Newbie in financial investments. (Full Version)

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linarette -> Newbie in financial investments. (4/11/2008 11:05:53 AM)

Hi everyone,

Please I would like to know how to get started with wise investment. I really do not know much about mutual funds, stocks and the like. I am 24, still in school, and I have approximately $2000. I would like to keep $1000 in a savings account and invest $1000. I have a regular stipend from the school and my annual income is $22,000.

So, what should I do? how do I get started? Do you know any website I should check out?
I have looked around the web, and found a few websites that cater to beginners. More tips would be appreciated.


Thanks.[:)]

PS: I do not have the option of asking my parents for financial advice. I am an international student.



Ps103 -> RE: Newbie in financial investments. (4/11/2008 11:23:04 AM)

You might try an index fund.

HERE is a site that has good info and some funds that might interest you, but there are plenty of others to choose from.



john_is_free -> RE: Newbie in financial investments. (4/11/2008 11:24:12 AM)

You really have not provided enough information...
Long term financial goals
Short term finaccial goals
Married or planning to be?
Kids or planning?
Living expenses?
How much longer in school?

But the basics:
3-6 monthes living expenses in conservative, fairly accessable (but not to accessable) account
No debt - does not make sense to get 7-10% return on investment when you pay 12-18% on debt
Retirement savings (often tax free or tax deferred) even a small amount saved now will reap enormous benefits 50 years from now.
Goal saving- again conservative, set aside for short/long term goals.



peace77 -> RE: Newbie in financial investments. (4/11/2008 11:46:24 AM)

You do not have enough to risk funds in the stock market.
Further, you may need money for unexpected expenses.

Therefore, I suggest that you place your funds in a money market account. It will be insured and not subject to the short term ups and downs of the stock market. A money market account will have better interest rates than a savings account.

You can find the best rates at http://www.Bankrate.com

Will you be staying in the U.S. or returning to your home country?

I agree with John (previous post). If you have debt, pay it off.

Have at least 3 months worth of expenses before you consider risking any of it in the stock market.
(The only exception is if your employer offers a retirement plan such as a 401(k).)


Peace,
Anne



linarette -> RE: Newbie in financial investments. (4/12/2008 11:46:48 AM)

Thanks for replying.

You are right! It would be wiser to place the money in an emergency fund. It is not even up to 3 times my monthly income, so I need to save up more.
I will be done with school in about a year and while jobs in my field are not scarce, the transition from scholarship to a regular-paying-job could be financially rocky. I will almost certainly have to move to a different state for a job.

I agree, i'll keep the money as an emergency fund.


Thanks very much!
God Bless[:)]



LCannon -> RE: Newbie in financial investments. (4/12/2008 12:15:33 PM)

Loose Cannon's Guide to Investing
1. Invest what you can afford to lose. Remember the initial talents? They were the master's.
2. Research and invest and follow. Never invest purely on another's word or hunch.
3. When you decide to sell(or pick up an option), take your gain and run! Never look back.
4. When you take a loss, it's only money. Refer back No. 1.

My "Emergency Fund Savings" is my mutual funds held in my broker's(Edward D. Jones firm)name. That accomplishes two things(at least), it grows(hopefully<teehee>)over time(I contribute monthly plus it grows over time) and I can withdraw cash from it after seven day settlement. I also have access to a small amount of($3-5000)cash via my Money Market account for immediate cash. I use my MM as my liquid account, write checks and use my debit/credit card(always paying it off monthly!)for ready cash.



Miss Giggles -> RE: Newbie in financial investments. (4/12/2008 12:28:31 PM)

Since you don't have a lot I'd put in online savings account like INGDirect where you'll get a decent interest rate and you can transfer the money back if you need it.

Also you could start an ira for retirement since the sooner you start saving the better off you'll be.



bensulli -> RE: Newbie in financial investments. (4/18/2008 3:40:47 AM)

I agree, INGDirect is an amazing bank. You'll get great interest rates on your savings, you can access it whenever you want, and there are no fees!

There are a lot of different kinds of investments, and there aren't many that I would suggest without you seeing a financial advisor first. Believe me, I think I know where you're at, you start making money and you really want to invest it and make use of it. I hate keeping money in a bank account because it feels like it's not doing anything for me (At least ING has good interest rates). Unfortunately finances are all about patience and careful planning.

Additionally, there are some forms of life insurance that double as retirement savings. Here in Canada you can pay monthly into a life insurance policy that pays back out when you retire. Best part is that you don't pay taxes on it because it's an "investment", and under certain circumstances you won't pay taxes when you collect it after retirement either. Again, best to talk to a financial advisor.



peace77 -> RE: Newbie in financial investments. (4/19/2008 1:35:22 PM)

It's alwfays best to compare.

There are at least 8 other banks that are offering better interest rates than ING.

See LINK for today's comparison.



