2006-07-20 07:50:53 · 4 answers · asked by nameisnick 1 in Business & Finance ➔ Investing
First, I would make sure you have at least 3 months salary saved up in the bank or in a money market fund for an emergency fund. (Some people say 6 months.) Financial disasters like getting layed off or sick happen to all of us.
Second, I would pay off all high interest debt. Pay off everything you can except the house mortgage and student loans. (Consider paying off these too, especially if the rate is high.) Paying off debt is one of the best investments you can make. You will have more money in the future because you won't have credit card bills to pay.
Third, if you have money left, start investing in stocks, bonds, and money market funds. You want to buy a diversified portfolio of stocks, as individual stocks are too risky. For most folks this means buying mutual funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low cost funds. If you are like most people you will invest part of your money conservatively, in money market funds and bond funds, and part aggressively in stock funds. Vanguard.com has an on-line questionnaire which will give you an idea how aggressive you want to be.
Investing in a mutual fund IRA for retirement may give you an income tax break. Talk to your tax adviser. You may also be able to invest in a stock mutual fund via a 401K plan at work. Buying a house instead of renting will make you a lot of money in the long run. If you feel you have what it takes to be a landlord, consider buying rental property.
Believing advice you get on Yahoo answers can be risky, so read these websites for further information. I don't agree with everything they say, but most of their information is good. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.
2006-07-20 09:14:12 · answer #1 · answered by Anonymous · 0⤊ 0⤋
This question is almost so opened ended as to be unanswerable.
However, broadly:
Determine your goals in quantifiable terms. Determine both assets and their required future values and present and future liabilities and their funding sources.
Shop against the universe of available investments. A very large universe makes for a more efficient use of resources. Select an option, such as a 90 CD at your local bank as your default option. Then begin the process of selecting investments. In order to continue in your universe, it must beat this default, any item failing it is excluded. Continue narrowing your universe by increasing the standard as better and better investments are found. New choices must beat the best available discovered choices.
For analytical rules, I suggest starting with "Security Analysis," by Benjamin Graham or its more recent successor book by the same name but updated. You should be able to find both online and quite likely at a large bookstore.
2006-07-20 14:57:05 · answer #2 · answered by OPM 7 · 0⤊ 0⤋
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2006-07-20 15:56:41 · answer #3 · answered by Tarumi 2 · 0⤊ 0⤋
buy gold.
2006-07-20 14:54:03 · answer #4 · answered by Mox Nix 2 · 0⤊ 0⤋