Investments

[Jmhoff10500]

So i just turned 18 and am looking for some sound investments to start off my life... Has anyone ever successfully got into the stock market or had any good experiences with government saving bonds or anything? I figure that while im young and single, i might as well take some risks, and if i can, start giving my money some time to grow... Thanks!

 

[Phunky_2003]

I have but while what I did worked to make me happy I wouldn't give financial advice to anyone else. I think your best bet is to seek out a well established financial advisor. You can give them your plans and ideas on what exactly you are looking for and your goals. They can give you your best options. I do think its a good idea for all young adults start saving in somekind of retirement plan.

 

[aggromere]

I'm retired from the investment and financial services industry. The most powerful financial planning or savings tool is time. At 18 you have more than most. Start out by doing the following:

1. Put $2,000 a year, or whatever you can afford, into a ROTH IRA every year.
2. Max out your contributions to your employers 401(k) plan. If they don't have one try to get them to start one. They don't have to make any contributions, they can just make it available as a payroll deduct plan.
3. Establish an emergency fund equal to 6 months of your total expenses.
4. Don't buy any permanent life insurance or variable or fixed annuities.

those are just a few of the things of would do if I had it to do over. An 18 year old can contribute to an IRA for 10 years, and a 30 year old till he is 65 and when they both reach age 65 they will have the same amount of money. So starting early and being consistent are really important. Just my 2cents worth. good luck.

 

[maxwell_smart007]

I just started a retirement savings plan last month - not much in it now, but i've got 35 years before I'll need it.


Andrew

 

[Russianwolf]

two thing that I don't recommend anytime soon.

1)DON'T get married. married life is more expensive than you could imagine.

and advice I give to everyone.

2)DON'T buy a house as an investment. Buy a house if you plan on living there, the housing market is just a volatile as the stock market. Meaning you stand as much of a chance on loosing value as gaining. neighborhoods, cities, and other factors will raise and fall in stature and value over time.

 

[David Keller]

I'm not a financial advisor, but the Roth advice is very sound. Any tax free investment vehicle you can manage will allow you to compound on money that you would have otherwise already paid in taxes.

No load index funds are an easy way to get broad exposure to the stock market. Vanguard and several other mutual fund families offer index funds with very low expenses.

I would generally avoid "full service" brokers due to the high cost of transactions.

Kudos to you for starting early. I think the other key is to be as consistent as possible about putting money away. That's just my .02.

 

[johnnycnc]

Jonathan,
I commend you for having such vision at only 18 years old.
I'm not one to advise, but I would say Peter has given you some good pointers.

John

 

[Smitty37]

Financial Advice

Well here is a couple of rules of thumb.

Don't be a band wagon jumper...I think Warren Buffet still owns the first stock he ever bought.

If you buy a stock ask yourself this question "If this stock dropped 50% tomorrow would I still want to own it?" If the answer is "no" don't buy the stock.

Diversify...based on your age you should think about more in stocks or tangible assets (like gold) and less in bonds as you get older the ratio changes.

Keep in mind that investing in a Roth IRA (or any other IRA or SEP) you still need to decide how to invest the money at the current interest rates just depositing cash into an IRA will never earn you enough to retire...It takes a long time to double your money at 1% interest....72 years.

The idea behind savings is to build a reserve that will carry you for 6 months then start thinking about investing. Make your first investments in things that can be converted to cash easily.

Make sure you understand you capacity to handle risk If you can't handle risk make sure you invest in low risk insturments...you need to live with your investments and you don't want them to keep you awake at night.

Then there is this one....Trust in the Lord...the Lord does provide if you let him. I'm over 70 and I have never lost a wink of sleep in my life worrying about money and never will.

 

[PaulDoug]

Get reference for a good financial adviser, they are not all equal.

 

[ed4copies]

One caveat: The Roth IRA is created by Congress with the promise it will be able to be withdrawn at retirement, with its gains, tax exempt.

Has the government EVER changed its rules, that you can remember?

Do you believe they will be looking for ways to gain tax revenue as they spend more and more?

Now, in a decade, people will be withdrawing their Roth money, that could EASILY be double what they contributed. Can you IMAGINE the law changing to TAX that 100% GAIN???? Just like money you inherit, why shouldn't the government take THEIR chunk???

Youth is a great advantage, and you WILL gain much if you invest now. But you have no way of controlling what you will KEEP.

Good luck--Remember when you vote, you get what the majority wants---not what YOU want.

 

[nava1uni]

Good for you in wanting to get ahead on the process of building your cushion of economic. I suggest that you do some reading and learn about economics. I would recommend for starters Investing for Dummies; Rich Dad, Poor Dad; start reading the business section and learning where there are trends in the market, mutual bonds, etc. Take a class about investing-it will be an investment that you will reap the benefits from later down the line.