation, you should regularly re-balance the portfolio, which means returning it to a planned distribution, as it will drift away because of differences in the price movements of each security. For example, if U.S. stock falls and non-U.S. stock rises, you will have too little of the first in relation to the latter. So either buy only those funds that have too-low an allocation when you invest your monthly savings, or sell from some funds and buy from others every 18 months or so, to return to an adequate allocation.

A remaining issue is knowing how much you need to save each month to accomplish your goals. I think there are some free tools on the Web for calculating that (if not, I should program one for my blog :) ). Bear in mind that the portfolio may return an average of a 7% annually net of inflation (don't forget to consider the taxes you might have to pay on that).

I doubt that you will be able to retire after only 18 years of savings or less, but investing and planning in advance are always good ideas. If your plan is not realizable, better to know it as soon as possible, and you may find that with a few tweaks it can become so.

Hope it helps.

Read the book THE AUTOMATIC MILLIONAIRE by David Bach. It's brilliant and answers your question on many levels.

Planning for retirement at your age will ensure yours will be very comfortable. It's all about compunded interest. Take your time. Make a plan. Stick to it and diversify.

I would tell you more but I really want you to read the book as it will serve you better in the long run.

I erred in my twenties by spending the money I saved and then had to find double digit investments and programs such as http://www.goodshephard.free1up.com to get back on track which is still good but time is a trusted companion for compounded interest to ensure long term wealth.

You are very wise. Read the book.

there are lot's of groups here on Yahoo about investing... I'd suggest you join some...

You're going to work for less than 18 years and try to live off your savings for possibly 45 yrs - maybe if you live in a cardboard box the entire time, starting now, and eat garbage out of mcdonald's dumpsters for free. Are you expecting the $3000 to be all the money you will have to invest to be able to retire on in 18 yrs? If you invested that today at 15% (which is 4% above the long term average for investing in stocks) after taxes you would only have $32000 in 18 yrs. Is that enough money to live on for 45 yrs? What about medical expenses? You don't get medicare until you're 65. Or Kids? Or Inflation? Are you expecting to get a job paying $100,000 with 10% per year raises per year right out of school and live with your parents rent free until you're 40? You're just not being realistic.

some ETFs are good but you can easily outperform them by looking into them and just buying the best companies in them.... when you invest in a fund your investing in the losers as well as the winners in that fund....

If you dont have a broker checkout http://www.sharebuilder.com I think they have the best commission rates.

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I think we share a very similar goal. I'm 20 and I'm looking for ways to retirement before I get old and grumpy. I'm glad you haven't invested your $3,000 on softwares that promise big returns, but will always let you down, or attend classes that promises to teach everything, but ends up teaching you the basics.

Assuming you make an initial investment of $3,000.
And every month after that you invest $500. Being able to invest $500 a month is already a very aggressive goal.
Assume a conservative 10 percent return/year
You want to retire by 40. I want to retire before that.

$3,000 x 1.10^18 = $16680.

Each month you put in $500 or let's say $6000 a year.

$6,000 x 1.10^18 = $33359
$6,000 x 1.10^17 = $30326
$6,000 x 1.10^16 = $27569
$6,000 x 1.10^15 = $25063
$6,000 x 1.10^14 = $22784
$6,000 x 1.10^13 = $20713
and on and on....

I haven't even mentioned taxes.
If these unbelievable returns are maintained for 18 years, your return should be less than $400,000. I don't know if you'll have other types of investments which may include 401k and Roth IRA.

If you already own your own house, and is able to cut expenses really low then retiring with that amount isn't completely impossible, but it'll be really hard since you'll face all kinds of emergency needs. If you have a kid or plan to have a kid, good luck.

Chances are you won't even make such good returns on your investments.

ETFs may or may not be the best type of investment for you. If you're interested in discussing other type of investment opportunities. You can email me at nliang@luc.edu

You will need to get a basic education on stocks, bonds, and mutual funds before you venture your money into them. Any of these sources should point you in the right direction:

1) Mutual Funds for Dummies, by Eric Tyson
2) http://www.invest-for-retirement.com has my free downloadable book
3) http://www.investopedia.com has some great tutorials
4) The Boglehead's Guide to Investing

When reading about investing, pay particular attention to the subjects of asset allocation and costs. These are so important.

Invest wisely and Beware of Investment Scam!!!
http://www.sec.gov/investor/pubs/cyberfraud.htm

DO NOT take any offers or click any links from people

that post on yahoo! answers... they are ALL SCAMS.

Great Idea, and you have a great chance of meeting your target by starting early. Definitely don't get caught up in the myth of retirement.

Someone has set up a standard game plan for everyone. It basically goes as follows:
Age 0-5: Baby – Grow Up
Age 6-17: Child – Go to School
Age 18-21: Student – Go to College
Age 22-65: Adult – Work
Age 65+: Senior Citizen – Retire and Die

What a dumb plan.

What most people really want to achieve is ‘Financial Independence’. It is not ‘Retirement’.

Retirement usually means that we are no longer dependent on work for our income and daily living needs. Our income is independent from our occupation.

So what you really want is ‘Financial Independence’ much earlier than scheduled for us in the standard game plan. In fact maybe the game plan we really want is more like:
Age 0-5: Baby – Grow Up
Age 6-17: Child – Go to School
Age 18-21: Student – Go to College
Age 22-39: Adult – Work towards Financial Independence
Age 40+: Financially Independent – Enjoy Life

So now that we have a goal of Financial Independence, we need to set a timescale to reach that by and a means of reaching that goal.

In this context we are generally talking about a savings and investment plan that will give us a sufficient amount of money to live off for the rest of our lives.

We will need to equip ourselves with the necessary knowledge and tools to make this work now.

To be successful we will need patience, discipline, and wisdom. But most importantly we need a plan.

It may prove expensive to acquire that much needed wisdom on our own. Learn by other peoples mistakes. Learn from other peoples successes. Read some books. Visit our local book store and find books that we like and feel comfortable with.

Some of the titles I have on my bookshelf include:
One Up on Wall Street by Peter Lynch
How to make money in Stocks by William J. O’Neil (Founder of Investor’s Business Daily)
The Millionaire Next Door by Thomas J Stanley and William D Danco

Check out web sites like fool.com and yahoo finance.
Investigate trading strategies with a proven track record over 3, 5, 10, and 15 years.

Pick something that we understand, find easy to use and will help us realise our goals. Pick a strategy where we can take responsibility for your investments and be in full control of our capital.

Systems like the Stocks Monthly system are definitely worth investigating once we are up to speed with the nuts and bolts of investing.

buy some shares of EVX. it is heading up.

Well my advise would be to first of all not SAVE SAVE SAVE cuz then god forbid something happens to you and you didnt enjoy your life.

What i do is i take $50 from every paycheck and put it in a money market account. If you do the same by the time you are 40 you will have well over 70,000.00 then with the rest of the money have fun live a good life and try to have things paid off by the time you are 40 like your house, cars, and what ever it is you have financed so that all you will have of expenses will be food, utilities, and HOBBIES =)

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