Investing 101

[sixGuns]

Money provides options and I don't want to be without them. I'm not old and I'm not young, but I have lost some of the most valuable commodity for investing. Time. Time in the market.

I'm looking to change that. The past few years have been a real eye-opener. I know that if you know how to make a guaranteed dollar the last thing you do is tell people because tomorrow it won't be guaranteed. Neverthless, I will ask... Where do (should) I start if I want to get serious about investing/learning and keeping more of my money? I am currently exploring Investopedia's Stock Market Game.

I will add this information if it is helpful in your recommendations:
I am very tech savvy. Not, "I know how to print a PDF." More, "I know computers have more RAM today, but why a double? An int will suffice."
I don't want recommendations of feelgood investment entertainment rich dad/poor dad type books/videos.

Thanks in advance!

 

[spencer rifle]

"The market giveth, the market taketh away."

You can't control the market. You can't control how your fund manager acts. You can control what you pay for their services. Never get funds with a sales load, and pay as little as possible for management fees.

Dollar cost averaging is your friend.

Other than that, do your research. "Present returns are no guarantee of future returns." "Experience is a light to the stern." And all that.

No one beats the market long-term. No one.

Just advice from an MBA holder and successful long-term investor. I don't do day trades (yet), only long-outlook steady building over the last 40 years.

ETA: Current investments - Alpha 2.8, Beta .8

 

[Nugget]

For novices, simple is usually best.

Step 1. Set up a high yield online savings account (i.e. Ally, Capital One, etc.) This is where you store your excess cash for investing and for your emergency fund. These online banks usually have nice CD rates as well, if you have enough extra cash sitting around.

Step 2. Pick a no fee broker (i.e TDA, Schwab, etrade, etc.), that lets you buy stocks and ETFs commission free, and set up a brokerage account. Pick out some low cost, broad-market or high dividend ETFs (SPY, IVV, DVY, etc), and buy shares as excess cash allows. Don't worry about timing the market, buying too early, etc. And definitely dont let your in-laws neighbors friends dog talk you into buying individual stocks.

As long as you invest for the long haul, keep putting money in regularly, and don't try to get too cute with exotic investments, you'll be fine. You may not strike it rich, but you'll be fine.

That's it. That's the list.

 

[sixGuns]

I realize it's akin to a casino and I am not looking to get rich quick. I am not trying to go bankrupt on derivatives or something similar either. I just realize there will be no safety nets, or what they are when it's my time will essentially be worth nothing. It's going to either be you have the funds or you do not and not having the funds means someone else makes decisions for you. The other day I saw a very old man pushing a mop bucket at Walmart. That scares me.

 

[ancjr]

Interactive Brokers offers just over 4% on un-invested cash.

 

[Mij]

As stated up thread.
Dollar cost avg. is your friend.
Nobody beats the market long term.
l’ll add diversification. And things with intrinsic value. JMHO.

 

[spencer rifle]

I realize it's akin to a casino and I am not looking to get rich quick. I am not trying to go bankrupt on derivatives or something similar either. I just realize there will be no safety nets, or what they are when it's my time will essentially be worth nothing. It's going to either be you have the funds or you do not and not having the funds means someone else makes decisions for you. The other day I saw a very old man pushing a mop bucket at Walmart. That scares me.

This is China. When we were in Hong Kong, old people were sweeping the beaches every morning. Really old people. Just sweeping washed-up seaweed off sand. So it looks nice for the tourists. While just down the beach slightly out of sight are piles of plastic junk. So much you can't see the sand. This is the retirement our government has in store for us.

All current plans depends on the value of money and a functioning government and a stable economic system. Right now, how likely do you think that is? I frequently wish I could just take out all my IRA/Roth/annuity money and buy lots of the three Bs. More so as this administration continues. There is no assured security in this life. That is an illusion. Preparing for the next is the ultimate investment.

 

[Destro]

Does your employer have a 401k type retirement savings plan?

