[JohnnyCanuck]

Originally Posted by Aatish

Wasn't trying to call anyone out on this thread, just saying.

I know a lot of people, whom are older than me and have families, as well as those near my age who do not understand the power of compound interest rates.

Completely agree that a completely conservative strategy isn't ideal. Some aggressive moves are necessary...but I feel that varies from person to person.

Sorry ... thought that was directed at me. Your point is absolutely valid, it's just that we live in times such piss poor interest rates that relying on compounding alone is not going to generate competitive returns.

[theriz]

Originally Posted by roastbeef

i'm a real estate guy. i don't sell it and neither does my family. one thing i noticed growing up, a solid percent of rich/wealthy people have a strong foundation in real estate. i educated myself on the internet and simply watched the market. i saved for an opportunity and jumped on it when it presented its self. i own my primary residence and two rentals. i bought one in 2012 and the other in 2015. i'm only netting about $400 after all my costs/taxes/insurance/etc., but they have appreciated well and will be paid for by the time i retire (i'm 29 now) and will bring in over $3k by that time as well.
it is minimal work for the return, but you must have a long-term vision. some people will think you are wealthy now, but its the opposite, i have to more carefully watch my money because i now have tenants that rely on me. i plan on buying more, but the market is crap right now. whatever you do- educate yourself on it, save money, and strike when the opportunity you've educated yourself on presents its self. there is no such thing as luck, just preparation, presentation, and execution. start preparing!

Would agree with everything but luck. I got lucky when buying mine after searching for 2-3 years. Then again I'm a real estate broker.

[Aatish]

Originally Posted by JohnnyCanuck

Sorry ... thought that was directed at me. Your point is absolutely valid, it's just that we live in times such piss poor interest rates that relying on compounding alone is not going to generate competitive returns.

No problem.

Agree that right now, with current rates, relying on compound interest isn't the best route for getting a return on ones money.

But for this younger generation, just saving some money is a start. Thus might just be from my perspective, but from what I see, the majority of my generation isn't saving money, or at least not enough.

Many ask me about stocks or investing in "business". Many are looking for a quick buck. Many end up getting burned, and quit playing.

Learning to save money is a start. Hopefully it leads to better, more aggressive movement.

[David70]

You absolutely need to take advantage of the 4% match first as you immediately double your money (unless your plan requires you to be vested which can take years). Then, I am a strong proponent of low cost index funds. Only about 20% of actively managed funds beat index funds and the ones beating index funds keep changing. I also like index funds because you put the money in, don't need to constantly worry about when to get in or out, get good results (not the greatest, but never the worst) and you aren't paying fees to people that try to beat the index but are rarely successful.

As for where to put your money you need to decide what your short and long term goals are. If it is to have money to put down on a car next year or a house in a couple then the money needs to go somewhere relatively low on risk. If for retirement you can weather the stocks ups and downs easier.

[BayMoWe335]

Don't pick stocks. You can't. No one can.

Low cost index funds from Vanguard are your best bet.

The stock market is the only game in town.

Dollar cost average.

Never sell.

Never stop adding.

Max 401k

Max IRA

Wait.

Profit.

[mantis]

vanguard roth ira, max contributions
CDs
mutual funds
bond measures, city and county
stocks
property

things should kinda go in this order

[1MOREMOD]

Take your money to an investor and you will get schooled?

[Thxrick]

Originally Posted by mantis

vanguard roth ira, max contributions
CDs
mutual funds
bond measures, city and county
stocks
property

things should kinda go in this order

Really? Great advice.

this thread is a joke...like I said, at 26, max your 401k and when you get older, seek some advice...

[mantis]

Originally Posted by Thxrick

Really? Great advice.

this thread is a joke...like I said, at 26, max your 401k and when you get older, seek some advice...

im older and already regret not saving sooner, what a joke huh.

i have slaved myslef off the streets from homeless to successful, im still busting my ass everyday, knowing i dont have anybody but myself. NO parents to leave me their shit, no family to bail me out.

multiple streams of revenue is what you will be wanting when you get to my age 42

the only joke in this thread is your attitude


oh and these are all relatively risk free investments

[David70]

Originally Posted by Thxrick

Really? Great advice.

this thread is a joke...like I said, at 26, max your 401k and when you get older, seek some advice...

Really bad advice. Figure out your goals and go from there. If he wants to buy a house in a few years your advice is way off track as he won't be any closer to this goal 5 years from now (having a down payment) than he is now. Maxing out his 401k but not having any money easily available for emergencies? Also bad advice.

Then, instead of becoming educated on his options and what to do with his money when he has it he should just not worry about it and blindly get advice later. That's exactly how people end up with really poor investments, they know nothing about what they are being sold so selling them bad advice is very easy. Then to think some family member/ friend is the advice you need is also asking for trouble. Same reason you should research any high dollar purchase (car, house, vacations, etc.) and not just trust the adviser to steer you the right way.

[shawntech]

I've asked this question to others before, i'll ask it here.

$120k cash in the bank, 70% home equity, save roughly $1200 cash a month, no other debt.

3% company matched 401k, the usual health insurance and other costs.