Deleted User -> [Deleted] (4/20/2008 12:18:01 AM)

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Psalm22 -> RE: Newbie in financial investments. (4/21/2008 5:06:44 PM)

Check out www.soundmindinvesting.com for basic investing information. Austin Pryor's take it from the very beginning and helps step you through the vocabulary and a long-term investing strategy.



Deleted User -> [Deleted] (4/21/2008 5:10:52 PM)

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Psalm22 -> RE: Newbie in financial investments. (4/21/2008 5:24:28 PM)

You're welcome!



Deleted User -> [Deleted] (4/21/2008 6:53:07 PM)

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peace77 -> RE: Newbie in financial investments. (4/22/2008 7:34:37 PM)

Go to the library.

The book, Sound Mind Investing should be available. If not, you can order through inter-library loan.
If you don't want to wait, you can order it from http://www.Amazon.com
Used copies are available for as little as 55 cents plus shipping.

The library should have other investing or financial books by other Christian authors such as Larry Burkett, or Ron Blue.


Peace,
Anne



NoShow -> RE: Newbie in financial investments. (4/23/2008 11:22:11 AM)

quote:

ORIGINAL: Tall_One

Ok I have a question for all the experts in this forum. My Uncle used to play the stock market with penny stock. He would buy stocks at a penny a share and then sit back and wait to see if they would grow over long periods of times. Sometimes he would hit it big and they would grow to 1000's of dollars and then sometimes he would lose by a negative amount depending on the market and the business he had chosen to invest his penny stock in.


Actually, he probably rarely got stocks at a penny a share. Anything under $5 a share is considered a penny stock. Penny stocks are typically the riskiest of stock. Understand the true meaning of risk, the likelihood of loss. The presence of increased risk does not insure increased reward, increased reward is usually required to encourage one to take increased risk.

quote:

Here's my question ... I have thought of doing this for fun myself. I would ask him but he died a few years back. Does anyone know how I could start into this? How much initial investment I need and would I need to find myself an online broker? If I use a broker, how much does the broker get paid for helping me with my penny hobby? How much would it cost me over the long haul to do this other than my penny investments?


I think it would be "foolish" to pursue penny stocks, just for the sake of their "penniness". You would be much better off, investing in undervalued quality stocks. If you can't, with all of the information that is available, identify a quality stock (company) that is currently undervalued; than it's unrealistic to think that you can identify a good penny stock investment with it's limited information.

As for using a penny stocker broker, they're known for churning-and-burning accounts. On top of that, they usually have a minimum requirement, to buy into a penny stock offering, that will run you $1,000-$5,000 per stock. You won't fact that buying "regular" stocks. You can open an online account and pay $10-$20 a transaction (on top of the price of the stock), but you don't get the assistance of a broker. I've known probably a dozen full-service brokers over the years and in all honesty, only one of them was more than a salesperson\order-taker.

Read The Intelligent Investor (Benjamin Graham) to understand technical analysis and read One Up on Wall Street (Peter Lynch) for fundamental analysis. If you don't want to put in the time and effort, than you'll be way better off buying an Index fund, than giving your money to a broker to put into penny stocks.



Deleted User -> [Deleted] (4/23/2008 11:44:08 AM)

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NoShow -> RE: Newbie in financial investments. (4/23/2008 12:26:14 PM)

quote:

ORIGINAL: Tall_One

I remember he got my Aunt to invest in Enron after the company went bust. She told me a year or so back that the stock had grown from a negative amount to 200+ a share.


I may be misinformed, but this doesn't agree with anything I've read\heard. Enron filed for bankruptcy, then later emerged as Enron Creditors Recovery Corporation (which it is today). ECRC is still trying to get money to settle with Enron's long list of creditors. My understanding is that, to date, the shareholders are still to see a dime.

That and the fact that a stock can't be a "negative amount", confuses me on your aunt's comment.



Deleted User -> [Deleted] (4/23/2008 1:08:56 PM)

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peace77 -> RE: Newbie in financial investments. (4/23/2008 3:13:06 PM)

If you want to invest in small amounts, you could invest in a mutual fund for as little as $25 per month.

Or, you can invest in DRIP's directly with a company. The dividends are reinvested into more stock shares.
For more information Click HERE


Anne



Deleted User -> [Deleted] (4/23/2008 6:47:13 PM)

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Psalm22 -> RE: Newbie in financial investments. (4/24/2008 5:25:20 PM)

quote:

ORIGINAL: Tall_One

quote:

ORIGINAL: Psalm22

You're welcome!


One problem, the site you gave me states I have to pay for their information. There wouldn't be a free site I could learn information from prior to investing is there? I feel it is best I take the cheap approach first.

Thanks.


The last time I looked, there was quite a bit of free info as well as a subscription side to the web site. I'll go look and check up on my memory.



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