 

[sixGuns]

This is China. When we were in Hong Kong, old people were sweeping the beaches every morning. Really old people. Just sweeping washed-up seaweed off sand. So it looks nice for the tourists. While just down the beach slightly out of sight are piles of plastic junk. So much you can't see the sand. This is the retirement our government has in store for us.

All current plans depends on the value of money and a functioning government and a stable economic system. Right now, how likely do you think that is? I frequently wish I could just take out all my IRA/Roth/annuity money and buy lots of the three Bs. More so as this administration continues. There is no assured security in this life. That is an illusion. Preparing for the next is the ultimate investment.

Oh, I don't disagree, which is why I'm putting feelers out. I guess I was a little shy on my intents. When I say serious, I mean serious. Not, "Oh, I watch this YouTuber or follow some blog." I'm feeling like going to the university book store and getting into the finance majors book catalog.

Without going into too much detail, outside of work, I don't have any demands on my time and I don't envision that changing. I don't care much for music/movies/TV/sports anymore. I mean, I have my likes and I understand we are social creatures and need some downtime, but just because its on TV doesn't mean we have to watch it. I feel like there is more crap out there than ever before... aka bread and circuses.

I want to be proactive so I make the decisions. I don't want to sweep the beech or push the mop bucket. I'm aware the best laid plans and God loves those who make plans type philosophy.

 

[sixGuns]

Does your employer have a 401k type retirement savings plan?

They do, and I'm there. I'm just looking to do more.

 

[spencer rifle]

My employer has deferred comp, which is greatly underperforming my own investments.

 

[sixGuns]

My employer has deferred comp, which is greatly underperforming my own investments.

My father retired a few years ago and had worked for many years for Tokheim in Ft Wayne. I'm guessing he had some form of non-qualifying deferred comp. I guess he never thought they'd go out of business. If I ever want to get him riled up I just mention them. Apparently, when they went under, he lost quite a sum of money.

I just did the 401k stuff because that's all I ever hear. I understand that's qualified and untouchable by creditors when the company goes belly-up, but I would much rather be able to achieve better returns than a 401k. I mean... why would you 401k when you can do better? I'm not criticizing a 401k. I guess it's a good set it and forget it thing, but that is not the path I want to walk.

 

[Destro]

They do, and I'm there. I'm just looking to do more.

The advice above for some index ETFs is solid. Im probably 50% individual stocks and 50% index ETFs in by brokerage account. My ETFs have done far better than my own stock picks. No reading 10Ks, no worrying about price to earnings...

If you for sure don't need the cash, right now could be a great time to get in. Reinvesting the dividends now could set you up well for the next bull run. Even if there is another 10% decline, your still in...getting those shares.

 

[Mij]

My employer has deferred comp, which is greatly underperforming my own investments.

Nailed it.

The state came to our office and gave a day long pep talk/ class re: our 457b equiv. to 401k. for non state employees. Trying to get us to invest more than minimum pretax dollars. I said no thanks. Gold was at ~350.00 oz.

Then I watched as my fellow employees saw there accounts loose over 60% of the value.

addition: spencer, in your post #7. I might add “teach your children well”. JMHO.

 

[sixGuns]

addition: spencer, in your post #7. I might add “teach your children well”. JMHO.

Talk of finance was always taboo, in my family anyways. We need to change this. It's why I'm doing what I'm doing. I'm glad people are chiming in.

 

[jd4320t]

Are you debt free?

Do you have an emergency fund?