What should I be doing? I'm currently doing nothing, very conservative and holding has been safer to me than weathering some kind of crash in a market I know nothing about.

[1MOREMOD]

Buying a ferrari

[JohnnyCanuck]

One thing that's been understated, but mentioned (and way too low on the that list that mantis made) is buying a home.

Real estate is a fantastic investment vehicle (as long as you don't stupidly overextend). Whatever you pay in rent is money thrown away. The same is true of interest on a mortgage. However, the principal on your mortgage payment is building equity and a form of forced savings. Therefore, if you are paying less in mortgage interest than you would in rent, you are throwing away less money and saving more. If you buy somewhere where values appreciate, then you're getting ROI on your principal as well as throwing away less money on the rent vs. interest side.

Get into an apartment/condo if that what it takes, but the sooner you're as homeowner, the better off you should be.

[shawntech]

Originally Posted by JohnnyCanuck

One thing that's been understated, but mentioned (and way too low on the that list that mantis made) is buying a home.

Real estate is a fantastic investment vehicle (as long as you don't stupidly overextend). Whatever you pay in rent is money thrown away. The same is true of interest on a mortgage. However, the principal on your mortgage payment is building equity and a form of forced savings. Therefore, if you are paying less in mortgage interest than you would in rent, you are throwing away less money and saving more. If you buy somewhere where values appreciate, then you're getting ROI on your principal as well as throwing away less money on the rent vs. interest side.

Get into an apartment/condo if that what it takes, but the sooner you're as homeowner, the better off you should be.

+1 I bought my first house in january 2009, live there until late 2015 and put a legit $72k in my pocket after closing, allowed me to buy a bigger house that was nicer and it still costs less.

[John 070]

Originally Posted by kprocivic

only if your beating inflation. if not why bother.

It's a line that a whole life insurance agent uses, "Forced savings."

Never buy whole life insurance though, not, ever.

I have a 5% gas card, which is only 3% if you don't have a loan. My wife's car got paid off.

So I set up a checking with direct deposit, and did the minimal direct deposit to keep the 5% gas cash rebate.

Checked the account a couple of months later and there's $4k in it. Is it keeping up with inflation? No, it's earning 0.002, pretty pathetic. But I didn't even miss it, and now it's there.

[BayMoWe335]

Originally Posted by ls3c6

I've asked this question to others before, i'll ask it here.

$120k cash in the bank, 70% home equity, save roughly $1200 cash a month, no other debt.

3% company matched 401k, the usual health insurance and other costs.

What should I be doing? I'm currently doing nothing, very conservative and holding has been safer to me than weathering some kind of crash in a market I know nothing about.

Do what I said above.

Slowly scale the $120k into the market into 2-3 low cost all stock ETFs from Vanguard. For $120k, you can DO $5k/month for the next 24 months.

Keep a 6 month emergency fund.

[John 070]

Originally Posted by BayMoWe335

Do what I said above.

Slowly scale the $120k into the market into 2-3 low cost all stock ETFs from Vanguard. For $120k, you can DO $5k/month for the next 24 months.

Keep a 6 month emergency fund.

Nice, slow and steady....I find the older we get, the less we say, "Da** I shouldn't have sold facebook, I only made $16,000. If I kept it, I could have had $180k." There is a reason, because the latter would have had us taking on far more risk than we were comfortable with. We often need to step back and realize if we're even asking for advice on the internet, we're not rich, we're ordinary perhaps above average folks with potential....no need to make a killing each and every time.

[PoorLurker]

Originally Posted by JohnnyCanuck

Sorry ... thought that was directed at me. Your point is absolutely valid, it's just that we live in times such piss poor interest rates that relying on compounding alone is not going to generate competitive returns.

Not sure that anyone mentioned compounding interest is only thought about in savings accounts or bonds.

If your portfolio is averaging 5% returns, then the money is compounding.

$100 in your portfolio
5% increase, portfolio is now $105
5% increase and now you have 110.25.

[sygazelle]

Great advice so far from several points of view.

I'll add another that I haven't seen yet: At your age, consider buying 5 year old cars and keeping them for 5 years and then doing it again. If you get caught up in the leasing game, you will always have a car payment.

I say consider because there are some cases where leasing makes sense. If your goal is increase your net worth, then consider buying an older car and put the money you save into one of the several options other posters have mentioned.

Good luck!

[yourcakeisready]

Invest in shoes

[PoorLurker]

Originally Posted by sygazelle

Great advice so far from several points of view.

I'll add another that I haven't seen yet: At your age, consider buying 5 year old cars and keeping them for 5 years and then doing it again. If you get caught up in the leasing game, you will always have a car payment.

I say consider because there are some cases where leasing makes sense. If your goal is increase your net worth, then consider buying an older car and put the money you save into one of the several options other posters have mentioned.

Good luck!

Who wants to look poor driving around a crappy paid off car only to benefit your bank account a thousand or so more each month?

[yourcakeisready]

Originally Posted by PoorLurker

Who wants to look poor driving around a crappy paid off car only to benefit your bank account a thousand or so more each month?

I like this guy