A New Investment Plan

[Wake]

Personally I enjoy this section of USMB quite a bit, and like discussing financial strategies at length to learn things I've been ignorant of.

I used to buy and hold stocks at Scottrade. Right now I only hold one position, GRHPC, and it isn't doing well right now. It had been up by +$220 dollars and then it went down by -$161. Gonna wait and see if it goes back to +$200, and then likely sell it off. There's this element of anxiety and woe that somewhat irks my guts when I see my stock doing poorly like that, and it sucks.

And Scottrade doesn't have Dividend Reinvestment Programs (DRIPs). They used to have a Flexible Reinvestment Program (FRIP), but when I called the national branch five days ago they said it's being "revamped," and is currently offline, because it "wasn't working out as they had hoped." Well bull-honkey on that. If they're not able to get that FRIP program working, and they don't even have DRIPs, then I'll look elsewhere.

What I wanna do is get a Roth IRA and stick 20+ DRIPs into it. Being a young 26-year-old dude I figure now's the time to take advantage of compounding. So I called Fidelity the same day I called Scottrade, and asked if they had DRIPs. Apparently they do, and lots of them. The financial adviser I spoke with said that I should buy into mutual funds, turn them into DRIPs, and place them into a Roth IRA investment vehicle, and watch as those snowballs grow as they roll down the snowy hill.

I figure since I'm only a lowly CNA I could put a lot of spare money aside and put some hundreds here and there in high-integrity, dividend-paying stocks with an APY of about 6% to 7% interest. I got burnt with GRHPC because I bought them when they were paying out an interest rate of 13% monthly, but I was stupidly naive and didn't note that it likely had a weakness that'd cause the stock's value to go down. I'm also planning to look into my hospital's 401K program and see if I should put money towards that, and also Vanguard's plethora of index funds. Mainly I want to buy some fairly reliable dividend-paying stocks and take advantage of a lot of compounding. If this meat-suit has 40 or more years in it then it'd probably be wise to start now.

For the financial investors here that are experienced and actually know what they're talking about, please, please let me know if I'm going about this in a completely wrong way, or if it might be a good idea. It would really, really help me out here.

 

[Moonglow]

I always liked real estate over stocks...

 

[Toddsterpatriot]

Personally I enjoy this section of USMB quite a bit, and like discussing financial strategies at length to learn things I've been ignorant of.

I used to buy and hold stocks at Scottrade. Right now I only hold one position, GRHPC, and it isn't doing well right now. It had been up by +$220 dollars and then it went down by -$161. Gonna wait and see if it goes back to +$200, and then likely sell it off. There's this element of anxiety and woe that somewhat irks my guts when I see my stock doing poorly like that, and it sucks.

And Scottrade doesn't have Dividend Reinvestment Programs (DRIPs). They used to have a Flexible Reinvestment Program (FRIP), but when I called the national branch five days ago they said it's being "revamped," and is currently offline, because it "wasn't working out as they had hoped." Well bull-honkey on that. If they're not able to get that FRIP program working, and they don't even have DRIPs, then I'll look elsewhere.

What I wanna do is get a Roth IRA and stick 20+ DRIPs into it. Being a young 26-year-old dude I figure now's the time to take advantage of compounding. So I called Fidelity the same day I called Scottrade, and asked if they had DRIPs. Apparently they do, and lots of them. The financial adviser I spoke with said that I should buy into mutual funds, turn them into DRIPs, and place them into a Roth IRA investment vehicle, and watch as those snowballs grow as they roll down the snowy hill.

I figure since I'm only a lowly CNA I could put a lot of spare money aside and put some hundreds here and there in high-integrity, dividend-paying stocks with an APY of about 6% to 7% interest. I got burnt with GRHPC because I bought them when they were paying out an interest rate of 13% monthly, but I was stupidly naive and didn't note that it likely had a weakness that'd cause the stock's value to go down. I'm also planning to look into my hospital's 401K program and see if I should put money towards that, and also Vanguard's plethora of index funds. Mainly I want to buy some fairly reliable dividend-paying stocks and take advantage of a lot of compounding. If this meat-suit has 40 or more years in it then it'd probably be wise to start now.

