What can I expect and How can I do it?

Question

Ok here it is. I am about to leave for the navy and will be saving up about 100000 after 6 years and in this time will be aquiring a bachelors degree in Nuclear Electrical Engineering. I expect to be paid somewhere around 100k a year. i want to take that first 100000 and invest it in something and plan to take 50k a year after that and investing it so by the time im about 45 i will have a lot of money. How the hell do i do this where do i start and what can i expect, is this smart? I dont want to be stuck in the rat race of life. im 19 and will make my initial investment at 25.

Answer 1

This is entirely reasonable.

I would recommend opening an online brokerage account (Scottrade and tradeking have low commissions, and you might be able to find something cheaper if you shop around). Just go to a website--it only takes a couple of minutes to open an account.

Then you can either invest in stocks directly, or put your money into exchange traded funds. These are mutual funds that trade on stock markets like stocks. Unless you are really into playing the market and have a lot of time to do research I'd recommend buying ETFs that track the stock market-- two that track the S&P 500 (a listing of the 500 largest stocks in the US) are the SPDR fund (ticker symbol SPY) and the iShares fund (IVV). You can also look online or go to a bookstore to find information on other funds.

The stock market has gone up about 10% a year on average over the long term. If you buy shares in a fund and just sit on them you should have quite a nest egg by the time your 45.

Also I wouldn't wait to put money in until your 25-- if you get an enlistment bonus for signing up with the navy you might sink some of that cash in now. You don't need a really massive amount of cash to open an online account-- a few hundred bucks will do just fine (just make sure to read the fine print of the agreement with your broker if the account is small because some companies charge yearly service fees.)

Good luck.

Answer 2

I know you're going to be busy, but any time you have some time on your hands...get to the base library and get on a computer....go to yahoo finance and read just a little about " investing"... mutual funds and even some stocks can work hard for you while your working hard for Uncle Sam ! On yahoo make up a home- page that includes a " portfolio"...between now and your planned investing date create a " pretend" portfolio of funds and stocks......every time you log on, your folio will show up...should you make changes? how's that energy fund? THIS IS HOW YOU GET READY....when the time comes you'll be ready and confident..BooYah !! And if you get real cocky, you might start putting some real money " on-the-line" earlier than you planned.
P.S. Lotta " down-time" in the military ( Nam vet) use it ! Read a little...learn a lot......and don't be afraid to ask someone, anyone for help or an explanation..( maybe that civvy librarian? or the Admiral's daughter at that other table reading a Jim Cramer book?