What is the best way to slowly invest over time?

Question

I'm bored and thinking about my current investments and the future.
I'm 25 and single. I've been with my current employer for one year next month. My base wage is about 33,500 a year with pleny of overtime and holiday pay. I'm currently on pace for $42,000 and work very little overtime, I make what the average household in my area makes. I plan on buying a home about this time next year but aside from that, I'm looking for places to tie my money up so I don't waste too much of it.

Next month I'm eligible for the 401k at work. My employer matches 50% up to 6%. I plan on giving the 6% to take an extra 3% upfront. I've also been sending a couple hundred a month to prosper.com. I love that site! I tried trading stocks but I don't have the time to babysit and keep up to speed. I have a buddy for that anyway. I'm looking for other ideas? Self-directed IRA? What else? Thanks.

PS I plan on staying in the 15% tax bracket this year and next.

Thanks to those that have answered but I'm not looking for stocks or mutual funds. I'm looking for new ideas to get excited about. Like I stated earlier, I really like the Prosper model, it's new, simple enough, and gives a very nice return. Anything else like that?

Answer 1

Since you're probably talking about investing fairly small amounts per month, a mutual fund is probably the easiest way to invest for the long term because they'll often accept small amounts. It's hard to buy a good stock with a couple hundred dollars. Think about an IRA that you can invest in a mutual fund. The easiest kind of mutual fund to use is the lifecycle or target date fund. These are funds where the fund staff put your money in a diversified portfolio. You don't have to do any money management yourself. The fund's investments are selected for long term growth. You might want to look at the Vanguard and Fidelity websites to see what they have to offer; they're likely to have pretty low costs, especially Vanguard. For more information, see the webpages below.

Answer 2

1) Absolutely positively without a doubt do the 6% into the 401K

2) Since your looking for a house in a year you have a major cash need in a short period of time. Since you'll need the money in a short time you should just open on of the many online savings accounts out there (You don't want to take risks if you need it short term, and you'll be liquid but not so liquid that you'll dip into for a couple of movie rentals.) Go in every month and transfer to it about 1/12th of your targeted downpayment.

3) After the house thing is dealt with start funding a Roth IRA (if your 401K has a Roth 401K option go with that). The Roth works out better for a young person when you start taking about what you get to keep deep into retirement. Most online brokers will have a range of funds you can purchase and mine doesn't charge an annual fiduciary fee. Since your in your mid-20s you can start being very aggressive as you'' have over 30 years to let the money grow. Getting a start early in life on a Roth can have a substantial impact on your long term wealth creation.

Answer 3

If you are comfortable with the prosper model, then allocate more of your money to that investment. You can compound your returns and make even more money. Also you could check out a self-directed IRA and use it to invest in real estate.

Answer 4

If you want to invest in stocks I just found a broker that charges 0 for each trade up to 40 per month at
http://www.zecco.com/Default.aspx
You can buy dividend reinvestment stocks.
Search for them in the seach engine or you may want to try this service Wholesale, Guide To Investment Publications at
http://catalogofcatalogs.com/catcat.htm
#66
You can also invest in coins. See
http://www.pcgs.com
Or Antiques read up about them in the library

Answer 5

investment in mutual fund for growth fund