Author Topic: New To Investing Thread  (Read 327083 times)

0 Members and 2 Guests are viewing this topic.

Offline ben ji

  • Senior Moderator
  • PCKK7DC Survivor
  • Pak'r Élitaire
  • *******
  • Posts: 11565
  • Alot of people dont hit on an 18
    • View Profile
New To Investing Thread
« on: April 16, 2013, 10:41:46 AM »
Side shot from the General Advice thread.... See below for ben ji's investing advice.

1. Contribute at least the max that your employer will match to your company 401k....Does not matter how poor you are or how much student debt you have, this is free money.

2. Once you have contributed to enough to get the full match to your company 401k and you still have more money to invest you have some options. You can keep putting more money in the 401k or you can open a Roth IRA.

But ben ji, why put it in a roth ira and not keep it in the 401k?

Well....

1. Roth IRA is after tax money and will not be taxed when you take it in retirement. If you are just starting out you will probably be a lower tax rate now than when you retire.

2. You have more investment options with an IRA. This allows you to find funds with lower expense ratio's and more targeted investing than your 401k Options.


(Want to get rid of the ad? Register now for free!)
« Last Edit: April 16, 2013, 10:47:17 AM by ben ji »

Offline 0.42

  • Pak'r Élitaire
  • ****
  • Posts: 7746
  • pasghetti
    • View Profile
Re: New To Investing Thread
« Reply #1 on: April 16, 2013, 10:42:28 AM »
buy low, sell high

Offline Rage Against the McKee

  • Pak'r Élitaire
  • ****
  • Posts: 37048
    • View Profile
Re: New To Investing Thread
« Reply #2 on: April 16, 2013, 10:45:40 AM »
I contribute enough to my 401k to max out the employer match, and then I use the rest of my spare money purchasing stocks.

Offline Emo EMAW

  • PCKK7DC Survivor
  • Pak'r Élitaire
  • *******
  • Posts: 17891
  • Unrepentant traditional emobro
    • View Profile
Re: New To Investing Thread
« Reply #3 on: April 16, 2013, 10:47:41 AM »
I contribute enough to my 401k to max out the employer match, and then I use the rest of my spare money purchasing stocks.

General trading account?  Wife and I been maxing the Roth IRA contribution the last few years and now we wish we would have been doing just a general trading account for the purpose of pulling out cash to buy a new house.

Offline 'taterblast

  • Pak'r Élitaire
  • ****
  • Posts: 16725
  • Hi, I'm James McGill.
    • View Profile
Re: New To Investing Thread
« Reply #4 on: April 16, 2013, 10:48:38 AM »
of all the "wealth" i have to my name currently, a little less than 20% of it is actual cash that i could spend right now.

is this bad?

Offline The Tonya Harding of Twitter Users Creep

  • Pak'r Élitaire
  • ****
  • Posts: 9740
    • View Profile
Re: New To Investing Thread
« Reply #5 on: April 16, 2013, 10:49:19 AM »
I need to invest money in stocks. What's my best route here... Scottrade? I kinda just want someone to take my money and then just tell me when I'm a millionaire. I know nothing about stocks and don't really have the time to pay a whole lot of attention to them.
I think what my friend Mitch is trying to say is that true love is blind.

Offline steve dave

  • Global Moderator
  • Pak'r Élitaire
  • *****
  • Posts: 85174
  • Romantic Fist Attachment
    • View Profile
Re: New To Investing Thread
« Reply #6 on: April 16, 2013, 10:49:41 AM »
I contribute enough to my 401k to max out the employer match, and then I use the rest of my spare money purchasing stocks.

you are pissing away some good tax breaks broseph

Offline steve dave

  • Global Moderator
  • Pak'r Élitaire
  • *****
  • Posts: 85174
  • Romantic Fist Attachment
    • View Profile
Re: New To Investing Thread
« Reply #7 on: April 16, 2013, 10:50:24 AM »
of all the "wealth" i have to my name currently, a little less than 20% of it is actual cash that i could spend right now.

is this bad?

depends how much "wealth" you have. normally that would be way too much in cash.

