Investing the first $5,000

[Anonymous]

Anonymous wrote:

Anonymous wrote:What's with the plastics comment?

it's a classic quote from a classic movie

Its from the "Graduate" circa 1968-69. It was kind of a double entendre in the hippie/new age era. Dustin Hoffman was a straight laced kid who was just graduating from college. He was at kind of a stuffed shirt throw back to the 50s cocktail party. During an awkward uncomfortable conversation with a Xerox/Kodak/IBM middle-management type guy wearing a plaid polyester blazer and Double-Windsor knotted tie the gentle in an unsolicited way told Dustin Hoffman that "plastics" was the the business of the future and the business in which Hoffman should make his career.

The double-entendre can be found in the fact that an over-the-hill paunchy middle aged guy was telling this young man who had many questions about himself, society, and his future that he should mindlessly peruse the same kind of seemingly meaningless life in a 30 year old technology and become one more conforming establishment guy as was this paunchy man in his polyester plaid blazer standing before him.

The second half of the double-entendre was the for the hippie/new age youth of the 60s plastics were synonymous with being phony and dishonest. Dishes which were once hand-tossed and made from ceramics were now made of plastics. Clothes which were on e made of cotton and wool were now being made from polyester. Thousands of goods which were once made by artisans from natural material were now being mass produced in high-pressure injection plastics molding machines.

At any rate the word plastic became synonymous with everything the hippies viewed as being phony about the society in which we lived and the goods in which we purchased and consumed.

[Anonymous]

Sorry for the typos. I'll proof my work in the future.

[Anonymous]

Anonymous wrote:Vanguard Target retirement funds have a $1000 minimum and flavours from 60% bonds to 90% stocks for every risk tolerance level. The important thing is to max out your tax sheltered options before doing anything in taxable.

I'm the poster who keeps going on about I-bonds. They're guaranteed to keep up with inflation and if you use them for college the interest isn't taxed. You can't redeem them for a year past purchase, but they otherwise make excellent vehicles for emergency savings.

I-Bonds fixed rate component is at zero for the next 6 months. Treasury issued bonds have been in a trough for over a decade. What are you talking about?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Vanguard Target retirement funds have a $1000 minimum and flavours from 60% bonds to 90% stocks for every risk tolerance level. The important thing is to max out your tax sheltered options before doing anything in taxable.

I'm the poster who keeps going on about I-bonds. They're guaranteed to keep up with inflation and if you use them for college the interest isn't taxed. You can't redeem them for a year past purchase, but they otherwise make excellent vehicles for emergency savings.

I-Bonds fixed rate component is at zero for the next 6 months. Treasury issued bonds have been in a trough for over a decade. What are you talking about?

NP, but i-bonds composite rate is at 1.76% right now-- which is a pretty good rate for a emergency savings fund that is 100% safe (no risk of loss of principal, plus a guarantee that returns will keep up with inflation), not to mention tax deferred and liquid (after a year).

[Anonymous]

Take the 5k to the roulette wheel bet on red 50/50 you double your $$

[Anonymous]

Anonymous wrote:Take the 5k to the roulette wheel bet on red 50/50 you double your $$

"Well, let me give you a little advice: ALWAYS BET ON BLACK."

[Anonymous]

just buy the Vanguard S&P index. It has one of the lowest expense ratios.
over 90% active managed funds underperform indexes.

[Anonymous]

You might want to try a mixed fund with different asset classes, including stocks and bonds. The fees will be a little higher than an index fund, but you will be able to diversify even a relatively small amount and with little work on your end.

[Anonymous]

E.g., Vanguard Balanced Fund or some such.

[Anonymous]

What's important is that you've started. You've decided to be a capitalist. Five thousand dollars is good place to begin your journey to wealth and comfort. You are asking the right questions and in time you'll accumulate wealth and knowledge. It's amazing that we live in a country where we enjoy the benefits of having a hybrid capitalist/socialist economy and yet so few individuals ever attempt to create wealth through capital accumulation.

Identifying oneself as capitalist has almost become pejorative - very strange. Save money when you can, keep your head up and eyes open for opportunities when they appear, don't be swayed by individuals who lack your vision and insights, and finally don't quit when some of your investments fail Most investors successfull capitalists at one time or another have suffered serious financial losses. These events occurred as results of their own mistakes or simple market fluctuations. However the key to success is keep your dream alive. Get back up on your feet, dust yourself off and jump back into the game, the fray, and the work of accumulating super-wealth.

Last week I heard Warren Buffett say that over the years Bershire Hathaway has on three different occasions lost 50% of its corporate value. So it seems even the Oracle of Omaha has less than stellar trading days now and then.

Starting now with your five-thousand dollars and a keen interest in making it multiply you will one day live well as a successful CAPITALIST.

[Anonymous]

All 5k to Roth IRA!

[Anonymous]

Anonymous wrote:All 5k to Roth IRA!

That's actually more sensible then it seems on the surface, as long you invest it conservatively (cf. http://www.bogleheads.org/wiki/Roth_IRA_as_an_emergency_fund)- however, the poster in question is 20. That conservative investing is draining your compounding potential. That's the point in life where some Dave Ramsey style sacrifice to build an emergency fund AND fully fund a roth IRA in something appropriately risky can really pay off, both when you get around to starting a family and in retirement.

[Anonymous]

Learn how to count cards then go to the casino!