Question: How should I invest my money? Investment advice please!?
I'm currently 20 and a sophomore in college, but I believe it's never too early to start investing and saving for the future. I don't have extensive knowledge on the subject - hence me coming to yahoo answers - however I have a basic idea of what I might consider.
I have about $3500 that I want to invest and I'm thinking about three options:
1. A high yield online savings account with either ING or ally banking.
2. A Roth IRA with Vanguard or Fidelity.
3. An index fund with Vanguard or Fidelity.
My idea so far, is to invest in all three... about $1500 for online banking and $1000 towards the IRA and index fund.
So, Investment gurus of yahoo answers, what advice do you have for me, because I'm willing to listen to experience. I know the final decision is up to me, but I would love to hear what you would do in my situation.
What would you do and who would you do business with? ING or Ally and Vanguard or Fidelity?
Thanks a lot.
Answer:
Take it from an old guy who started investing in his 20's. Put it all in a low cost Vanguard IRA index fund and forget about it till you retire. Add a monthly amount if you wish.
You are young and starting now is very important, keep adding every month.
The Vanguard Total World Stock ETF is a fund with over 7400 stocks diversified in over 47 countries. It is simple and has a tiny expense ratio of only .22%. The symbol for this ETF is: VT
Traded inside a Vanguard account and there are zero commissions.
http://finance.yahoo.com/q/pr?s=VT+Profi…
My advise for what it's worth.as a 23 year investor in mutual funds.
At your yong age you should be open to more risky investments.
I would take all the money and invest it in a stock fund from either
Fidelity or Vanguard. If it is earned income use a Roth IRA along
with your investments. Investing in an index fund is okay also.
Note: At this point in time bank rates of all kinds are at a very low
point. They are not good for a young investor.
All three options you stated are worthless, the yields aren't even worth it.
Trade stocks, it isn't hard if you put the time and effort into it.
As a freshman in college i started trading, it was a little slow at first but then i began working on a plan.
I started with 2500 dollars and at the end of that year i was at around 4700.
Now at 23 I have over 100k
Stocks pay off
The most important thing to ask yourself first is when you plan to withdraw the money you are saving.
If the money is for retirement maybe 30 or 40 years from now, go with a ROTH IRA. Your money will be locked up until you retire, but you will get a bunch of tax benefits. If you might need the money in the next few years though - stay away from IRAs and stock funds.
If you decide to go with a ROTH, Vanguard is actually a really good choice because they have perhaps the lowest fees in the industry for mutual funds. Fidelity is a great company too though because they have a wide variety of investment options. I would personally get started with Vanguard, but look into something like Fidelity later on.
Believe it or not it might make the most sense to put all of your money into one company. The reason for this is that you will reduce your fees because you won't be paying 3 separate companies. Once you have a lot of money saved up you can spread things out, but right now you want to avoid any extra fees - even if its only $20 or $30. Remember that right now $35 is 1% of your total savings. Later on, $35 will be chump change.
I would start with a basic stock fund such as Vanguard's 500 Index Fund Investor Shares (VFINX). Here is a link for more information:
https://personal.vanguard.com/us/FundsSn…
As you can see the fees are very low - the expense ratio is only 0.17% per year. That's only about $6 per year in your case!!
Unfortunately the minimum investment is $3000 though (that's actually pretty normal for mutual funds). That means you will need to put almost all of your savings into this one fund just to get started. That's no biggie for now, but later on when you have more money you might want to mix it up a bit.
To get started give Vanguard a call.
Good luck!
Well, a high yield account will get you maybe 1% per annum when over the past 60 years, inflation has been about 4.5% per annum.
An IRA requires that you have W2 income from which you're investing in the IRA. If that's the case then budget your money for both your expenses and a small emergency fund and invest the remainder.
Without a W2 income, your choice is a brokerage fund in which you can invest in an index fund if you choose. However an index fund is 100% equity and a 100% equity portfolio can only benefit from a correlated market loss by your continued contributions. From what I gather, you're talking about a one time investment in which case it should be far more conservative an investment between 25% and 50% equity with the rest in bonds, that allows you to take advantage of market downturn by rebalancing. If you do or plan to make continued contributions to your investments in the future, you can consider the net present value of those contributions as if they were a bond in your calculation of your portfolio mix, for example today's total market value to gdp ratio would estimate a 5% per annum return on the stock market therefore a $466.66 per month investment over 40 years would amount to a present value of $466.66 * ( ( 1 - 1 / 1.05^40 ) / ( 1 - 1 / 1.05^( 1 / 12 ) ) - 1 ) = $98,205.88 so you could in fact invest more aggressively if you are contributing on an ongoing basis, but it's still best to not exceed 80% equity which is the maximum recommended by Ben Graham in his book "The Intelligent Investor" as you still need something to rebalance with when the market goes down.
If you qualify for the IRA, there's no point in an unsheltered brokerage fund over a sheltered brokerage IRA unless of course you plan on withdrawing before retirement which would be a mistake.
ING, Ally, Vanguard and Fidelity are all fine institutions with which to invest your money.
Skip the savings account, you're losing money with inflation and taxes. You need to make more than that to make a profit. Using Vanguard and Fidelity with their high fees will seriously hurt you. Buy an ETF in whatever you wish (low fees) and put it in your Roth IRA. You can trade them like a stock. Index Funds are guranteed to never make more than the market, not so good.
In the short term buy an ETF like SIVR or commodities, it's the only things that will be safe in this economy yet yield good returns.