How do you invest

rghill

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Start early. I wish I had taken advantage of opportunities when I was in my 20's. Max out Roth 401k first, then traditional 401k, especially if your company offers a match. I have gotten anywhere between 3 - 5% at any given time. One company paid in company stock match, which you should probably roll out to an IRA to keep from getting top heavy. My current employer offers a very nice match and the funds go directly to the contributions I have selected.

I have an IRA rollover account that I placed some pension payout money in. I have a few stocks but mostly index funds. I won't say which, because I wouldn't want anyone taking my advice, other than the first point.
 

moosie

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My advice: max out 401(k); don’t pay off house as interest rate is likely at an historic low; take extra cash and put it in vanguard index funds; if you want to buy individual stocks open a Schwab account and buy Apple; don’t day-trade.
Yep to all, except perhaps the AAPL rec.

If you want to day trade, just send it to me instead. Either way, the money's gone.

I agree with Warren Buffet when he said that unless you're a full time investor, the best method is to steadily put cash into a fund that tracks the main market indices. Vanguard index funds are the best, lowest cost option for doing that.

There is a TON of information and products available, and most of it targets people (like me) who need to learn that lesson the hard way.

It is *incredibly * difficult to consistently outperform the index (as a proxy for the overall market), even by two or three percentage points.

It may seem like a novice move to invest with index funds, like your grandma might do. But in fact, it's the smart approach. Patiently sitting on your hands is a big part of it, which is what makes the simplest strategy often the most difficult, especially for new investors (actually speculators) who want to "get into the game".
 

El Serio

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Yep to all, except perhaps the AAPL rec.

If you want to day trade, just send it to me instead. Either way, the money's gone.

I agree with Warren Buffet when he said that unless you're a full time investor, the best method is to steadily put cash into a fund that tracks the main market indices. Vanguard index funds are the best, lowest cost option for doing that.

There is a TON of information and products available, and most of it targets people (like me) who need to learn that lesson the hard way.

It is *incredibly * difficult to consistently outperform the index (as a proxy for the overall market), even by two or three percentage points.

It may seem like a novice move to invest with index funds, like your grandma might do. But in fact, it's the smart approach. Patiently sitting on your hands is a big part of it, which is what makes the simplest strategy often the most difficult, especially for new investors (actually speculators) who want to "get into the game".
A Random Walk Down Wall Street is a great book that explains why this is so.
 

tenthstreet

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I'm on the younger side (I'm 37), and am taking the Roth IRA approach as best I can. I also like to put some money away each month into savings, and for the last few years, with that rainy day fund built up, I've also started to invest a little bit each month into mutual funds as a growth strategy.

I use a service called Betterment for that—it's a robo-advisor, and rather than stock, it's investing in low-cost mutual funds for growth (ETFs from places like Vanguard and more). Nice, steady returns that way, rather than big and dramatic ups and downs. I've been happy with it for sure.
 

OmegaWoods

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Twelve years ago, I had a negative net worth having just lost my job and depleting all my savings on starting a business which I subsequently closed. I got another job with the company I currently work for. November 16, 2009. My 42nd birthday.

I figured out how much I could save in my 401k to max it out (17 or 18k at that time) and did that. Signed up for high deductible health plan and maxed out the HSA. Between those two, it was all I could do at the time. Roughly 20-25% of our gross income but it saved us taxes.

Soon, I found Mr. Money Mustache and started getting serious about things. Cut expenses, wife went back to work to slay our debts, sold a house at a loss to stem the bleeding. Shoveled money into the 401k, HSA and IRAs. Between the two of us, we were saving about 40% of our gross income.

Got a big pay raise in 2014. Borrowed from the 401k to consolidate the remainder of our debt. Continued to shovel money into all the areas above. Found YNAB and started living on a budget. Bought our lake property and fixed up one house to live in and the other to rent out. Moved out of our suburban house and rented it too. Wife's job ended and she didn't find another one that she like that was local but that was OK. By that time, we had eliminated all our non-mortgage debt and had three rental houses. By that time, we were saving about 50% of our gross income and the renters were covering the mortgage payments.

I could go on but I'll stop there. It's more than "what stocks or index funds should I invest in". It's so important to have a comprehensive picture of every aspect of your financial life. I use personalcapital.com to keep track of EVERY account and I know EXACTLY how much money is going in and coming out. You don't have to use a website but you do have to keep everything in front of you. I did it with Quicken for a few years and with a spreadsheet for a while.

As for investments, I have about 20% in cash, 40% in index funds (Total Market Fund (VTI or FZROX), 35% in Fidelity Growth Company Fund in 401k and about 5% in gold and 5% in Bitcoin and Ethereum.

