How do I get my foot in the door with stocks and IRA's? I want to start a retirement fund; however, I don' know where to start!
2006-06-22 09:34:20 · 9 answers · asked by sshurly17 1 in Business & Finance ➔ Investing
You ask a question that raises a lot of questions.
Do you have any short-term debt, like credit cards? If so, pay them off. If you're paying something like a 21% interest rate, that's an instant tax-free 21% return on your investment right there. And STAY out of debt!
Do you have a job? Does your company offer a 401(k) with matching funds? If so, contribute to the 401(k) up to the maximum match. Free money is good.
Do you have an emergency fund? If not, establish one. You don't want all your efforts at retirement undone by unfortunate event, like a few months of unemployment.
If your company doesn't offer matching funds, then an Roth IRA is the next best thing. Tax-free growth is good. Fund it to the maximum ($4000 this year for most people). You can get good no-load, low-cost funds from Vanguard, T Rowe Price or Fidelity. If you need help in deciding what fund(s) to buy, click on my name and drop me a line.
Before you commit a nickel to a financial advisor, get yourself an elementary education in personal finance. Believe this: no one is going to care as much about your money as you are. No one is going to watch it as closely as you are, especially someone who's got multiple accounts to look after. So get yourself a foundation, so you'll know if someone is actually giving you good advice or not. Personally, I recommend "The Only Investment Guide You'll Ever Need" by Andrew Tobias. It'll give you an overview of everything you need to know (stocks, bonds, real estate, insurance, etc.). Then you can decide if you need a deeper education in anything. Good luck!
2006-06-22 12:48:47 · answer #1 · answered by VinTek 7 · 2⤊ 0⤋
Do you have a job? Does it have a retirement plan at work you can invest in pre-tax (before Uncle Sam takes his cut)? If you do, fund that first (talk to your HR person).
The next step, which you can do on your own is to find a good mutual fund. Yes...start with a mutual fund as $15K is too little to do a safe and diversified job. Individual stocks take at least $50K and are a lot more work to manage. A mutual fund is professionally managed so once you have found one with an investment policy you like, you shouldn't have to monkey with it - just keep adding to it.
As to how to pick a fund...well..you have two choices and I recommend the first as the better of the two ideas:
1. Go buy a good book, something like "Investing for Dummies," is actually a great start. You need not go fancier than that. You need the basics now so you can get right to it and not spend months trying to get in deeper than you need to be. (one warning..Suze Orman is an idiot so don't buy her books).
Once you understand the risk versus reward ratio, the purpose and value of asset allocation and diversification, and how to evaluate fund expenses, you can begin to pick a fund. Websites like Morningstar.com or Smartmoney.com will help you narrow your options.
Then you should study up on Personal Finance, which is a broader topic that includes insurance and other types of cash management as well as investing. This way you can learn how to build wealth and protect your wealth from the evils that await it like taxes, death, kids and other potential destroyers.
Option2:
Hire a financial consultant or advisor. This is faster and will get the job done but I recommend option 1 over this because small investors don't get a lot of quality attention AND even if you do use a professional, and I do advise that at some point you do work with a GOOD financial planner, it helps to have a basic education already in place. That way you better understand the recommendations and can better assess good advice.
2006-06-22 09:45:04 · answer #2 · answered by Lori A 6 · 0⤊ 0⤋
If it has already been taxed, you should check into a ROTH IRA. Your local bank should be able to assist you with opening the account without having to pay an investor big bucks. With a ROTH, you've already paid taxes so when you withdraw at retirement age, you are taxed again and with a ROTH you have the availability of taking out loans against it, but when you pay it back - with interest - you are paying the interest to yourself. If you want a real safe route, there is always the CD option, but the interest rates are usually pretty low.
2006-06-22 11:26:49 · answer #3 · answered by Just Me 3 · 0⤊ 0⤋
First, please companies that you're interested in investing in.
Second, ask other people about the companies (more fifty people) for their opinions. Third, check out 15 - 30 companies that specialize in stocks & IRA's, get the info, make no promises with them, check w/ tax attroney about any course of action. Fourth, review info from 15 -30 companies, find 1-3 companies that you would like to do business with. Fifth, deciced how much you need to put in each, age plays a strong factor as well as how long you plan to stay at your current job. Sixth, please do both stocks & IRA's as your best option in today's world.
2006-06-22 09:48:12 · answer #4 · answered by magicwithu 1 · 0⤊ 0⤋
The safest way would be to put in in mutual funds that yield anywhere from 10-20%. Put $5,000 each in low risk, medium risk, and high risk mutaul funds and let it mature until retirement. It should have matured enough by then for a comfortable retirement
2006-06-22 09:39:34 · answer #5 · answered by MSUSpartan117 2 · 0⤊ 0⤋
save up wit pennies like old people do
2006-06-22 09:37:21 · answer #6 · answered by hollabak_at_me 4 · 0⤊ 0⤋
There is not enough information to answer your question.
Do you have a job?
2006-06-22 10:37:10 · answer #7 · answered by Anonymous · 0⤊ 0⤋
Give it to me, lol! No seriously, you can talk to your bank.
2006-06-22 09:37:10 · answer #8 · answered by Christina 2 · 0⤊ 0⤋
call your bank, they will help you out.
2006-06-22 09:38:54 · answer #9 · answered by xadralix 2 · 0⤊ 0⤋