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I'm in my mid-twenties w/ a good paying civil service job. I have about $20k saved up in the bank w/ no earning interest. It's just sitting there waiting to have more of my income stacked on top of it or to be pulled out.
Now, I would like to start investing to see my money grow. No "get rich quick" schemes or any of that. This is a long term acivity and I'm willing to approach it as such. Crawl, walk, and eventually run w/o going to fast. I just don't know where to begin; things such as the terminology used, different ways to invest, etc. It's seems very intimidating. Any good reading material on how to invest or even personal stories on how you began to invest would be greatly appreciated.
Read Boglehead's Guide to Investing, it will tell you everything you need to know. Accept nothing else. Then invest in vanguard index funds. You can buy a total stock market fund and a total bond market fund and be set. Ideally the ratio of stocks should be your age subtracted from 100 (as you get closer to retirement you want to increase the proportion of bonds as they are less risky, but stocks grow more). If you are 25 ideally you should have 25% in bonds and 75% in stocks.
But seriously read the book. Accept no other substitute or answers. This is no get rich quick, it is slow but steady growth of 8-10% per year. Anyone who says you can get more than that without EXTREME risk is a scammer.
I'm in my mid-twenties w/ a good paying civil service job.
I have about $20k saved up in the bank w/ no earning interest.
It's just sitting there...
Now, I would like to start investing to see my money grow.
Are you contributing the MAX to the employer plan?
Are you contributing the MAX tp an IRA?
Do you have a six months emergency fund?
Have you paid off all/any unsecured debt?
Cross those four hurdles before doing anything else.
With a stable civil service job the first of the anything else to do is probably housing.
Look into buying a "multi" (live in one and rent out the other 3 or 4)
I'm in my mid-twenties w/ a good paying civil service job. I have about $20k saved up in the bank w/ no earning interest. It's just sitting there waiting to have more of my income stacked on top of it or to be pulled out.
Now, I would like to start investing to see my money grow. No "get rich quick" schemes or any of that. This is a long term acivity and I'm willing to approach it as such. Crawl, walk, and eventually run w/o going to fast. I just don't know where to begin; things such as the terminology used, different ways to invest, etc. It's seems very intimidating. Any good reading material on how to invest or even personal stories on how you began to invest would be greatly appreciated.
Here's the advice I wish I had gotten when I started investing but didn't. Are you investing in your employer's retirement plan (usually called a 457 Deferred Compensation plan or a 403b plan)???
That is the best place to start. The plan will give you a list of investment options that normally include mutual funds that invest in stocks or bonds or sometimes both. I recommend investing in a single fund that invests in a mix of stocks and bonds. Some plans have what they call "target date" funds that invest according to your age. They start out more aggressive and gradually get more conservative as you get older. These aren't my favorite, but they're not a bad option.
My favorite option is to invest in fund that invests in a mix of stocks and bonds. These funds go by different names: "Balanced", "Hybrid", "Asset Alloction", are all different names for the same concept. Usually, these funds invest in a mix of large company stocks and bonds. Some of the better balanced funds that are staples in retirement plans include:
Vanguard Wellington
Fidelity Balanced
T. Rowe Price Capital Appreciation
American Funds Income Fund of America
American Funds American Balanced Fund
Dodge and Cox Balanced
If you have any of the above funds in your plan, pick one and stick with it until you retire...you'll do fine. The key is to: 1. Save at least 10% of you gross salary (preferably more...10% is really the low end of what most people will need to save for retirment) and 2. Consistently invest in a balanced portfolio for decades (which is what balanced funds and target dated funds do).
As for owning rental property...I really don't think most people have the temperament for it. However, here is a great multi entry blog piece about investing in residential real estate:
The Wall Street Journal also has a good variety of books geared toward beginning investors and most are available at Amazon used for $5 or less.
Do NOT discount the various websites. E*trade, Vanguard, and T. Rowe Price all have some really good education websites and you do NOT have to be a customer to access them. Ditto for Morningstar.com although they DO have some sites that require subscriptions.
If you are a federal employees, the various TSP funds have the lowest expense ratios, lower than Vanguard.
Are you contributing the MAX to the employer plan?
Are you contributing the MAX tp an IRA?
Do you have a six months emergency fund?
Have you paid off all/any unsecured debt?
Cross those four hurdles before doing anything else.
With a stable civil service job the first of the anything else to do is probably housing.
Look into buying a "multi" (live in one and rent out the other 3 or 4)
Excellent advise. I wish I got this kind of advise 20 years back.
If you're in the public sector, you should be contributing to your thrift savings plan. You have the option of investing in three different equity indexes and two bond indexes, including a government bond index.
Your allocation depends on the level of risk you're willing to take on. There is no get rich quick scheme. People that beat the market are generally investing in stocks that have a higher overall beta > 1; however, if the market turns against them, they have higher unrealized losses as well.
If you want to diversify, I would suggest allocating a certain amount in the investment grade bond fund an a certain amount in the fund that tracks the S&P 500. If you're extremely risk averse, you can also allocate some of your money into the government bond fund as well.
I'm in my mid-twenties w/ a good paying civil service job. I have about $20k saved up in the bank w/ no earning interest. It's just sitting there waiting to have more of my income stacked on top of it or to be pulled out.
Now, I would like to start investing to see my money grow. No "get rich quick" schemes or any of that. This is a long term acivity and I'm willing to approach it as such. Crawl, walk, and eventually run w/o going to fast. I just don't know where to begin; things such as the terminology used, different ways to invest, etc. It's seems very intimidating. Any good reading material on how to invest or even personal stories on how you began to invest would be greatly appreciated.
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