For the financial investors here that are experienced and actually know what they're talking about, please, please let me know if I'm going about this in a completely wrong way, or if it might be a good idea. It would really, really help me out here.

The financial adviser I spoke with said that I should buy into mutual funds, turn them into DRIPs, and place them into a Roth IRA investment vehicle, and watch as those snowballs grow as they roll down the snowy hill.
Why put mutual funds into a DRIP? Don't they typically reinvest their dividends into new shares?

If you want to buy a diversified group of individual stocks for DRIPs, you'll save on the mutual fund expenses.
And probably reduce the advisors commission.

high-integrity, dividend-paying stocks with an APY of about 6% to 7% interest.

Doubt that there are many stocks like that out there.
I'd be afraid of a stock paying a dividend that high.
Even PM is only yielding about 4.8%

 

[Wake]

I read a few articles on dividend reinvestment.

Opened up a Roth IRA at Fidelity and bought 28 shares of Vanguard Natural Resources (VNR) @ $13.51. It's a monthly, and one of three recommended monthly stocks for dividend reinvestment. PSEC and O are the other two. VNR is @ $15.52, but it fluctuates: its 52-week high was $33.04. If it reaches $28-$30, I'll sell though my naivete wants to hold.

 

[Jacob Adom]

If you are interested in stock market but don't know where to start from? Visit OTC Bully for great stock market tips.

 

[the207life]

In the same boat as you age wise. Nice to see someone in a similar situation as I am.

After reading a lot and doing some research I have the following in a Roth at tdameritrade.


30% in a vanguard bond ETF
50% in a vanguard total market ETF
20% in a vanguard international ETF

Dollar cost averaging biweekly for a total of 5000 annually.

Being in the military we don't get the traditional 401k but I would look to see what your hospital will match for contributions and use that on top of your Roth.

 

[fmdog44]

Look hard at Vanguard as they are the cream of the crop for integrity and success. Market returns are not what they used to be to say the least. I am 67 and not a fan of mutual funds but I do have a large chunk in conservative Vanguard index funds and their Ginnie Mae. I don't need big returns so I am happy to beat inflation. The poster "the 27life" seems to have his head on straight. If you are young don't get greedy you have time on your side and don't panic when it gets scary, trust me I have been through those times. So far through it all the market comes back and in 2008-9 as I was watching my retirement money slowly vaporize but I followed instructions and held on and it was not easy especially at my age then. (1985 was no picnic either.) It all came roaring back like it always has and now I am set for life. Young folks put 10% of your money away every payday and when you are ready to go fishing the rest of your lives you will be glad you did.

 

[OnePercenter]

As I stated two years ago. Delivery of IT.

This morning on the golf course in Florida I had a face to face meeting with an Engineer in Woodland Hills, CA, a Crew Chief in Bellingham, Wa, and a Crew Chief in Phoenix, Az., at the same time. Who would have thunk.

Wireless offices, portable PC's, wireless cable TV, wireless electricity are all the future, and the future is NOW!

 

[OnePercenter]

Look hard at Vanguard as they are the cream of the crop for integrity and success. Market returns are not what they used to be to say the least. I am 67 and not a fan of mutual funds but I do have a large chunk in conservative Vanguard index funds and their Ginnie Mae. I don't need big returns so I am happy to beat inflation. The poster "the 27life" seems to have his head on straight. If you are young don't get greedy you have time on your side and don't panic when it gets scary, trust me I have been through those times. So far through it all the market comes back and in 2008-9 as I was watching my retirement money slowly vaporize but I followed instructions and held on and it was not easy especially at my age then. (1985 was no picnic either.) It all came roaring back like it always has and now I am set for life. Young folks put 10% of your money away every payday and when you are ready to go fishing the rest of your lives you will be glad you did.

Thanks to those that voted Republican in the last 45 years, your generation is that last that is going to do well financially. Young folks can put away 10% of their monies, but that will only keep their head above water, nothing else.

