How do I learn to be a savvy investor?
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Anonymous
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My dh and I are not educated when it comes to investing. Fortunately we are both good at living within our means and saving, but we rarely talk about finances, because we are both clueless.
I'd like to become well-versed in investing. Where do I start? Is there a book, website, or course I can take? Right now I think we have too much liquidity- we need to put it to work for us. 401k is maxed and we are making extra payments on our house, but other than that, we are not investing in anything. We've been toying with the idea of buying a rental property in our neighborhood. Tia!!! |
Anonymous
| Don't get too fancy. That's the key to smart investing. Put it in a Vanguard Index fund. Then watch it grow over time. |
Anonymous
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Agree.
Check out the bogleheads forum. A great place to learn. |
Anonymous
| bogleheads forum and their wiki is a great recommendation. |
Anonymous
Agree with this ..... and follow the KISS principle. One variation I use with regard to a part of my funds in my retirement funds is to go into cash on May 31 and back into the index fund on November 1. This is based on studies done that show this approach results in higher returns overall. Still very simple since it happens once a year. Yes, it is a variant of market timing but has nothing to do with having to make an evaluation that the market is too high or too low. |
Anonymous
| Thanks for the advice!!! The bogle head forum looks like it has a wealth of info, much appreciated! |
Anonymous
| Elements of Investing! |
Anonymous
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Vanguard index funds, but read everything on Joshua Kennon's site, and all his articles on About.com.
Also read Mr. Money Mustache for fun and inspiration. |
Anonymous
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Start off simple. If you just want to invest in the "market" -- invest in an S&P ETF or Vanguard Fund that gives you exposure to the S&P; that means that if the S&P goes up 5%, your money goes up 5%.
Then once that's done, you can see if you're interested in certain sectors. If you want additional exposure in a couple sectors like technology or healthcare or real estate, you can put additional funds into a mutual fund or ETF that invests ONLY in that sector. The key difference between mutual funds and ETFs is that a mutual fund is actively managed by a portfolio manager who picks/chooses what stocks to hold and when to sell while an ETF is algorithmic /automatic investing done by computer programs. ETFs have lower expenses (usually) than mutual funds bc you're not getting active management -- but in certain more volatile sectors, active management is worth the fee. Overall just keep it simple -- S&P index funds and large mutual funds run by Vanguard or Fidelity. It's when people get cute that they lose money or make less money than the overall market. I wouldn't attempt to pick individual stocks. While I'm not opposed to buying income property -- be very sure about what you're getting into -- i.e. what expenses will you have for mortgage/taxes/HOA vs. what rent can you command AND is it an area where you can consistently keep your property rented AND do you need a property manager for maintenance/repairs etc. and how will that eat into your rental income. I have always thought of buying rental property and then every time, I research for a couple weeks and decide -- let me just throw $ in the market with a few clicks of the mouse; it's just easier with a more "immediate" return. |
Anonymous
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agree with advice above about KISS and bogleheads
Also, check out some basic books from the library or read columns by Jane Bryant Quinn, Michelle Singletary, Dave Ramsey, Suze Orman, etc. Also the personal finance section of CNN Money has some good articles. |
Anonymous
| Make sure you are taking full advantage of any company retirement programs, particularly if they are matching. |
Anonymous
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Get Bogleheads book. Also maybe a Suze Orman--the cover pics are a bit much but she really breaks things down to basics well. There are probably other good ones, but these are two I know that help with big picture understanding and basic knowledge. Both also have healthy skepticism of financial advisor and products industry. Basically you want advice about how to invest and manage money for long haul, not get sucked into trying to beat the market or otherwise get take for a rise by the industry.
The good news -- it's not rocket science. You can learn and you will! Good luck. |
Anonymous
| It is like learning anything, it takes time and effort. Take a beginning investor class. Join an investment club that meets regularly to discuss and make small investments. |
Anonymous
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Bogleheads
Biggerpockets Mr money mustache. |