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I'm 24 and want to invest now for the future, suggestions?

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I'm 24 and want to invest now for the future, suggestions?

Old 01-23-07, 11:28 PM
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I'm 24 and want to invest now for the future, suggestions?

I got a new job recently where I have the opportunity for a 401K including a matching contribution from my employer. I plan on putting money aside for that. I would like to know my best options for investing for the future. What are you guys' (that I assume are a bit older than me) financial strategies? Should I invest in stocks? Mutual funds? Savings accounts? I'm looking very long term here. Like 40 years down the road. What do you do or what would you have done differently when you were younger?
Old 01-23-07, 11:32 PM
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Rental properties.

Have your renters pay the mortage and build your equity.
Old 01-23-07, 11:42 PM
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I would focus on ETFs or exchange trade funds. You can pick the sectors you like (energy, blue chips, technology etc.) they have low loads (ie fees) and give you diversification. I would first invest all you can spare into your 401k (at least up to matching) look into a Roth IRA (I never had one considering income thresholds) and then invest in 6 months of expenses and THEN proceed with whatever recommendation you fancy best.
Old 01-24-07, 12:02 AM
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Get an xbox 360 and a PS3.
Old 01-24-07, 12:02 AM
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*timeshares
Old 01-24-07, 12:11 AM
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Originally Posted by superdeluxe
Rental properties.

Have your renters pay the mortage and build your equity.


But take awhile to educate yourself on it.
Old 01-24-07, 12:22 AM
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Dude, pumpkins. That's where it's at.
Old 01-24-07, 07:36 AM
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Originally Posted by superdeluxe
Rental properties.

Have your renters pay the mortage and build your equity.
That has nothing to do with the 401(k), unless one his choices is a REIT, which isn't even what you're talking about.

That said, depending on the market and the person, real estate is not a bad idea (although I would focus on multi-unit residential properties and small commercial).

In your situation, Popcorn, here are some basics:
<ul><li> <b>Diversify</b>. This means don't stick your money all in one plan (even if "Optimus Prime-Plus-One Equity" has a cool ring to its name). Have a mix of stocks, bonds, and other forms of investment in your 401(k). For the next 10 years or so, you want to invest long-term and you can take on a lot of risk (possibility of very low or very high returns). Try to get a mix of domestic and international funds as well. [more]
<li> <b>No company stock</b>. If your company offers company stock, keep this at a minimum, say 5% at the most. (See: Enron)
<li> <b>Give, give, give!</b>. Max out your 401(k) contributions if you can ($1000+ per month). Every dollar counts and the sooner you can invest it and have it start working for you, the better. You should be putting in at least 10% into the 401(k). At the very minimum, put in enough so that you max out the amount your employer matches.
<li> <b>Don't touch, don't overanalyze</b>. Don't withdraw money from a 401(k) if you can help it at all. Yes, you "pay yourself interest" but it's a raw deal and you lose out on the potential of a big return that year. If you borrow $10,000 for a year and that's the year your investments go up 20%, eventhough you "paid yourself" the 5% interest, you lost out on the other 15% you could've made. Just contribute to it and go back to see how everything is doing every 6-12 months.
</ul>

Your best bet for actually getting a decent direction with a financial plan is to talk to a financial planner. Like anyone involved in anything financial, you have to trust them and not everyone is going to be very good.

If you want, subscribe to one of the consumer investing magazines like Money. They're never spot on with their recommendations but they do a decent job of explaining a lot of stuff.

Good luck!
Old 01-24-07, 07:55 AM
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Originally Posted by The Bus
<li> <b>Give, give, give!</b>. Max out your 401(k) contributions if you can ($1000+ per month). Every dollar counts and the sooner you can invest it and have it start working for you, the better. You should be putting in at least 10% into the 401(k). At the very minimum, put in enough so that you max out the amount your employer matches.
Can't stress this one enough. My employer gives 3% to everyone, and then matches your first 6% at 50%. You wouldn't believe the number of people who aren't willing to put in at least 6% to maximize the employer contribution.

(personally, I've upped my contrilbution from 12% to 14% this year, so I get a nice round 20% total with the employer match)
Old 01-24-07, 08:55 AM
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Great advice from the bus!

most 401k plans offer targeted retirement funds, so they have funds like "20 year" funds that are more aggressive than "40" year funds, where you specify about when you'll retire and those funds will change over time from more aggressive now to more conservative and income based in the future. Diversify, and I'd suggest a good mix of a targeted retirement fund, international fund, bonds, and no company stock. Also, don't borrow against it!

If you happen to have any money left over after you get the full company match, instead of putting that extra into the 401k, consider a ROTH IRA. You put after-tax money into and withraw it tax-free when you retire!
Old 01-24-07, 09:02 AM
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plastics


Seriously, the Bus has it right, if for long term future ie retirement, max out your 401K I think the limit is 10K/year and pick diverse holdings in the 401K- large,mid, small caps, bonds, REIT and international funds.

outside of 401K look for low cost no load funds- you can pick agressive funds if your timeline is 40 years.
Old 01-24-07, 09:02 AM
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I agree with the Bus. I also want to recommend that you not look at retirement as something that begins at 65.
Old 01-24-07, 09:11 AM
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Max out your 401K: if your employer matches, it's free money! Leftovers go into a Roth IRA (if you make less than the maximum). Invest in a 529 if you have kids (I use Massachusetts).

