Anonymous
07/29/2014 08:11
Subject: Give me your best monetary advice
Anonymous wrote:Anonymous wrote:Anonymous wrote:FYI, I find the CNN/money personal finance 101 series to be pretty helpful-- covers things like insurance, not just investing.
Also, don't try to beat the stock market and don't put money in the stock market you need in the next 5 years-- just look for a low cost index fund and leave the money there during ups and downs.
Surely, it is fine to purchase some diversified ETFs like VTI and VWO, however you will benefit from owning individual corporate equities. The best way to learn to play soccer, poker, or the stock market is to be in the game. Index Funds are sure and steady and perfect for individuals who don't have the time or the interest to closely follow the economy and the stock market. Index funds like VTI, own shares in 500 different corporations which creates stability. At any given moment in time the price of some of those corporations will be increasing and some will be decreasing. On average your wealth will increase by roughly 5% annually.
For the disengaged investor that's fine. You're not getting rich but your not losing money either. At retirement you'll be comfortable, but not rich.
The problem with this approach is that you're not really in the game. You're not learning how the investment game is played. If you are not investing whatsoever in individual companies you have no vested interest keeping track what companies are going up or down and why these changes are taking place. If you allow and even pay someone else to make you investment decisions for you, you are essentially putting on blinders to opportunities that regularly appear in the stock market.
If you are to busy or not interested in the stock market, then by all means you should buy nothing but index funds. However, if you are watching the world around you and you are conscious of macro economics and the consumer goods you and others are buying then you have the innate skills individuals need to generate vast wealth in the stock market over a period of several decades.
Start by buying shares in well established companies which have increased their dividends annunually for decades. Automatically reinvest your dividends to purchase more shares. During these future years as an engaged investor you will develop an innate sense about the successfulness of your equities and other that you do not own as well. It's like being a Nats fan, but also having a sense as to how the Braves are doing as well.
Now and then for unforeseen reasons there will be instances when good well established companies will miss their projected earning numbers and the price of their shares will be crushed. Sometimes these companies are doomed, but in other instances there are other explanations like weather, supply chain disruptions, or even the banking crisis.
"Contrarians" are able to spot rapid stock price declines cause by temporary business anomalies.
For those who are engaged in the market huge quantities of wealth can be gained by contrarians when they spot these temporary price disruptions. If you are so inclined you can accumulate generational wealth in the stock market, but for those who lack this potential, interest, or skill set required the learn they should buy index funds.
This is terrible advice. Its wrong on so many levels. I'm not going to criticize every crap idea here, but here's one that I can't let stand: Picking stocks isn't a skill. It is luck only, no different than playing roulette.
NP here - I disagree with the roulette/luck comment and generally agree with the long-winded post about the benefits of investing in stocks. I have learned a ton over the years from researching individual companies and making targeted investments. I would never put a huge portion of my savings at risk, but it's fun and rewarding it to have a small individual stock portfolio once you have are set with an emergency account plus other savings.
It's not random luck either. My stock investments have performed spectacularly, as have those of most people I know to really get into the research.
Anonymous
07/29/2014 07:06
Subject: Give me your best monetary advice
Anonymous wrote:Anonymous wrote:God will teach you to be content. Contentment with godliness is a great gift
What is this GOD that you talk about?
That is an exercise for the student.
Back on topic: Keep it simple. If you dont understand the investment, or offer, pass it by.
Anonymous
07/28/2014 19:12
Subject: Give me your best monetary advice
Get the 401k match if your job offers one.
Contribute max to Roth.
Buy a house/condo and get a roommate to help you pay for it.
Stop buying stuff-beautiful well-cared people look good even in a potato sack.
Don't buy a car if possible, not even a used one. Lower your utilities if possible.
Pick up a part time job at the bar-hostess, bartender, barista.You'll make money while out on Firday/Saturday.
Contribute max to Roth.
Buy a house/condo and get a roommate to help you pay for it.
Stop buying stuff-beautiful well-cared people look good even in a potato sack.
Don't buy a car if possible, not even a used one. Lower your utilities if possible.
Pick up a part time job at the bar-hostess, bartender, barista.You'll make money while out on Firday/Saturday.
Anonymous
07/28/2014 16:23
Subject: Give me your best monetary advice
Use all available benefits. For credit cards, find a good rewards program and use your points. If you spend enough (we spend $4-6k on credit cards every month), then paying an annual fee may be worth it, but there are plenty of free options too. Sign up for frequent flier miles and hotel rewards programs. Use your healthcare FSA and commuter benefits. If you get a matching 401(k), match and max it out.
