I feel a little left behind...?

Question

Im 20, and have an investment account on my own. Im a college student, with no debt, no loans, etc. I have about $5000 saved, and put into a Mutual fund. I have other accounts from when i was a kid with substantially more in them...however... i just get the feeling from some of my freinds that i am a little behind in the game. Is this a good start?... I know that its always "never to early to start" ... but am i behind?... Thanks for any input...

This is a serious question, if you can't say something respectful, then don't add. I guess i've just had enough with snide answers... thank you for those of you who answer with sincerity.

Answer 1

It is never too early to start saving, in fact ‘retirement is one of the greatest cons of all time.

What you really want, what everyone really wants is Financial Independence.

Someone has set up a standard game plan for everyone. It basically goes as follows:
Age 0-5: Baby – Grow Up
Age 6-17: Child – Go to School
Age 18-21: Student – Go to College
Age 22-65: Adult – Work
Age 65+: Senior Citizen – Retire and Die

Retirement usually means that we are no longer dependent on work for our income and daily living needs. Our income is independent from our occupation.

So what you really want is ‘Financial Independence’ much earlier than scheduled for us in the standard game plan. In fact maybe the game plan we really want is more like:
Age 0-5: Baby – Grow Up
Age 6-17: Child – Go to School
Age 18-21: Student – Go to College
Age 22-39: Adult – Work towards Financial Independence
Age 40+: Financially Independent – Enjoy Life

So now that we have a goal of Financial Independence, we need to set a timescale to reach that by and a means of reaching that goal.

In this context we are generally talking about a savings and investment plan that will give us a sufficient amount of money to live off for the rest of our lives.

We will need to equip ourselves with the necessary knowledge and tools to make this work now.

To be successful we will need patience, discipline, and wisdom. But most importantly we need a plan.

It may prove expensive to acquire that much needed wisdom on our own. Learn by other peoples mistakes. Learn from other peoples successes. Read some books. Visit our local book store and find books that we like and feel comfortable with. Some of the titles I have on my bookshelf include:
One Up on Wall Street by Peter Lynch
How to make money in Stocks by William J. O’Neil (Founder of Investor’s Business Daily)
The Millionaire Next Door by Thomas J Stanley and William D Danco

Check out web sites like fool.com and yahoo finance.
Investigate trading strategies with a proven track record over 3, 5, 10, and 15 years.

Pick something that we understand, find easy to use and will help us realise our goals. Pick a strategy where we can take responsibility for your investments and be in full control of our capital.

Systems like the Stocks Monthly system (which has generated an average return of 49%p.a. over the past 15 years) are definitely worth investigating once we are up to speed with the nuts and bolts of investing.

Answer 2

Let's take a little look at this scenario.......a 20 year old college student with no debt and no loans. Well right there you are probably in the top 10% of all college students in the US. That scores you plus one.

Let's see what else you have going for you.....$5000 in a liquid, intelligent investment....your mutual fund. If your mutual fund is not earning you 8% to 12% annually you might invest some time in looking at having part of the money in a stable growth fund and part in a more aggressive small cap, mid-cap or international fund. Regardless, mutual funds was a very smart choice. You are now at plus two.

Is there anything else that puts you WAY ahead of the pack?.....Oh yeah, you have other liquid funds that you have been intelligent enough not to touch since you were a kid. That right there puts you in a huge minority. Depending on the return you are currently earning you might also look to shift these funds into a diversified mutual fund portfolio.

You are not "behind any game" you are light years ahead of most young adults your age. Depending on your interests, time and desire you can always evaluate other investment opportunities later on. You are in no hurry. My only caution is to only invest in areas that you understand. Be particulary aware of all risks associated with any investments. Never be talked into an investment by others....always do your own homework and only invets in something when you are certain that the pros outweigh the cons.

Continued success!

paul

Answer 3

I was leaving a fast food joint a while back and three middle school girls (school promotional shirts on) walked by. Two were razzing the third saying things like "OMG, you are still a virgin? What the h--l are you holding out for? Do it once and get over it! I mean really, like you are waiting for 'mister right', yeah, like that will ever happen."

Don't feel pressed about this. You are on a good path and to be envied.

The basic idea behind investing is this: if you put your money in your mattress, what would happen if your house burned down? If you put your money in a checking account, what would happen if someone stole your checks? If you put your money in a savings account, what would happen if you found another account would pay you better interest? If you bought some savings bonds, would you wonder about corporate bonds? If you bought a stock that paid dividends, what if they stopped paying dividends or what if the price of the stock fell more than the dividends paid and you feel like a fool for not leaving it in the bank? IF--and the ifs can go on and on.

They are choices and comparisons. Sure there are people who make a mint in stocks. There are people who make a mint in casinos. But, in both, there are piles of people who lose. Go with what you know and what you are comfortable with and what fits your plan for your financial future. You don't have to jump into stock trading like some junior high kid who wants to get this virginity issue resolved with some clumsy junior high boy so she won't have the full court press of high school boys pressuring her. Relax. Money is like driving, if you are comfortable with a Honda Civic and driving the speed limit, don't feel like you've failed in life if you don't have a souped up Porsche and drive 130 in residential streets. Frankly, I think you are playing "the game" quite well.

Answer 4

Actually you are ahead of the game, in my opinion, way ahead of the game. Look for something high yielding, for this I SUGGEST credit spreads specifically bear call spreads, this is good offers a high range profitability 70% + sometimes, and also can yield 5-20% a month depending on the risk your willing to take , if market takes a hit, bear calls are perfect, that is what I suggest. Even if you are wrong at direction the trade will still probably be profitable, I will also suggest trading with thinkorswim.com they have great service low fees, and you can earn 70%-240% a year, wheres your trading account at? Can affect returns. -Good Investing----Dan

Answer 5

You'll be fine. You're actually quite lucky to have that kind of cash saved up and you've taken the first step towards being a better investor. Seriously, you taking an initiative to invest and that is superb. I don't know what you mean by "the game," is that life, money management, stocks?

It is NEVER too late to start saving and it is NEVER too late to educate yourself on the subject matter at hand. I've heard of numerous people who get into this WAY later in life, so at 20....don't let your friends get you down.

If you've got to, "Walk slowly, but never backwards."

Answer 6

No, you are not behind at all. In fact, I would say you're well ahead of many of your peers. You are off to a great start financially! Don't let the envy of your friends get in the way of enjoying what you've accomplished, which is quite a lot from what you've wrote. Good luck, and keep saving!

Answer 7

You are way ahead of the Game

GOT MONEY......NO DEBT

there are a lot of people out there that WISH they were in your position.

It's time you got a financial advisor to tailor an investment plan to your needs and risk tolerance. Mutual funds are great, but advice of which ones for diversification as well as a plan for additional investment money should be looked into.

Answer 8

Good questions, cause i feel the same way sometimes. But look at it this way. atlist you are asking this kind of question right.

Well that means you are staying in track, the fact of you feeling alittle behind its whats pushing not to get left behind.

But if it comes down to it, big banks takes small banks, your bank might take there bank.

But we dont know, and dont find atlist try not to just keep pushing your self.

Thats how I look at it

Answer 9

In terms of retirement, I'd say you're ahead of the game, but you don't really specify what your long-term goal is with your money. But considering most people your age haven't even begun to think about saving their money, I'd say you're doing well. You should think about increase the amount you save every year, though.

Answer 10

you know what everyone is different and if what you have is good for you then don't worry about what anyone else says. some people don't have anything saved. your young just keep saving. good luck.