SteadyMercury
Gold Member
- Jan 1, 2013
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I don't understand the "at this point in your life" I don't think there is ever a point in one's life where correctly managing your personal finances becomes less relevant.
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I recommend you attend Financial Peace University through Dave Ramsey. I disagree with Dave on a few points though.
His advice is to own 4 mutual funds, on Large Cap, One Growth fund, one other stock fund and one international fund (it's been a few years--don't remember all the details). I rejected the last two and doubled up on the large cap and took the International Fund and invested in a fund that had a mix of bonds and stocks.
These are designed (in the pan) to be held for 5+ years. I have funds with Vanguard, Fidelity, and another company.
The second way I disagree with Dave is to "NEVER" own individual stocks. I own a large chunk of a stock that pays $0.60-$0.70 per quarter so every 3 months from that company, I get a check for a few hundred dollars. A second company is set up similarly but is on a "different clock" and it pays every 3 months as well but on different months. So, in September, company A will pay off and in November, company B will pay off.
So I can take a mini vacation just about every 3 months. Sometimes, I re-invest the dividends, sometimes not.
A third way I disagree is with his wanting 15% of your earnings into IRAs. I was vested from my public health days so I'm a bit insulated by my pension. Even if I wasn't, I would not put that much into the IRA. My family has a history of dying early so I don't put that much interest into retiring gracefully. Never quite understood why people would wait until they are immobile and of poor eyesight to travel and see the sights. I'm seeing what I can see NOW!!!
There is a bunch of religious stuff in FPU as well. I think it's best ignored although I do follow his advice about giving regularly.
I'm learning more about investing. The main thing that has been holding me back are some feelings of apprehension. Experience is what I need and the only way I'll get it is by trying out more and different kinds of investments.
Dividends are nice, but I think if I wise up and focus on timing, I could make a lot in capital gains. Still learning about earnings per share (EPS), sector index funds, and trying to best understand how to predict the stock market. My reasoning is that the economy is made based on human needs. If I can figure more out about how people are changing, I can use that to figure out how the market is changing. If I were to invest in a sector index, health care would be it, followed by housing (REITs?), and scientific technology. The population continues to grow unhindered, so there will be more patients in need of care: ergo, more hospitals,
Planning to use bye/sell stock limits to make it easier to trade, while preventing slippage. I want the sense of reassurance knowing that dividends will continue pouring in while the index fund slowly grow in value. I feel like the young man who envisions hard-earned wealth through investing and trading... yet has done little with his money because of fear. It's tough, especially when you have to research select companies with whatever resources you have which, sometimes, is just paper and a pen.
I'm not earning enough $$$ to afford recklessness in vestments. If I put $800 into a stock and it crashes, that will be a stinging loss. I'll try a sector index fund first.
I'm learning more about investing. The main thing that has been holding me back are some feelings of apprehension. Experience is what I need and the only way I'll get it is by trying out more and different kinds of investments.
Dividends are nice, but I think if I wise up and focus on timing, I could make a lot in capital gains. Still learning about earnings per share (EPS), sector index funds, and trying to best understand how to predict the stock market. My reasoning is that the economy is made based on human needs. If I can figure more out about how people are changing, I can use that to figure out how the market is changing. If I were to invest in a sector index, health care would be it, followed by housing (REITs?), and scientific technology. The population continues to grow unhindered, so there will be more patients in need of care: ergo, more hospitals,
Planning to use bye/sell stock limits to make it easier to trade, while preventing slippage. I want the sense of reassurance knowing that dividends will continue pouring in while the index fund slowly grow in value. I feel like the young man who envisions hard-earned wealth through investing and trading... yet has done little with his money because of fear. It's tough, especially when you have to research select companies with whatever resources you have which, sometimes, is just paper and a pen.
I'm not earning enough $$$ to afford recklessness in vestments. If I put $800 into a stock and it crashes, that will be a stinging loss. I'll try a sector index fund first.
Are you totally out of debt with the exception of your housing? If the answer is "no", aside from retirement planning, you shouldn't be investing in anything.
How will he know what his returns will be to make this decision? That is why it isn't an apples to apples comparison, you can't compare the known interest rate of debt to a potential return (or loss).If you are paying less than your return in interest, it is still better to invest and pay down the debt overtime.
Same friends always win in Vegas too.Sure, your friends will tell you about their big gains in a stock, but they somehow forget to mention all the dogs they bought.
You know stock mutual funds throw off dividends every quarter too right?The second way I disagree with Dave is to "NEVER" own individual stocks. I own a large chunk of a stock that pays $0.60-$0.70 per quarter so every 3 months from that company, I get a check for a few hundred dollars. A second company is set up similarly but is on a "different clock" and it pays every 3 months as well but on different months. So, in September, company A will pay off and in November, company B will pay off.
Seeing things now isn't mutually exclusive to using tax advantaged retirement savings vehicles.I would not put that much into the IRA. My family has a history of dying early so I don't put that much interest into retiring gracefully. Never quite understood why people would wait until they are immobile and of poor eyesight to travel and see the sights. I'm seeing what I can see NOW!!!
How will he know what his returns will be to make this decision? That is why it isn't an apples to apples comparison, you can't compare the known interest rate of debt to a potential return (or loss).If you are paying less than your return in interest, it is still better to invest and pay down the debt overtime.
That is a completely different issue, he might already have an emergency fund parked in something safe. If he doesn't then we aren't talking about investing, we're talking about first building up an emergency fund in something like a savings or money market account, then looking to invest. He's talking about stock funds so we can assume he's investing.doesn't matter. if you put it all into debt and you lose your job, you have nothing but a smaller amount to discharge. At least with investment you have a potential to have something to cash out and survive on.
That is a completely different issue, he might already have an emergency fund parked in something safe. If he doesn't then we aren't talking about investing, we're talking about first building up an emergency fund in something like a savings or money market account, then looking to invest. He's talking about stock funds so we can assume he's investing.doesn't matter. if you put it all into debt and you lose your job, you have nothing but a smaller amount to discharge. At least with investment you have a potential to have something to cash out and survive on.
And what are you talking about discharge?
No, it isn't. An emergency fund doesn't belong anywhere that can lose money.I can go on the interweb and put a sell order in and have my money in a few day. That is emergency fund enough.
You clearly don't understand what an emergency fund is, it doesn't get invested in individual stocks.already posted to him my strategy of buying individual stocks. even if you buy steady stocks like MSFT that don't burn the doors down, you are going to be better off over time than putting the money in a .45%APR savings account.
No, it isn't. An emergency fund doesn't belong anywhere that can lose money.I can go on the interweb and put a sell order in and have my money in a few day. That is emergency fund enough.
You clearly don't understand what an emergency fund is, it doesn't get invested in individual stocks.already posted to him my strategy of buying individual stocks. even if you buy steady stocks like MSFT that don't burn the doors down, you are going to be better off over time than putting the money in a .45%APR savings account.
MSFT steady? That is hilarious, steady except for those occasional > 50% drops:
There is a place for stock investing, but it sure as hell isn't individual tech stocks in an emergency fund and it also isn't comparable to paying off debt based on speculative returns. You are giving absolutely terrible personal finance advice.