Early investing

Discussion in 'Odds & Ends' started by yodudedudeyo, Feb 1, 2008.

  1. yodudedudeyo

    yodudedudeyo Guest

    I'm 18 right now and I've heard investing early is a good idea. Do any of you have any good book recommendations for investing that I could check out? Or any tips and tricks to get me started?

    When I say investing, it's very broad--Stock market, bonds, whatever.
     
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  2. Geezer Guy

    Geezer Guy Hall of Fame

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    Good for you, bud! If you start investing just $50 a week now and keep it up, you'll have a buttload of moolah by the time you're starting to wish you could retire. You don't have to do anything tricky or fancy. Just be consistent. It may hurt a bit when you're starting out, but keep in mind your final prize. I suggest you get some advice from an expert about the specifics.
     
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  3. little_e

    little_e Semi-Pro

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    Start young ,start early ,and go aggresive because you are young you can handle losing money knowing that you will make it back plus some when the market turns. The best market advice I have ever been given is that if the market is sliding stay on and buy all that you can.
     
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  4. circusmouse

    circusmouse Rookie

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    I only half-agree with Little_e. You can afford to invest aggressively when you're young, but you really have to know what you're doing before doing so. You should start with something safe that collects compound interest. A mutual fund maybe. Don't move into buying individual stocks until you learn a lot about trading.
     
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  5. Bodacious DVT

    Bodacious DVT Semi-Pro

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    Definitely. and diversify your mutual funds.

    Dave Ramsey is an expert on this issue, i recommend picking up his latest book. I recently attended one of his lectures and i was stunned. I'll post some of it soon
     
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  6. Joe Average

    Joe Average Rookie

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    Gosh. I wish I had books to recommend. I do know that the Motley Fool guys seem to have some kind of cult following. So you might want to look at them. Investing does take patience, and it isn't for the short haul. I forgot what the stat was ... like 11% or something. Equities have increased 11% every year since the Great Depression. Something like that. There are schemes ... trying to make short trades ... margins and stuff. I suggest you avoid them. Look for long-term returns. Even the safe Blue Chip stocks will pay pretty good dividends.

    I got into investing many years ago, right out of college. Savings accounts were paying very little (2%) and checking accounts were not paying anything. So I moved my money into a money market account by way of socially responsible investing (5%). Then I discovered mutual funds. Treasury bills back then paid pretty well (7%). And sometimes I'd do that. Then I discovered, with just a little bit of reading, I could do better than the mutual fund managers, so I picked my own stocks ... diversifying small and large companies, tech and non-tech, risky non-risky. A lot of my friends have never invested ... content with their retirement funds. That's kind of surprising to me.

    Anyway, patience. Ten, twenty years may sound like a long time for you, but in terms of investing and compounding, it really isn't.
     
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  7. little_e

    little_e Semi-Pro

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    Do you have your envelopes, your thousand dollars in savings, and have you applied for that pizza delivery job yet? I agree on the agressive thing I was just telling him to be as agressive as he can be.
     
    Last edited: Feb 1, 2008
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  8. Bodacious DVT

    Bodacious DVT Semi-Pro

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    Alright, the book is called

    The Total Money Makeover
    by Dave Ramsey

    its mostly about getting out of debt but theres some great information in there on early investing.


    1) deposit $1000 in an emergency fund (i.e. savings account) only use this in extreme emergencies.

    2) When it comes to investing, look more towards Growth Stock Mutual Funds. These are long-term investments and I would recommend you keep your money in them for years and years to come.

    when investing in mutual funds, it is important to diversify (that way, if one group suffers, you still have others to fall back on)

    I would recommend investing:
    25% in a Growth and Income funds
    25% in Growth funds
    25% in International funds and
    25% in Aggressive Growth funds.

    anywhere between 12-20% of your annual income is sufficient.
    Also, if you invest roughly $2000/yr from age 19-26, and keep that money in the market until you're 65, you will end up with more money than someone who invests $2000/yr from age 27-65.

    You've spent $16,000 and ended up with more than they did after they invested $78,000

    Dave Ramsey also strongly opposes credit cards, but i'll let you read his book to find out why.
     
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  9. Bodacious DVT

    Bodacious DVT Semi-Pro

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    lol, no envelopes or pizza, but im working on those:)
     
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  10. zapvor

    zapvor Legend

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    just dump it all in google ;)

    time is on your side. risk or not, do mutual funds and the market. the s&P and all the major exchanges have positive returns since forever, so. then when you get big, go hedge funds :p
     
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  11. saram

    saram Legend

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    Here is another tip that does not involve investing in any way.

    Let's say you are going to buy some items in the next year. If and when you see them on sale for anything over 15% off or more--buy now. You will never make 15% on your investments in one year guaranteed. But, if you instantly save 15% on an item, you have in a way earned that 15%.

    Dave Ramsey was mentioned above--he's top notch. Solid advice galore.

    Anything you invest into an IRA that comes out of your check is not taxed. So, if you are in the 25% tax bracket--you instantly save 25% on that money, plus the rewards of what unfolds later.
     
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  12. Chauvalito

    Chauvalito Hall of Fame

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    I was going suggest going to a credible source rather than asking the people of the board, but Dave Ramsey is a well known radio personality and give very good advice to the people who call him.

    Getting his book will give you a lot of good ideas, and if you follow what he says to the letter, I have no doubt that you will be able to retire by 50(if you star now) with plenty of money in the bank.
     
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  13. TonyB

    TonyB Hall of Fame

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    I'm going to give you the best advice that you've probably never heard before.

    Listen carefully...

    I'm serious...


    DO NOT WATCH CNBC!!!!!!!



    As I said, I'm serious. Do NOT listen to one single word of the crooks on CNBC. Larry "Free Market" Kudlow, the "Fast Money" crooks, Jim "Mad Money" Cramer, and the rest of them.

    Learn how to read a balance sheet. Go straight to the source of financial information and do RESEARCH on companies. Invest in GOOD companies, not hype. The hyped-up companies may indeed produce huge returns in short time periods, but they will always, ALWAYS come back down eventually. And that's when you buy. "Buy low, sell high" is no joke. Buy when the market panics and sell when it seems like the market will never go down.

    Case in point: look at the "Four Horsemen" last year (GOOG, RIMM, AAPL, BIDU) or other high-fliers (DRYS, SPWR, STP) and see what happened to them when the music stopped. Don't get me wrong, they're fine companies and should continue to do well, but if you listened to the CNBC crooks, they would have had you pouring money into the stocks at their peak and selling at the bottom during the selloff.

    In contrast, look at Warren Buffet's stock (BRK-A and BRK-B) and see how you REALLY make money, slowly.

    Good luck. And don't trust anyone else with your money.
     
    Last edited: Feb 2, 2008
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  14. Chace

    Chace Semi-Pro

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    I agree with TonyB. I would recommend reading up on Warren Buffet and his investment philosophy. If you do not have the time to do the research to buy individual stocks then I would strongly recommend putting your money in an Index fund (S&P 500).
     
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  15. cadfael_tex

    cadfael_tex Professional

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    What ever your do, think long term. Daytraders can effect the market but will never drive it. I cringe when I hear the commercials of making yourself rich by taking advantage of every turn in the market. There is just too much institutional knowledge that the average (even savy and well informed) investor isn't privy to that makes that virturally impossible and ill advised.
     
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