Offline 'taterblast

  • Pak'r Élitaire
  • ****
  • Posts: 16725
  • Hi, I'm James McGill.
    • View Profile
Re: New To Investing Thread
« Reply #8 on: April 16, 2013, 10:51:16 AM »
of all the "wealth" i have to my name currently, a little less than 20% of it is actual cash that i could spend right now.

is this bad?

depends how much "wealth" you have. normally that would be way too much in cash.

yeah it's not that much so i'm probably ok.

Offline Emo EMAW

  • PCKK7DC Survivor
  • Pak'r Élitaire
  • *******
  • Posts: 17891
  • Unrepentant traditional emobro
    • View Profile
Re: New To Investing Thread
« Reply #9 on: April 16, 2013, 10:51:18 AM »
I contribute enough to my 401k to max out the employer match, and then I use the rest of my spare money purchasing stocks.

you are pissing away some good tax breaks broseph

Depends.  Probably a safe assumption tax rates when we retire will be higher.  Better to pay the income tax up front and not pay it later.  At least that's my way of looking at it.

Offline steve dave

  • Global Moderator
  • Pak'r Élitaire
  • *****
  • Posts: 85174
  • Romantic Fist Attachment
    • View Profile
Re: New To Investing Thread
« Reply #10 on: April 16, 2013, 10:52:15 AM »
I contribute enough to my 401k to max out the employer match, and then I use the rest of my spare money purchasing stocks.

you are pissing away some good tax breaks broseph

Depends.  Probably a safe assumption tax rates when we retire will be higher.  Better to pay the income tax up front and not pay it later.  At least that's my way of looking at it.

it doesn't depend at all. he can either put it in a roth or contribute more than his employers match to his 401k until he hits his personal max. either way it's a tax break over buying stocks (not taking into account potential gain/loss). he would be losing liquidity if that is a factor.

Offline Emo EMAW

  • PCKK7DC Survivor
  • Pak'r Élitaire
  • *******
  • Posts: 17891
  • Unrepentant traditional emobro
    • View Profile
Re: New To Investing Thread
« Reply #11 on: April 16, 2013, 10:57:55 AM »
I contribute enough to my 401k to max out the employer match, and then I use the rest of my spare money purchasing stocks.

you are pissing away some good tax breaks broseph

Depends.  Probably a safe assumption tax rates when we retire will be higher.  Better to pay the income tax up front and not pay it later.  At least that's my way of looking at it.

it doesn't depend at all. he can either put it in a roth or contribute more than his employers match to his 401k until he hits his personal max. either way it's a tax break over buying stocks with after tax money and getting hit again when he sells them.

Well a Roth is an after tax contribution.  So no tax break there.  You might be thinking of a traditional IRA?

Agree on the 401k, although mine won't let me purchase anything other than the two dozen funds they offer (Prudential).

Offline steve dave

  • Global Moderator
  • Pak'r Élitaire
  • *****
  • Posts: 85174
  • Romantic Fist Attachment
    • View Profile
Re: New To Investing Thread
« Reply #12 on: April 16, 2013, 10:58:32 AM »
I contribute enough to my 401k to max out the employer match, and then I use the rest of my spare money purchasing stocks.

you are pissing away some good tax breaks broseph

Depends.  Probably a safe assumption tax rates when we retire will be higher.  Better to pay the income tax up front and not pay it later.  At least that's my way of looking at it.

it doesn't depend at all. he can either put it in a roth or contribute more than his employers match to his 401k until he hits his personal max. either way it's a tax break over buying stocks with after tax money and getting hit again when he sells them.

Well a Roth is an after tax contribution.  So no tax break there.  You might be thinking of a traditional IRA?

Agree on the 401k, although mine won't let me purchase anything other than the two dozen funds they offer (Prudential).

I'm not 100% certain you understand how a Roth works (I'm actually 100% certain you don't).

Offline Rage Against the McKee

  • Pak'r Élitaire
  • ****
  • Posts: 37048
    • View Profile
Re: New To Investing Thread
« Reply #13 on: April 16, 2013, 11:00:01 AM »
I contribute enough to my 401k to max out the employer match, and then I use the rest of my spare money purchasing stocks.

General trading account?  Wife and I been maxing the Roth IRA contribution the last few years and now we wish we would have been doing just a general trading account for the purpose of pulling out cash to buy a new house.

Yeah, I use TD Ameritrade. I basically had the same idea, that it would be nice to be able to just take out money whenever I wanted for major purchases, while I still have my tax-exempt account that I can't touch until I'm 65. I really just do that because I enjoy it, though.