I completely agree with the don't-carry-a-balance advice, but IF you do find yourself in that situation, don't be afraid to try to negotiate with the credit card company for a lower temporary interest rate. I did this a couple years ago when I found myself having to carry forward a large expense until I started a new job and it can make a big difference. If they say no, they say no, no big deal.
I completely agree with the don't-carry-a-balance advice, but IF you do find yourself in that situation, don't be afraid to try to negotiate with the credit card company for a lower temporary interest rate. I did this a couple years ago when I found myself having to carry forward a large expense until I started a new job and it can make a big difference. If they say no, they say no, no big deal.
Muslima
07/28/2014 16:19
Subject: Give me your best monetary advice
Spend less than you make....
Anonymous
07/28/2014 15:40
Subject: Give me your best monetary advice
Anonymous wrote:God will teach you to be content. Contentment with godliness is a great gift
What is this GOD that you talk about?
Anonymous
07/28/2014 15:22
Subject: Re:Give me your best monetary advice
To the OP...
1. You need to establish a budget. How much do you net after payroll taxes? What are your costs to survive? Food/Clothing/Shelter/Transportation are necessities... and go from there. You will only get ahead if you leave yourself a surplus each month (i.e. saving money versus going further into debt).
2. You need an emergency fund. This is basically a self-insurance policy against the smaller things in life (that say health, car, home insurance won't cover). Major car repair? Your A/C in your house go out (assuming you own)? Medical procedure needed? Recommendation of 3-6 months of expenses, depending on situation (risk of losing job, married or not, kids, etc).
3. Develop a savings/investing plan. Research job-sponsored plans with a match. Leverage Roth IRAs beyond that.
I could go on and on but as others have said... Pay cash for cars. Buy used vehicles. Drive them for many years (8+, 100k miles+). Leasing vehicles doesn't make you wealthier. People lease because it's the easiest way to keep up with the Jones'. If that's what your goal is, then by all means... but if you truly want to be wealthy, it takes dedication.
After all, we can only judge the people around us by the clothes they were, the cars they drive, the homes they have, the vacations they take. We have no idea on whether they're leasing that car, whether they're on a subprime mortgage and upside down, how much of that vacation is still on the ole credit card that they're still paying. We have no concept of what each other's "net worth" is...
So think of ways to increase your net worth... and those include paying down debts and accumulating wealth (savings/investing). If you're making a decision that's detrimental to that, then you aren't helping yourself move in a forward direction financially.
1. You need to establish a budget. How much do you net after payroll taxes? What are your costs to survive? Food/Clothing/Shelter/Transportation are necessities... and go from there. You will only get ahead if you leave yourself a surplus each month (i.e. saving money versus going further into debt).
2. You need an emergency fund. This is basically a self-insurance policy against the smaller things in life (that say health, car, home insurance won't cover). Major car repair? Your A/C in your house go out (assuming you own)? Medical procedure needed? Recommendation of 3-6 months of expenses, depending on situation (risk of losing job, married or not, kids, etc).
3. Develop a savings/investing plan. Research job-sponsored plans with a match. Leverage Roth IRAs beyond that.
I could go on and on but as others have said... Pay cash for cars. Buy used vehicles. Drive them for many years (8+, 100k miles+). Leasing vehicles doesn't make you wealthier. People lease because it's the easiest way to keep up with the Jones'. If that's what your goal is, then by all means... but if you truly want to be wealthy, it takes dedication.
After all, we can only judge the people around us by the clothes they were, the cars they drive, the homes they have, the vacations they take. We have no idea on whether they're leasing that car, whether they're on a subprime mortgage and upside down, how much of that vacation is still on the ole credit card that they're still paying. We have no concept of what each other's "net worth" is...
So think of ways to increase your net worth... and those include paying down debts and accumulating wealth (savings/investing). If you're making a decision that's detrimental to that, then you aren't helping yourself move in a forward direction financially.
Anonymous
07/27/2014 23:09
Subject: Give me your best monetary advice
God will teach you to be content. Contentment with godliness is a great gift
Anonymous
07/27/2014 21:09
Subject: Give me your best monetary advice
Anonymous wrote:Anonymous wrote:Anonymous wrote:Tithe. 10% of your income to the church. God will provide and you will also be free of the trappings of materialism
Or 10% to charities if you can afford it. Whatever floats your boat.
but if you do not tithe, then you are robbing God.
There is no IF. God will provide and you shall not want
I think many people believe that.
I spent my money and bought someone a gift, that someone sent me a card thanking God for the gift!