Today, I'm 53 and will be retiring next December at 55. Without inheritance or windfall, we've managed to go from less than zero to, umm, well above average net worth in about twelve years by killing debt, living fairly lean and saving a significant portion of our income year in, year out. Sorry for the dissertation.
 

Preacher

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Buy Gamestop at $4 a share, overinflate the stock and make the hedge fund managers buy it back at sixty times your investment.

I did a little study with these type of trades and if you are savvy enough you can see the cycles where you can make some money. But it is a full time job and you best be ready to lose it all.

OR you can go to Vegas and follow Wesley's advice.

upload_2021-9-3_10-8-21.jpeg
 

Telekarster

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While the time is not right now, making quality investments in real estate has always been a good area to consider. My wife and I bought real estate over the years and it has paid well for us. Got in on the ground floor of some areas before they were "the place to be", and bought low in otherwise desireable areas by chance and careful planning etc. It takes a lot of work but, if you do it right, it can be a rewarding experience in a lot of ways.
 

glenlivet

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Figure out what exactly you are saving for. Then go from there.
Are you investing just to put your money to work? or is there a long term goal?
Time frame ?
Retirement ?
Just investing because you have some extra income ?
How long do you (realistically ) think you are going to live ?
Do you want to leave something to your kids etc...?
Are you planning on living in your current home forever ?
There are a lot of question that you need to look at before jumping in the pool.
 

bgmacaw

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FWIW I have a friend who did the day trading stuff and was heavily into it. He was always braggin' about how much money he was making in retirement. Then the crash happened and he lost everything. He and his wife were basically screwed for the next 5-6 years while they tried to rebuild their lives. It was not pretty and even to this day, they're not as good as they were before he started dabblin' in the day trading... remember, the stock market is an educated gamble at best.

To put it in the words of a pro stock trader I know, who's made millions and lost millions, and made millions again: "Ok man. So... you wanna be a trader huh? Ok. I require $20,000.00 of your money in cash. You will then stand there while I put that cash on my BBQ grill and burn it to ashes before your very eyes. If you can handle that, you "might" be ready for the trading game... maybe." And he was/is dead serious.

It's like playing blackjack...

 

Dismalhead

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I've got a Roth, it's split up into four things - cash, precious metal ETFs (gold, silver, copper), S&P 500 based mutual funds, and big ticket individual stocks (Apple, Microsoft, Amazon, Coca Cola).

Like someone above said, make sure your 401K contributions are maxed so you get any match from your company first. That's free money.
 
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beanluc

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I have seen a few threads where people comment they own stock in X or Y company.

I am at a point in my life where I feel financially safe, and have a little extra money at the end of the month. I am putting money in a 401k, although it is not maxed (and it was neglected for years). I am putting a little extra on my house each month.

How should I invest otherwise? I don't have enough to risk getting a rental property, and probably never will. I'm talking about a small amount of extra cash to invest each month. I'm curious about day trading software or similar products where I can put some money in the market. Do these things have minimum amounts to start or require monthly additions to principle? What are the options any of you have tried?
Don't let figuring out how stop you from going ahead and doing it. The sooner and the more you start saving, the longer and the more it will work for you.

Day trading is not investing, it's speculating. It's literally gambling. Don't do it.

Direct that steady monthly stream of funds into something consistent with your risk profile. If you don't know what your risk profile is, figure that out.
 

Dismalhead

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Buy Gamestop at $4 a share, overinflate the stock and make the hedge fund managers buy it back at sixty times your investment.

I did a little study with these type of trades and if you are savvy enough you can see the cycles where you can make some money. But it is a full time job and you best be ready to lose it all.

OR you can go to Vegas and follow Wesley's advice.

View attachment 895373

I'm still sitting on 3 stupid shares of Gamestop 'cause I don't want to take the loss.

I did jump on the AMC bandwagon and made about $1500 though.
 

Tyuk

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Definitely watching this thread as I’m 34 but want to prepare for the future because I’m recently married.

Seems like there’s some consistent trends/recommendations, like maxing out a 401k, but as I suspect the majority of perspectives are from the US, can anyone put these suggestions in a Canadian context?

I’m not sure which investment suggestions would translate directly across the border or what the equivalent is. For example, I think American 401k=Canadian RRSP but I could be way off as my experience with larger financial matters is quite limited. Most of my family lives overseas so they wouldn’t be much help either. :D
 

Old Plank

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This isn't investing per se, but in skimming thru here I don't think it's been mentioned to refinance your mortgage loan if you haven't, down to today's crazy low rates .... back when I was paying a 30 year home mortgage, I refinanced down in such a way that kept my monthly payments the same amount but knocked off 9 years of payments, so 108 months of out-of-pocket payments literally vaporized, which for me translated to ~$73,500 bucks saved ...and there was no charge for the refinancing!
 




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