I don't have a 401K but I have 10,000. what should I do with it so I will have some money when i retire?

Question

I would like to know what I should do with 10,000 so it will make me some money for when I retire in about 15 years.

Answer 1

1st, you've stated that you have a mid-to-long term goal of 15 years. So, second, you need to ask yourself what risk your comfortable with. Can you handle loosing half of what you put in one day with the potential for making it back the next or do you want to be guaranteed that every penny put in DEFINITELY remains? The first is more options and futures while the latter is more your savings account. I'll assume somewhere between.

Overall, I'd suggest a mutual fund of some sort. Basically, it is a fund that invests in multiple different stocks, diversifying your investment and, therefore, your risk if one specific company/category does poorly. Given your 15-year outlook, I'd suggest one with both Growth and Income. Funds are rated in different categories like Growth, Income, Growth and Income, etc. Growth means that the price of the fund invests in companies that are likely to rise in stock price so you can buy low and sell high. Income means that the fund invests in companies that often give dividends to their shareholders (dividends are portions of the profit the company earns that year and are usually paid quarterly). If you get dividends, ensure that you are signed up for a direct reinvestment plan so that all dividends received will be directly reinvested to buy more shares of that fund and immediately start earning you more money. Note that you usually have to pay taxes on dividends in the year that they are earned. Overall, dividends will help your money grow faster as it adds to the baseline of the pot (read up on compounding). If you look solely at growth, it could go up and up for 14 years and 11 months but tank the day before you withdraw. I'm not saying dividends can completely compensate for this but it does add more money into the pot to allow it to compound and work for you over the course of the 15 years. If you really want, you could just have the dividends deposited to a cash account and keep them out of the mix but your earning potential drops.

I would suggest you look at low-load and no-load funds like those found at Vanguard (www.vanguard.com). With 10K starting, you'll (likely) meet the minimum balance required to not incur any basic fee and, as the name suggests, transaction fees are low (in comparison to large brokerages). While these companies typically don't provide stock advice, they are required by law to provide how their funds have performed over various time frames. Look at not only the 1 year but, the 5 year and lifetime performance to get a better gauge of how well the fund manager handles changing times.

You can look into investing directly into the DOW Jones index (it has shares of all of the "blue chip" companies that make up the Dow index) or the S&P index. Another option is that these low/no-load firms often put together retirement funds for each decade. So, say you invest in the 2020 retirement fund. The fund manager will automatically invest the fund in more risky stock/bonds now (earning more $) and, as 2020 nears, switch the fund to less risky items to ensure the money is there as it comes time for you to need it. Which brings me to my next point, if you don't invest in this type of fund, you should consider doing this yourself. Invest moderate-to-high risk now and, in 5 years, go to moderate, and in 5 more, reduce to low-moderate.

Another option to look into is the investment into an Individual Retirement Account (IRA) (see www.ira.com for details). You should talk to an accountant and/or read the tax docs for your specific situation but the two your most likely to consider are a Roth IRA and a Traditional IRA. But note that the government only allows so much to be invested into your IRA account each year - income dependent. So, some into IRA, rest into normal for now and feed into IRA from standard account over the next few years (you're typically allowed 3K+ into an IRA each year). With a Roth IRA, you pay taxes now at your current tax rate but draw out the money tax free. With a Traditional, the money you invest today is deducted from your total income you pay taxes on today but you pay taxes at whatever your income bracket is when you withdraw. So, the simple way of looking at it is that if you expect to have a higher income level at retirement, pay the cheaper taxes now and invest in a Roth. If you expect a very modest retirement income, then a traditional is better. Again, seek accountant advice or read tax laws for what's most applicable to you. Oh, note that you pay a penalty if you withdraw from either account before retirement time unless for some very specific instances and, you MUST withdraw your money by a certain retirement age. Depending on your age now, this may not make it worth your while, but consider it.

Most IRA accounts allow you to choose a broad range of funds to apply within the IRA so you can still do the approaches I spoke of before as you do not get penalized if the fund manager tinkers with the stock holdings in the fund and you don't get penalties if you withdraw from a fund in an IRA and immediately reinvest in a same-family type of fund (still as part of the IRA account). Again, talk to accountant / read no-/low-load brokerage firm's rules about what exactly it means to do this and what the firm's limitations are on reinvestments in IRAs before investing.

Answer 2

Open a Roth IRA at a brokerge firm such as A.G. Edwards. Ask the broker to get you mutual funds that pay 10% to 12% on average a year. That way you can build wealth during the next 15 years and stay ahead with inflation.

Get some growth funds, balnced funds and some funds that pay dividends. Don't get funds that are too aggressive, you want to make sure you have money when your retire, and at your age, investing into high risk aggressive funds may hurt your retirement. Don't put all your eggs in one basket, make sure you spread your cash into multiple funds.

Also ask the broker for a few preffered stocks as well. They are safer then common stocks, and pay dividends between 1% to 15% (find one that is at least 7%)

Answer 3

LISTEN DUDE!!!
First, split you 10,000 to two... 20,000 and 80,000...
Second, loose that 20k by learning how to invest in different investment opportunities like stocks, bonds, real estate, and many other investment options... the other 80,000 can serve as your reserve whenever you got excited to my suggestion... consider it as investment savings...
Third, be SMART... KNOW THE NUMBERS through accounting and finance or if you're tired in math, get yourself a book of ROBERT KIYOSAKI and read it... If you hate reading then LEARN to READ... Coz i cannot help you with that...
Fourth, Know the difference between ASSET and LIABILITIES and start building your ASSETS... Remember, your business is your ASSETS, be it a company, an investment or a retirement plan(but the problem with the retirement plan is that you will know if you done good when you retire unlike the first two...)
Fifth, remember this, Risk in not on the investment but on what you learn... If you know nothing about Investments, THEN THAT IS RISKY...
GO IT!!!

Answer 4

The 3 things to do is invest-stocks or bonds, real estate, and small business. It will take some time, and some up and downs but in the long run, your money will grow.

Answer 5

If your company offers a 401(k) plan you should get one, with employer matching if possible. As far as the money and how to invest it or whatever, that depends on your personal preferences and so forth. I recommend that you consult with a financial advisor who has nothing to gain (financially) from which choice you make and go over all the options with him/her.

Answer 6

check out ncinvesting.org, their investing programs can turn your $10,000 into several hundred thousand before you retire in 15 years.

Answer 7

Bye good mutual funds
In India: Magnum Global, FT Prima or Reliance Power

In your country look for good mutual fund

Answer 8

2 ideas:
1. buy 15 shares of Google and wait.
2. buy a depressed price home using this as downpayment and rental income to pay mortgage.

Answer 9

Open a Roth IRA and a high yield savings account with HSBC

Answer 10

Open a money market account. You can even do it thru State farm if you have their insurance - ask your agent.