 How do I calculate a 401k plan? |
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 What causes the stock market to crash? |
What exactly does the term "crash" mean? Is it when the price of the shares go down too low? And how do they determine the price of the shares?
Additional Details
I still don�... |
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 Stock market question? |
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| ...and know you don't have the brains for trading stocks and such? i've heard ETFs are a good way to go but I KNOW I would never understand it because I am bad at math. Is there a way to ... |
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 Are those commercials "GET RICH FAST" really working? |
like they teach u how to invest and become rich.
i am sure u saw them on tv, they even offer u a night stay ar marriot hotel.
or like another one when they offer u a free flight to florida ... |
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DM | What should I do with a ~$30,000 inheritance? |
I am in my 20s and have never invested before, except for a money market savings account. I'm not sure what to do with this money, especially with the current economic conditions.
Any advice is much appreciated. Thanks!
Additional Details
Thanks for the answers so far! Just to address a few things that have come up:
I already have a college degree. I don't make a lot of money right now, but I do not have a car payment or credit card debt. I'm not married, I don't have any kids, and I don't plan to buy a house or any other major purchase anytime soon. |
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Jeanne R
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Congratulations on starting off your adult life being debt free. As long as you can live below your income, you will never have to worry about money.
Start off by opening a Roth IRA and putting in the maximum $5,000 contribution for 2008 and then contribute another $5,000 in January for 2009. Investing that money in growth stock mutual funds with a good track record of at least 10 years is a good place to start. Since the market is down, it will be like buying stocks on sale. That money will grow tax free until your retirement and give you a big leg up on your future.
As to the other money, a money market savings account is a great place to park your money while you educate yourself about investing. Do some reading on personal finance. Ed Slott, Ric Edelman, and Ray Lucia have all written some very good books on personal finance and investing. Interview a fee-only financial planner or three and see which one and which plan you are comfortable with. Take your time and don't invest in anything that you don't understand. |
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Mr.Pint
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Well for me to answer your question, you need to answer mine. Do you expect the United States market to stay in the 8000s in the next few years? If you think it can return to its 10k-14k days, then invest it in a stock with low debt/cash on hand/cash flow positive. IMO it will go back to the low 7,000's very soon and play around 7k-9k for awile, until a year from now don't expect to see any returns. But longer term, we should be fine. |
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CARL L
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The trick to this question is to know what your goals are. You indicate that you want to invest this money, but its also necessary to know what you want to come of that investment. I.e. Are you saving for a house, a family need, or perhaps retirement?
The reason that's important is it determines your time frame. Short-term, investments need to have less risk and more liquidity. Long-term, like for retirement (especially since you are a babe of 20), you don't need liquidity and simply want to maximize your returns on historically favored trends (no twenty year period of stock market investing has EVER produced negative results). I'll continue, assuming you're going for the long-haul.
But first, make sure your present financial condition is clean. You should pay off all debts like credit cards and car payments. No need to pay others investment profits.
The next thing to know is your financial level of expertise. Since you seem to indicate its very little, you probably want to avoid individual stocks and stick with mutual funds. Maybe over your lifetime you'll educate yourself and gain enough experience to change that, but its probably best for now. So open up a brokerage account, and deposit whatever money you have to invest. Make sure your cash balance automatically gets a good money market rate until you use it.
Now, the next steps will be to chose mutual funds (there's only 30000 or so of them so that topic might require another post). But you'll keep a couple of principles in mind: 1) You will dollar-cost-average in. That means you'll only invest part of your money at a time, and increase your investment periodically. This protects you from the ups-and-downs of the market, insuring basically that you'll get an average price. 2) You will seek DIVERSITY, making sure that your investments are spread across different asset classes and sectors. People have won Nobel prizes proving that this is VERY important to your results. And the average market return is all you're really after with forty years or so to run on your investment.
Don't be afraid to go to a library and find a few good books on investments. Its AMAZING how interesting something like this can get when its YOUR money and not just a dry, academic subject!
Good luck! |
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mentos_69
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First and foremost, pay off your debts. |
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Serge Polyak
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Before you start investing, you should sock enough money away in your "emergency fund". An emergency fund should be roughly equal to your 3 to 6 months living expenses. This sum should be kept in very liquid assets such as money markets.
Next, think about your goals. If you have a purpose, and are determined to reach it, you can get some tax breaks. I am thinking retirement. It is never to early to start saving for your retirement, and the sooner you put something down there, the more your money could earn for you. I would open an IRA account, and contribute maximum for this year (2008) and next year (2009). This way you will be saving on income taxes now and on capital gain taxes in the future.
Even though a person in their 20s should be really highly risk tolerant, I would start very slow now because of market turbulence. You should not buy more than HALF the stock that is recommended in your situation during "normal market", i.e. if your risk tolerance allows you to have 80% of stock and 20% in bonds, go with 40% in stock instead, for now.
To find your risk tolerance, and get your financial goals straight, try this free analytic tool: http://www.ameri-financial.com/finance-test/personal-finance-test.html |
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thomas p
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First pay off any debt that you may have. School debt, credit cards, etc. You might consider a utility stock such as Empresa Nacional, symbol: EOC. Trades at 35.56 per share. Brazil has a bright future and this stock looks like safe way to play that economy. |
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jeff410
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Use it for an education, if you dont already have a degree. Or open an IRA. You can put 5,000 dollars in per year, as long as you have that much in earned income. And consider mutual funds about 20 percent in bonds and 80 percent stock fund, mainly small caps and aggressive growth funds as long as you dont need the money for at least ten years. |
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JohnGalt
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Without knowing your whole story, it is hard to make a decent suggestion. But be VERY cautious, sinc e this is presumable a once-in-a-lifetime event. You need to be more cautious than if you could save this much out of earnings. For now, put it in yourr money market. Think about investing in yourself so that you can boost your lifetime earnings (school, specialized training, tools, whetever). And you could wait a few years too. This may be the money that helps you with your first career change. |
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TheOnlineManual.com
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Do as much research as you can about investing. If you have a financial advisor, set up an appointment to meet with him/her. If not, go in to your bank and ask to speak with a financial advisor. The phrase of the day is "Cash is King". In other words keep your money in your savings account. I wouldn't recommend buying any stock without expert advice, but I would recommend educating yourself as much as you can on investing because when this economy turns around there is plenty of profit to be made. Read books on Warren Buffett and investing. I enjoy reading kiplinger magazine as an investing magazine. |
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