Offline ben ji

  • Senior Moderator
  • PCKK7DC Survivor
  • Pak'r Élitaire
  • *******
  • Posts: 11565
  • Alot of people dont hit on an 18
    • View Profile
Re: New To Investing Thread
« Reply #14 on: April 16, 2013, 11:00:20 AM »
I need to invest money in stocks. What's my best route here... Scottrade? I kinda just want someone to take my money and then just tell me when I'm a millionaire. I know nothing about stocks and don't really have the time to pay a whole lot of attention to them.

Just get a roth IRA, its very simple. I have mine through fidelity and it took about 10 minutes to set up. No minimum starting amount if you set up direct deposit every month.

If you want something where you just invest it and forget it just buy an index fund.

Offline ben ji

  • Senior Moderator
  • PCKK7DC Survivor
  • Pak'r Élitaire
  • *******
  • Posts: 11565
  • Alot of people dont hit on an 18
    • View Profile
Re: New To Investing Thread
« Reply #15 on: April 16, 2013, 11:01:26 AM »
I contribute enough to my 401k to max out the employer match, and then I use the rest of my spare money purchasing stocks.

General trading account?  Wife and I been maxing the Roth IRA contribution the last few years and now we wish we would have been doing just a general trading account for the purpose of pulling out cash to buy a new house.

You do realize you can pull the principal(not any interest earned) from your roth IRA at anytime.....

Offline Emo EMAW

  • PCKK7DC Survivor
  • Pak'r Élitaire
  • *******
  • Posts: 17891
  • Unrepentant traditional emobro
    • View Profile
Re: New To Investing Thread
« Reply #16 on: April 16, 2013, 11:01:47 AM »
I contribute enough to my 401k to max out the employer match, and then I use the rest of my spare money purchasing stocks.

you are pissing away some good tax breaks broseph

Depends.  Probably a safe assumption tax rates when we retire will be higher.  Better to pay the income tax up front and not pay it later.  At least that's my way of looking at it.

it doesn't depend at all. he can either put it in a roth or contribute more than his employers match to his 401k until he hits his personal max. either way it's a tax break over buying stocks with after tax money and getting hit again when he sells them.

Well a Roth is an after tax contribution.  So no tax break there.  You might be thinking of a traditional IRA?

Agree on the 401k, although mine won't let me purchase anything other than the two dozen funds they offer (Prudential).

I'm not 100% certain you understand how a Roth works (I'm actually 100% certain you don't).

I'm saying your contributions are not tax deductible.  So you pay income tax.  However your disbursements are not taxed as income, nor are there capital gains/losses. 

Offline Emo EMAW

  • PCKK7DC Survivor
  • Pak'r Élitaire
  • *******
  • Posts: 17891
  • Unrepentant traditional emobro
    • View Profile
Re: New To Investing Thread
« Reply #17 on: April 16, 2013, 11:02:10 AM »
I contribute enough to my 401k to max out the employer match, and then I use the rest of my spare money purchasing stocks.

General trading account?  Wife and I been maxing the Roth IRA contribution the last few years and now we wish we would have been doing just a general trading account for the purpose of pulling out cash to buy a new house.

You do realize you can pull the principal(not any interest earned) from your roth IRA at anytime.....

No penalty?  Was not aware of that.

Offline The Tonya Harding of Twitter Users Creep

  • Pak'r Élitaire
  • ****
  • Posts: 9740
    • View Profile
Re: New To Investing Thread
« Reply #18 on: April 16, 2013, 11:02:50 AM »
I need to invest money in stocks. What's my best route here... Scottrade? I kinda just want someone to take my money and then just tell me when I'm a millionaire. I know nothing about stocks and don't really have the time to pay a whole lot of attention to them.

Just get a roth IRA, its very simple. I have mine through fidelity and it took about 10 minutes to set up. No minimum starting amount if you set up direct deposit every month.

If you want something where you just invest it and forget it just buy an index fund.

Link me, bro
I think what my friend Mitch is trying to say is that true love is blind.

