I have never invested in anything but a 401K before and am looking for some helpful suggestions. I am a newborn when it comes to the stock market. How does one invest? What are some of the best ones if you do not have much money to start with?
2007-07-17 08:46:03 · 5 answers · asked by starstruck713 1 in Business & Finance ➔ Investing
If you are looking to save for retirement, the best thing to do would be to start a Roth Ira as long as you are eligible. You can contribute 4k a year, and depending where you have the account setup you can invest it in virtually anything.
Best bet would be to stick with mutual funds until you can educate yourself further though, get some help setting up a diversified mix and rebalance about once a year.
Now if you are looking for a tax-deferred vehicle like a 401k since you don't have one to contribute to and your maxing out your IRA then a Variable Annuity might be a good idea, but be very very careful with these. They are the highest commissioned products on the market, but there are good ones, and this would be a time when one would make sense. The nice thing is that there is no limit to what you can contribute to these.
Basically you contribute to it, and the money grows tax-deferred until retirement which can help lower your income now, and once you've retired you can start drawing it out at a lower tax bracket, theoretically.
I would suggest checking out a couple different companies before choosing anyone specifically.
Look at Fidelity, Vanguard, and Schwab for an IRA. Possibly Fidelity, John Hancock, or ING for an annuity, but be wary of their sales reps especially with the annuities.
2007-07-17 08:52:56 · answer #1 · answered by Jeff M 3 · 0⤊ 0⤋
If you still have that old 401, you can go to an investment company like Fidelity ( on-line ) and get it " rolled over" into an IRA. That's a start. They handle about 95% of the stuff involved in converting.
Most likely your 401 was " traditional", so leave it that way...but now you will have an account that you can work with on- line. Keep whatever funds were working for you, or trade into different ones...you would also be able to trade stocks or ETF's if you're ready.
Your second step would be to open a ROTH IRA at the same site...and add to that from here on out ( for your retirement).
You can trade in your IRA accounts...and not worry about taxes, gains, whatever until you start withdrawing...and then its taxed as income ( NOT the ROTH...tax-free...forever)
If you have money to invest besides for the future...you open another account...brokerage account.
None of this is " rocket science"...there are phone numbers for representatives to take you through the process on the web- site...no hard sell, just help.
Many sites on-line have " beginner's investing" help...try finance/yahoo...moneycentral at msn...or
http://beginnersinvest.about.com/
2007-07-17 09:31:45 · answer #2 · answered by jebediabartlett 6 · 0⤊ 0⤋
Open up a Roth IRA and buy an index fund such as The SP 500, the SP 400, Russell 2000 and Wilshire 5,000. You should pay about $25 a year or less to have the Roth and less than 1% (that you won't see to you sell) fee for owning the index. The money you take out will be tax free. Any brokerage company can set you up with a Roth IRA.
2007-07-17 10:55:53 · answer #3 · answered by gregory_dittman 7 · 1⤊ 0⤋
The twin brother (ok, granted, they are not perfect twins) of the 401K is the IRA.
If your employer doesn't offer a 401K, you can still open an IRA on your own, and do stuff very similar to what you would with a 401K.
More info: http://www.fool.com/ira/ira.htm
2007-07-17 08:54:05 · answer #4 · answered by Olivier W 2 · 0⤊ 0⤋
call my financial planner at Moreland Capital Management. their phone # is 208-578-7931. i always promote him when it comes to simple stuff because he will take the time to help you with the small things. good luck!
2007-07-17 08:59:33 · answer #5 · answered by hthwang3 1 · 0⤊ 1⤋