 

[fmdog44]

Look hard at Vanguard as they are the cream of the crop for integrity and success. Market returns are not what they used to be to say the least. I am 67 and not a fan of mutual funds but I do have a large chunk in conservative Vanguard index funds and their Ginnie Mae. I don't need big returns so I am happy to beat inflation. The poster "the 27life" seems to have his head on straight. If you are young don't get greedy you have time on your side and don't panic when it gets scary, trust me I have been through those times. So far through it all the market comes back and in 2008-9 as I was watching my retirement money slowly vaporize but I followed instructions and held on and it was not easy especially at my age then. (1985 was no picnic either.) It all came roaring back like it always has and now I am set for life. Young folks put 10% of your money away every payday and when you are ready to go fishing the rest of your lives you will be glad you did.

Thanks to those that voted Republican in the last 45 years, your generation is that last that is going to do well financially. Young folks can put away 10% of their monies, but that will only keep their head above water, nothing else.

Contrary to your errant post today, right now, today putting 10% percent of one's wages every week is the rule of thumb for a comfortable retirement. Also, "my generation" got crushed during the several downturns in past decades if they did not watch out and the people I work with today that are half my age and doing very well for themselves perhaps because they are intelligent and you are not. The subject is money and since you are not literate on this subject I advise you to learn how to make money work for you versus you work for money. Prove your ignorance by taking look at the major indexes under different administrations. Your are foolish and when you are at retirement age you will suffer for not doing something about it much earlier in your life.

 

[fmdog44]

As I stated two years ago. Delivery of IT.

This morning on the golf course in Florida I had a face to face meeting with an Engineer in Woodland Hills, CA, a Crew Chief in Bellingham, Wa, and a Crew Chief in Phoenix, Az., at the same time. Who would have thunk.

Wireless offices, portable PC's, wireless cable TV, wireless electricity are all the future, and the future is NOW!

Correct! A point made recently on Mad Money was technology today drives everything from your refrigerator, home heating, swimming pool, door and window locks, your car your work your banks and the computer chip in your pet so WHY are you not in the tech sector? Add this one - Apple is in the electric car business and who better suited for all the tech wizardry in our cars than Apple? MSNBC said they may produce a car by 2020. Jim Kramer said yesterday Apple is a stock to but and hold forever. I personally do not own Apple but I think I just might grab a few shares to buy and hold after all it made Forrest Gump a rich man!

 

[OnePercenter]

Contrary to your errant post today, right now, today putting 10% percent of one's wages every week is the rule of thumb for a comfortable retirement.

The 10% rule is almost impossible as most Americans live from paycheck to paycheck. Wages overall haven't risen since the 1980's, costs have skyrocketed.

Also, "my generation" got crushed during the several downturns in past decades if they did not watch out and the people I work with today that are half my age and doing very well for themselves perhaps because they are intelligent and you are not.

Your generation did get crushed do to bad investing. However, your earning power was far greater than your kids. That was your saving grace.

The fact that you're still working past retirement age speaks volumes.

The vast majority of working Americans aren't doing well compared with your generation due to buying power.

The subject is money and since you are not literate on this subject I advise you to learn how to make money work for you versus you work for money. Prove your ignorance by taking look at the major indexes under different administrations. Your are foolish and when you are at retirement age you will suffer for not doing something about it much earlier in your life.

My retirement age was 40, which was 17 years ago. I retired very wealthy so I do understand money.

I don't look at indexes, I look at actual costs.

For instance; housing indexes don't include rent, and the way it's done (regionally) doesn't give a true example of actual costs.

For instance, California is the same region as Nevada, but $1000.00/mo will rent you a three bedroom house in Vegas, but in LA, that price will rent you a studio apartment in a bad area of town. How does that compare?

EARNING POWER!

In 1970, a Ford F-350 cost $2700.00 Today it's $50,000.00.

EARNING POWER!

The middle class/American workers are doomed unless something extraordinary happens.

-Base Federal tax for corporations at 30% of revenue.

-Raise minimum wage to $23.50/hr. Based on where minimum wage should be using 1970-2013 rise in food, shelter, and transportation.

-Eliminate all business subsidies (deductions/write-offs/write-downs) except for employee expenses which are deducted dollar-for-dollar on all city, state, and Federal taxes and fees with the Feds refunding city, State, and fees.

-Companies with 400 employees or less, employee expenses above the deduction are subsidized at 100% with funds usually give back to the States.

-Adjust Social Security and private/public retirement and pension payments using 1970-2013 price structure.

-Remove the FICA limit.

-Back down ALL costs, prices, fees, to January 1, 2009 levels and hold them for 10 years which will eliminate inflation.

