Getting Into Investing for the 1st Time

[forest beekeeper]

Originally Posted by Oildog

Why not open an account w Schwab or another discount broker that you can make periodic deposits. First investment would be a Roth IRA. It doesn't cost anything to open, and investments grow tax free until you retire (stick the money into high dividend stocks and funds and let them compound. Max yearly contribution is $4500 I think.

There are many investment vehicles which are 'tax-free'. And there are some that are 'tax-deferred'. They should never be confused with each other, as they are completely different.

I wish to correct your phrasing here though, you are describing investments which are 'tax-deferred', and not 'tax-free'.

It might be less confusing for new investors, when you are discussing 'tax-deferred' investments to use the phrase 'tax-deferred', rather than 'Tax-free'.

Since the two phrases mean completely different things, yet folks seem to confuse them.

Thank you for your assistance in this matter.

[LongArm]

Originally Posted by forest beekeeper

I wish to correct your phrasing here though, you are describing investments which are 'tax-deferred', and not 'tax-free'.

He said a Roth "grows tax-free" which is correct. You NEVER pay tax on the growth in a Roth, therefore it's not merely tax-deferred, but tax-FREE.

BTW, the max contribution for a Roth is $5k, not $4500. (It's $6k if you're 50 or older.)

[forest beekeeper]

I stand corrected, my apology to all.

I read IRA and was not paying close enough attention. Sorry.

[Emma Reyes]

Originally Posted by AVTechMan

After reading many threads and articles on people saying how you should invest and have money work for you, I am convinced that maybe I should look into it. Thing is many people say to invest here and invest there, but I don't really see an easy way to get into it like, what a good way to start for beginners?

I am 31 years young and have never invested anything in my life, mostly because I do not understand it. To be honest I find it more confusing and daunting than anything, and I surely don't have a clue on who to find or talk to about investment options. Many people don't want to invest either because of the risks or that they simply don't know how. Obviously storing money in a bank savings account isn't going to do anything as far as building up anything.

I would just simply like to know what is the best way to start out? I know there will be tons of variances and ideas, but someone has to start somewhere, especially when you don't have alot of money to start out. I agree with the fact that instead of me working hard for the money, it should be the other way around and it should be working for me!

But as much as people talk about all the time how you should invest, there obviously must be some good that comes from it.

Any thoughts would be appreciated.

Hi! If I knew nothing about investing as you say, I wouldn't invest myself. Too much risk of losing everything. I would refer to the specialists. It may be either on-line investing or just real investing. Doesn't matter. If it is an on-line company, make sure they do not offer too fantastic profit. Besides, the company is supposed to insure your investments,etc.

Getyourmoney. Investment

[j_k_k]

The safest way to invest, if you know nothing, is a total stock market index exchange-traded fund. The idea there is that you will make what the US markets make (or lose what they lose), and since the long-term trend for those is upward, that's good. While following this, you may learn more about investing and develop the expertise to invest your money more aggressively--and if so, great. But in the meantime your money is hard at work for you doing something that's likely to bring you gains.

Buying individual stocks is most people's first idea when they look into investing, but it's usually their worst on multiple levels.

[Vipor]

Originally Posted by Sunnydee

Excellent advice! If your company has a 401K program check it out. Companies often match your contribution in such accounts. If this is the case where you work, you should definitely max out the 401K each year and get the matching funds - it's kind of like getting free money from your employer. You're very smart to start investing now because, through the beauty of compounding, your money will grow over the next few decades and then you'll be well set for retirement. Best wishes.

If nothing else, I totally agree with the "company-sponsored" 401k programs. I began participating in my employer's 401k 20 years ago via contributions that are not even missed on my paycheck and have been receiving the company match all along. The way I see it, their match will pay the tax bill when the time comes for me to withdraw.