Offline mocat

  • Pak'r Élitaire
  • ****
  • Posts: 39041
    • View Profile
Re: New To Investing Thread
« Reply #19 on: April 16, 2013, 11:02:53 AM »
I contribute enough to my 401k to max out the employer match, and then I use the rest of my spare money purchasing stocks.

you are pissing away some good tax breaks broseph

Depends.  Probably a safe assumption tax rates when we retire will be higher.  Better to pay the income tax up front and not pay it later.  At least that's my way of looking at it.

it doesn't depend at all. he can either put it in a roth or contribute more than his employers match to his 401k until he hits his personal max. either way it's a tax break over buying stocks with after tax money and getting hit again when he sells them.

Well a Roth is an after tax contribution.  So no tax break there.  You might be thinking of a traditional IRA?

Agree on the 401k, although mine won't let me purchase anything other than the two dozen funds they offer (Prudential).

I'm not 100% certain you understand how a Roth works (I'm actually 100% certain you don't).

This is the new to investing thread, steve. Take it easy and spell it out for people who are new to investing.

Offline ben ji

  • Senior Moderator
  • PCKK7DC Survivor
  • Pak'r Élitaire
  • *******
  • Posts: 11565
  • Alot of people dont hit on an 18
    • View Profile
Re: New To Investing Thread
« Reply #20 on: April 16, 2013, 11:03:01 AM »
I contribute enough to my 401k to max out the employer match, and then I use the rest of my spare money purchasing stocks.

General trading account?  Wife and I been maxing the Roth IRA contribution the last few years and now we wish we would have been doing just a general trading account for the purpose of pulling out cash to buy a new house.

You do realize you can pull the principal(not any interest earned) from your roth IRA at anytime.....

No penalty?  Was not aware of that.

No penalty, you already paid tax on it. You can pull out as much principal as you want at any time.


Offline EllRobersonisInnocent

  • PCKK7DC Survivor
  • Pak'r Élitaire
  • *******
  • Posts: 7690
    • View Profile
Re: New To Investing Thread
« Reply #21 on: April 16, 2013, 11:04:18 AM »
I need to invest money in stocks. What's my best route here... Scottrade? I kinda just want someone to take my money and then just tell me when I'm a millionaire. I know nothing about stocks and don't really have the time to pay a whole lot of attention to them.

Just get a roth IRA, its very simple. I have mine through fidelity and it took about 10 minutes to set up. No minimum starting amount if you set up direct deposit every month.

If you want something where you just invest it and forget it just buy an index fund.

Link me, bro

www.google.com

Offline mocat

  • Pak'r Élitaire
  • ****
  • Posts: 39041
    • View Profile
Re: New To Investing Thread
« Reply #22 on: April 16, 2013, 11:05:26 AM »
I need to invest money in stocks. What's my best route here... Scottrade? I kinda just want someone to take my money and then just tell me when I'm a millionaire. I know nothing about stocks and don't really have the time to pay a whole lot of attention to them.

Just get a roth IRA, its very simple. I have mine through fidelity and it took about 10 minutes to set up. No minimum starting amount if you set up direct deposit every month.


Link me, bro

tell me more

Offline ben ji

  • Senior Moderator
  • PCKK7DC Survivor
  • Pak'r Élitaire
  • *******
  • Posts: 11565
  • Alot of people dont hit on an 18
    • View Profile
Re: New To Investing Thread
« Reply #23 on: April 16, 2013, 11:05:36 AM »
I need to invest money in stocks. What's my best route here... Scottrade? I kinda just want someone to take my money and then just tell me when I'm a millionaire. I know nothing about stocks and don't really have the time to pay a whole lot of attention to them.

Just get a roth IRA, its very simple. I have mine through fidelity and it took about 10 minutes to set up. No minimum starting amount if you set up direct deposit every month.

If you want something where you just invest it and forget it just buy an index fund.

Link me, bro

https://www.fidelity.com/open-account/overview

I also have a general trading account seperate from my Roth IRA but it only has $500 in it and I just use it to screw around in.

Offline Dr Rick Daris

  • Global Moderator
  • Pak'r Élitaire
  • *****
  • Posts: 23382
    • View Profile
Re: New To Investing Thread
« Reply #24 on: April 16, 2013, 11:05:55 AM »
invest 10-15% of your salary every year and no more. if you have leftover money, do not invest it but instead immediately spend it on life experience types of things and not things like super nice cars and new couches.