-Recall ALL off-shore investments tax free, and disallow any further off-shore investments.

-Make inversion illegal.

 

[Brucethethinker]

Personally I enjoy this section of USMB quite a bit, and like discussing financial strategies at length to learn things I've been ignorant of.... The financial adviser I spoke with said that I should buy into mutual funds, turn them into DRIPs...

The MOST IMPORTANT thing for you is to NEVER take an early withdrawal and pay penalty. Don't be putting so much into an IRA that you have to pay credit card interest, etc. In general, NEVER fail to pay your credit cards in full each month. Don't think that you have to have all your IRA cash earning dividends, it can be good to have cash in an IRA. When a great buying opportunity presents itself, you can jump on it if you have cash.

Consider this, the price of oil has totally collapsed. Do you think it will go up by the time you're ready to retire? You can buy UCO for $8.33, and sell a Jan 2017 $14 covered call for $2.20. That makes your cost $6.13. UCO has never been below $ 6.54. If oil is the same on Jan, 2017 as today, you'll have made 35% in 22 months. If it goes to $12.50 you'll double your money. Financial advisers don't know how to invest, they know how to tell other people how to invest. But, you seem to have done well with your VNR. Good luck!

 

[fmdog44]

Contrary to your errant post today, right now, today putting 10% percent of one's wages every week is the rule of thumb for a comfortable retirement.

The 10% rule is almost impossible as most Americans live from paycheck to paycheck. Wages overall haven't risen since the 1980's, costs have skyrocketed.

Also, "my generation" got crushed during the several downturns in past decades if they did not watch out and the people I work with today that are half my age and doing very well for themselves perhaps because they are intelligent and you are not.

Your generation did get crushed do to bad investing. However, your earning power was far greater than your kids. That was your saving grace.

The fact that you're still working past retirement age speaks volumes.

The vast majority of working Americans aren't doing well compared with your generation due to buying power.

The subject is money and since you are not literate on this subject I advise you to learn how to make money work for you versus you work for money. Prove your ignorance by taking look at the major indexes under different administrations. Your are foolish and when you are at retirement age you will suffer for not doing something about it much earlier in your life.

My retirement age was 40, which was 17 years ago. I retired very wealthy so I do understand money.

I don't look at indexes, I look at actual costs.

For instance; housing indexes don't include rent, and the way it's done (regionally) doesn't give a true example of actual costs.

For instance, California is the same region as Nevada, but $1000.00/mo will rent you a three bedroom house in Vegas, but in LA, that price will rent you a studio apartment in a bad area of town. How does that compare?

EARNING POWER!

In 1970, a Ford F-350 cost $2700.00 Today it's $50,000.00.

EARNING POWER!

The middle class/American workers are doomed unless something extraordinary happens.

-Base Federal tax for corporations at 30% of revenue.

-Raise minimum wage to $23.50/hr. Based on where minimum wage should be using 1970-2013 rise in food, shelter, and transportation.

-Eliminate all business subsidies (deductions/write-offs/write-downs) except for employee expenses which are deducted dollar-for-dollar on all city, state, and Federal taxes and fees with the Feds refunding city, State, and fees.

-Companies with 400 employees or less, employee expenses above the deduction are subsidized at 100% with funds usually give back to the States.

-Adjust Social Security and private/public retirement and pension payments using 1970-2013 price structure.

-Remove the FICA limit.

-Back down ALL costs, prices, fees, to January 1, 2009 levels and hold them for 10 years which will eliminate inflation.

-Recall ALL off-shore investments tax free, and disallow any further off-shore investments.

-Make inversion illegal.

"Your generation" has nothing to do with anything. My family was not hit by the depression years as cash was king. Jerks that fell for the internet explosion were not victims of their "generation" rather of their own greediness. Being retired at 40 means you retired at 40 and says nothing about your investment savvy. Our prisons are full of people that were highly paid during their careers. I work at my age because I love what I do and if you were aware of folks my age more and more are continuing to work for the same reason as I do. I will probably go on a few more years depending on the offshore oil business. Trust me I know of very few people in this industry that retired early because they too love the challenge and the money isn't half bad either! It is a great feeling to work when you don't have to you should try it.