 

[snapping turtle]

for the OP

Right now investment advise is something I would never give out.
I am not a CPA or investment guru. I do remember Jimmy carter administration and post JC when the economy seemed like it is now. Right now I would buy whatever you need to live and consume as soon as you can get your hands on it and I think that investment against inflation will pay higher return than investments will pay for the next 10 years.

now more for me and doing what INGO does float OP’s question to something else”

When I got my first real job (Regan administration) which allowed me to 401k with some employer match I talked to dad. He stated to attempt to get 7 precent per year which will compound and mix higher into riskier investments (since I was 19) and lower into safer investment and then over time switch more to safer investments and less in the risky.
“sounds good dad.nice talk let’s get to work”

now what do I tell my daughter who is 20. She bought a house (next door) and wants to save for the future.
“Pay off the house first then we shall talk about the future.”
”sounds good dad. nice talk let’s get to work”

Why did I tell her to pay off her house debt? ( I did not buy a house till my 30’s as when I was 20 interest rates were 13 precent) why did I not give the same advise which dad gave me? She is a small business owner. (Hair) and makes and much as I do because she has a very good work ethic. Easy. Inflation . Inflation in my spreadsheet (non scientific I know) is 13.9 precent so any money she invests should earn a 7 precent (maybe?) gain so her money is worth 6.9 percent less next year than when she had it this year.

“Dad my car neeed tires.” “No honey the roads have snow on them and tires spin in the snow but go ahead and buy 4 new ones but save the old ones in the trunk and we will stack them in the garage. “ Why because she can afford them and in 15-20k miles they will cost more than they do now. “

“Dad I have 6 months bills and house payments in the checking account and 50 precent of my earnings in a separate account for business taxes in another and 5 k extra what should I do with the 5k”
”Well honey keep the six months in the checking account. 5k in a second payment will take principal off the house and as far as the 50 precent in the business account let’s move half of that into gold and silver and keep the rest available to pay the tax man“

never before covid would I have told anyone to do so. i also said we would look at this again in 6 months and in six months after that. if the market crashes out she can cash out the gold and silver and March into a crashed economy stock wise and watch that recover in 20 years instead of loosing a big chuck early.
now in six months maybe she can go ahead and start putting max into a Roth IRA and then maybe a personal retirement account but right now I see “a bad moon on the rise“ and think she can do better against inflation with this method.

thank INGO for letting me write this all out.

 

[sixGuns]

Are you debt free?

Do you have an emergency fund?

I am not, I have about $8K between a car and a card. I rent (I know). I have not bought a house because I'm not sure about Indiana long-term and other areas of the country are seemingly more geared towards the tech industry. If I could WFH for the FAANG's I'll stay, but I don't see that as a reality. My goal is golden handcuffs in tech and outside of finance study I'm heavy in full-stack and am very interested in ML. I'm also brushing up on some math to try to test out of it for a potential return for my MS in CS. My emergency fund equates to about 3 months of expenses (I know).

 

[jd4320t]

I am not, I have about $8K between a car and a card. I rent (I know). I have not bought a house because I'm not sure about Indiana long-term and other areas of the country are seemingly more geared towards the tech industry. If I could WFH for the FAANG's I'll stay, but I don't see that as a reality. My goal is golden handcuffs in tech and outside of finance study I'm heavy in full-stack and am very interested in ML. I'm also brushing up on some math to try to test out of it for a potential return for my MS in CS. My emergency fund equates to about 3 months of expenses (I know).

Good job on the emergency fund. Nothing wrong with renting either.

I always give the advice to be cautious and plan for the worst. That’s why I like the Dave Ramsey approach. Get debt free, build emergency fund and so on.

 

[sixGuns]

I see “a bad moon on the rise“

I do too, and I remember reading the best time to buy is when there is blood in the streets.

However, thank you.

My basic philosophy is: Market returns and you make money or the world ends and it isn't worth **** anyways.

I'm hoping for the former and not the latter. I realize there is a middle ground and that also has a bearing in the former. I've just sat idle too long and nobody in my family ever talked of anything of this nature and I've been willfully ignorant on this for far too long. I have a career in tech and I've had too much fun, that is my fault. Yes there are layoffs in tech and it's all the rage now for clickbait. You know who is getting canned? HR and middle managers that don't know how to do anything but micro-manage people who don't need micro-managing. I've been preparing for over a year, its why my "situation" is where it's at. It was worse. Like I said, it's just me and I don't envision that changing. Have you seen the dating pool? Yikes.