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Hello, I'm interested in starting to invest but I'm not sure the best way how. I've heard of investing money into stocks (?) that eventually and you can live off the interest every month? Am I completely off base here? If not, can anyone advise what they are and how much should I start investing to get my safety net for my "golden years"?? TIA
Hello, I'm interested in starting to invest but I'm not sure the best way how. I've heard of investing money into stocks (?) that eventually and you can live off the interest every month? Am I completely off base here? If not, can anyone advise what they are and how much should I start investing to get my safety net for my "golden years"?? TIA
Do you have a 401K plan at work? Put 10% of your pay into an S&P 500 index fund within your 401K plan if that's available(especially if your employer offers a matching contribution). If a 401K plan with a match is not available, you could open a Roth IRA and invest in low cost index fund such as Vanguard or Fidelity's S&P 500 index fund.
That's a good place to start while you learn more about investing and asset allocation.
Hello, I'm interested in starting to invest but I'm not sure the best way how. I've heard of investing money into stocks (?) that eventually and you can live off the interest every month? Am I completely off base here? If not, can anyone advise what they are and how much should I start investing to get my safety net for my "golden years"?? TIA
Himain,
welcome to the investing forum.
easiest way would be to start with investing in a 401k/403b (if your employer offers it) because most companies "match" 1for1 up to a certain percentage you contribute each wk from your paycheck.
Next, I would look into an IRA. It can be a traditional IRA or "Roth" IRA. Both are great saving vehicles for later in life when you need the money.
Yes, you can invest safely in stocks if you know how and knowing exactly what your "risk tolerance" is....(Would you get extremely nervous if the stock market "tanked" in 1 day? Would you pull out your money and be afraid?") Knowing what to invest in depends alot on what you can "stomach"...
that eventually and you can live off the interest every month?
That will take alot of funds. If you had, for example, $100,000 in stocks and they paid dividends, that equalled 3%, that is $3000 a year in "interest."
$250 a month, and you can not live off that.
So the math is, how many $250's a month do you need to live off of?
Maybe 8 = $2,000 per month?
That's 3% dividends on $800,000.00 in stocks.
You can hire or pay commissions to a financial advisor. But they tend to suggest the investments THEY make the most commissions on. Not those which will make you the most money.
Or you can "do it yourself". If you choose this route, note there are good investments out there and bad investments out there. There are companies about to make a lot of money and there are companies about to go bankrupt. You need to have enough knowledge to be able to figure that out for yourself - because they will not tell you! Or there will be misinformation out there on the internet and even on TV!
So you need to read a bunch of books first before investing a cent.
Then read a BUNCH of books on different investment types. Search google.com for the following to find various books, then see if your library has those titles or buy online. Specialized books like on bonds will not be sold locally and probably not in a library. Maybe university library.
Search for these terms to find books...
book Interpretation of Financial Statements
book dividend stocks
book bonds
book mutual funds
book options
book master limited partnerships
book commodities
book day trading
book swing trading
Search for company financial reports here...
(Enter MSFT in "Ticker Symbol:" box, then click on "Find Companies", then you can read their financial reports to the SEC.) Company Search
Forget the 401 nonsense u need control. Get a margin account spend plenty of time researching ur stock until u get good before buying. Paper trade to get confidence so u use fake money in the real market and learn the websites interface. U should have enough spare time before immersing itself. Learn what an option is to give leverage and hedging capability. Set up an excel worksheet to track ur progress and performance with each strategy. Don't go guess or try to know to much on any particular company and pm me if u want my take on anything. I'm starting a supscription website soon so need experience helping beginners. I hate to see newbies get burned and discouraged.
Forget the 401 nonsense u need control. Get a margin account spend plenty of time researching ur stock until u get good before buying. Paper trade to get confidence so u use fake money in the real market and learn the websites interface. U should have enough spare time before immersing itself. Learn what an option is to give leverage and hedging capability. Set up an excel worksheet to track ur progress and performance with each strategy. Don't go guess or try to know to much on any particular company and pm me if u want my take on anything. I'm starting a supscription website soon so need experience helping beginners. I hate to see newbies get burned and discouraged.
The problem with this is that very few people have the time or the temparament to do this successfully.
The best option for the vast majority of us is those boring balanced mutual funds that invest in a mix of stocks and bonds. Here are my favorites, any one of which would work well:
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