After that, no load mutual funds: the diversification they offer for small investors is unparalleled. I'd stay away from stock picking: you'll just drive yourself crazy and you'll probably do better in the long term with something like an index fund.
Old 01-24-07, 09:12 AM
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Originally Posted by neiname
I would focus on ETFs or exchange trade funds. You can pick the sectors you like (energy, blue chips, technology etc.) they have low loads (ie fees) and give you diversification. I would first invest all you can spare into your 401k (at least up to matching) look into a Roth IRA (I never had one considering income thresholds) and then invest in 6 months of expenses and THEN proceed with whatever recommendation you fancy best.
I agree completely

Then, invest in Ethanol and everything related to it.


One of the best things I ever did when I was younger was invest in Mutual Funds (no ETFs back them, ETFs are like the new mutual fund). I went into large scope big cap types and they paid off well over the years.

It takes little knowledge and has 'less risk' than a single individual stock while maintaining a decent rate of return.
Old 01-24-07, 09:41 AM
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Old 01-24-07, 11:39 AM
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Want a really quick and easy way to make a little cash?

Ditch your bank savings account, and get in on something like www.ingdirect.com that gives you 4.5% on your savings, rather than the piddly 0.2% or whatever your regular savings account will give you. It's way more flexible than tying your cash up in a CD.
Old 01-24-07, 12:35 PM
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Originally Posted by The Bus
That has nothing to do with the 401(k), unless one his choices is a REIT, which isn't even what you're talking about.

That said, depending on the market and the person, real estate is not a bad idea (although I would focus on multi-unit residential properties and small commercial).

In your situation, Popcorn, here are some basics:
<ul><li> <b>Diversify</b>. This means don't stick your money all in one plan (even if "Optimus Prime-Plus-One Equity" has a cool ring to its name). Have a mix of stocks, bonds, and other forms of investment in your 401(k). For the next 10 years or so, you want to invest long-term and you can take on a lot of risk (possibility of very low or very high returns). Try to get a mix of domestic and international funds as well. [more]
<li> <b>No company stock</b>. If your company offers company stock, keep this at a minimum, say 5% at the most. (See: Enron)
<li> <b>Give, give, give!</b>. Max out your 401(k) contributions if you can ($1000+ per month). Every dollar counts and the sooner you can invest it and have it start working for you, the better. You should be putting in at least 10% into the 401(k). At the very minimum, put in enough so that you max out the amount your employer matches.
<li> <b>Don't touch, don't overanalyze</b>. Don't withdraw money from a 401(k) if you can help it at all. Yes, you "pay yourself interest" but it's a raw deal and you lose out on the potential of a big return that year. If you borrow $10,000 for a year and that's the year your investments go up 20%, eventhough you "paid yourself" the 5% interest, you lost out on the other 15% you could've made. Just contribute to it and go back to see how everything is doing every 6-12 months.
</ul>

Your best bet for actually getting a decent direction with a financial plan is to talk to a financial planner. Like anyone involved in anything financial, you have to trust them and not everyone is going to be very good.

If you want, subscribe to one of the consumer investing magazines like Money. They're never spot on with their recommendations but they do a decent job of explaining a lot of stuff.

Good luck!
Well, I'm screwed. See you in the bread line!
Old 01-24-07, 12:53 PM
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Muffin Tops.
Old 01-24-07, 01:54 PM
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I made a ton of $ by helping some Prince in Nigeria.

However, what are the chances some Prince is going to e-mail you, out of all the people in the world, and ask for your help? I guess I just got lucky
Old 01-24-07, 01:58 PM
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Absolutely do not pull money out of a 401k unless you're desperate. The tax penalities alone will kill any profits you've made.

I've been shoving money into a 401k since I was 18, so I'm feeling pretty good.
Old 01-24-07, 02:02 PM
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401k like others are preaching. If you don't want to get into the rental business look at:
Roth IRAs
IRAs

buy a house.
Old 01-24-07, 02:57 PM
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Buy high quality stocks that pay a nice dividend (Verizon, AT&T, Altria, JP Morgan, Bank of America, Citigroup).
Old 01-24-07, 05:22 PM
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Originally Posted by vegasbaby
Buy high quality stocks that pay a nice dividend (Verizon, AT&T, Altria, JP Morgan, Bank of America, Citigroup).

This is a good way to minimize risk, when you own stock for the dividends you really don't care (well almost) about price fluctuations. I know a person that is doing this and he owns 50k in stock and makes about a thousand dollars a year in dividends which he puts right back in to buying stock. In 30 years of buying stock and reinvesting dividends he'll be able to live off his dividends
Old 01-24-07, 05:23 PM
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Lottery tickets..
Old 01-24-07, 05:41 PM
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Steer clear of anyone that calls themself a financial advisor, etc. And buy low, sell high.


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