OT: Is now the time for a newbie to Invest?

Start saving early, even if it is small amounts. Let time & interest work for you. Be consistent. Pay yourself first. Start by saving up a cash cushion first. Some recommend a minimum of 6 months of income in cash reserves. If investing in the market, do mutual funds and diversify ( wait until it stabilizes). Just keep plugging away at it. Take it from someone on the other end of the timeline.

Make it idiot proof, and someone will make a better idiot....

 

Thanks a bunch Norm!

99% of SU problems are Lucas electronics

 

I couldn't find the article, I think it was also in Forbes 10 or so years ago (my dad bought me a subscription for several years just to get me thinking about investments and savings and I maybe picked up a few things by accident).

these aren't it, but they can help you to see the power of compound interest in action:

http://www.ncnblog.com/2007/11/09/what-if-you-make-maximum-retirement-contributions-for-20-30-40-years-roth-ira-traditional-ira-401k-403b/

and here's another one that talks about it: "This retirement savings example shows us that even without the benefit of Social Security, a 25 year old would need to place roughly half the amount that a 55 year old would each year into a retirement savings account to reach their retirement income target."

http://www.money-zine.com/Financial-Planning/Retirement/Retirement-Planning-in-Your-20s/

Hope this helps,

Norm

Unfortunately we are making history now, The problems faced by the worlds economies are unlike anything we have had before. Take Iceland a failure of the whole countries financial system, they just don't have the money to bail out the banks so they are letting them fail. Most don't believe we have seen the worst of this yet.

All I can say is that if capitalism is going to survive, and lets hope it does, invest in things folks HAVE to have, no auto stocks, no bank stocks, buy oil, gas, electricity, mainstays of life that have to be purchased. The market may drop another 2000 points but you are young enough that a 5 year downturn is not going to hurt you. At some point (lets all pray) we will all be kicking ourselves for not buying stock A or B as its up X amount of points from X date. I would not be buying anything to do with conspicuous consumption right now.

For what its worth, the stocks that I did pull out of the market when it was at about 11,000 were a mixed bag, I would say 80% of my profits all came from Oil and Gas companies. As for the money I lost, you can thank Lehman bros for that.

cheers. Peter

No more cars left, Westpaminis is now just a memory, Good luck to all those hard working dealers left out there, We can tell you its not easy. We have fully enjoyed meeting all the fine folks we have in the business.

You can certainly talk with someone, but thoroughly research the funds offered thru your employer before having discussions.  Your roomates father may help you get perspective and understanding and give you places to reference in learning about investing for retirement.  Some 401k fund families now have automated target accounts that keep your account appropriately balanced across several types of investments according to your projected retirement date - they rebalance automatically (important to do) and move towards more conservative funds towards the end of your working years as you get closer to retirement.  Talking to an accountant as well might help.  They will likely tell you to attack the school debt early on as well.

SE7EN

Kerr any chance you know where I can find the article you speak of about investing in your 20s?

99% of SU problems are Lucas electronics

 

Thanks for the great advice, I think I am going to talk to some one. My old roomates father has a successful accouting/investment firm in the area I think I'm going to get with him and see what I should do. I guess I need to look at everything including my student loans and crap.

 

99% of SU problems are Lucas electronics

 

historically, the stock market has always gone up over time

the question is how much time to you have? When you are young it means you have lots of time.

Folks looking at retirement in the next few years are hurting, everyone else is just going through a phase that will pass. Even the big reality check after the dot.com bust was mostly history after about 5 years. Heck, even the great depression ('29) only lasted 10 years (less for some sectors, more for farmers since their depression started in the mid-20s). The last, biggest down time in the US economy was during the seventies, which lasted 8 years, but was then followed by some of the most prosperous decades in our nation's history (with some ups and downs along the way).

Buy diversified stuff (mutual funds, you can pick "aggressive" and "conservative" funds and let their handlers sweat the details day by day / year by year to keep on that target for you).

Buying when the market is going down is shown, historically, to be a wise investment because even if you don't buy at the rock bottom price, you are still getting it at less than its previous peak, and when things go up later you get to start from that lower point and see more earnings over time. If you set it up to deduct some from your bank each month you can continue to buy at lower and lower prices as this slump worsens.

For retirement you should buy things you can trust and then forget about them, maybe check their progress annually, if you buy mutual funds with long records and stable management. Forbes publishes a great review of them each year to help you decide which are best for you.

For short term investments there are as many ways to go about it as there are people doing it. My advice to any young person is to focus on retirement first, then, gradually, as they get that well situated and have "extra" money, start dabbling in short term investments (10 years or less). The shorter you go, the riskier it gets so you don't want to bet your food/rent money on it!

I read an analysis that showed that the amount a person invests in their retirement in their '20s, regardless of it being a small amount, can grow over time to be equal to ALL the money they invest in their retirement for the rest of their lives! That was a big wake up call to me.

Norm "this too shall pass" Kerr

Not sure the pros are any better than oneself.  Smith Barney has my IRA down 30%, not that I can touch the dough for at least 6 years....

 

Sail & Drive Fast! Live Slow! Billy Backstay

The answer is yes, but go for a diversified portfolio of stocks, like a good mutual fund, and not the stock of your company.

Keep your company stock in modest proportion to other investments. A well-diversified 401k supplemented with company stock purchases keeps a balance. If you've got 401k employer matching, put in at least enough to earn the full match.  If you can learn to live with "less", invest as much as you're comfortable with.  At your age, time is your best friend in investing, and the earlier you accumulate a strong base for any portfolio, the longer it will have to compound and grow.

SE7EN

One of the savviest I've talked to lately said "cash" when I asked his investment advice in light of recent events... take that for what it's worth...

Bill

Again..Bill's advice is appropriate. One thing you mentioned that raises a big red flag is investing only in your or one company. I only repeat what a financial advisor told me: diversify,diversify, diversify. But you have to believe that there will be an economic infrastructure left in your future. As one mini guy to another...please seek the advice of an expert in finance. Pay the person a reasonable fee and don't seek the advice of someone who is selling investments for a living.

wt

lol good point, but I know some of the guys on here are pretty savvy at making money from money and there mini is there downfall investment. :-)

99% of SU problems are Lucas electronics

 

http://www.minimania.com/web/threadid/94680/msgthread.cfm

 My advice here is the same as on that recent thread... the best advice I can offer is not to go to a classic car list for investment advice. ;-)

Bill

I was out doing some walk downs of some projects with some of my management and my boss and retirement came up and all the guys said thier retirements hopes have been washed away ect ect.. My boss mentioned now is the time for me to buy up everything (me being the youngest guy out here 26).

So my question is, is he right? With all of the economy issues and everything down is now a good time for a young person to start to make a portfolio? Ive just gone from a contract hire to permanent employee so I'm now in a pretty stable place. Once I'm allowed to I will start buying some shares of the company I work for.

What are your thoughts? 

99% of SU problems are Lucas electronics