Lux Investing
I make 65K a year. If im saving 15percent of my paycheck a year how can I invest to maximize investments?
Or what would be my best option to do with the 12% of 65K to invest my money into?
Public Comments
- I would suggest a thrift savings plan, those have amazing interest rates, or you could try a medium risk stock market if that is your forte, personally I like the tsp you earn much more back on your investment and its guaranteed to never go down!!
- you just save
- Does your employer have a 401K with matching? If they match 75cents to the dollar or better, use the max allowance for every paycheck.
- a question like this can not be answered without discussing the risks that will be assumed when you're trying to chase the best return. you need to build a lifetime financial plan. it is ok to change it every few years as you go along, and the plan will help you figure out how high is up and what you have to achieve in rates of return. then you can look at historical data to see if that is maybe possible or pie in the sky dreaming. GL
- "Maximize" is a very broad term that can have different meanings to different people. You need to give your age at least--makes a difference because of your time horizon. Also your tolerance for risk. Do you already have 3-6 month savings for emergencies? Be sure you diversify the types of investment, and don't put very much in your company stock. (In other words, don't put all your eggs in one basket.)
- take 10% and put in high yield savings account and never touch it by the time you retire you will be wealthy,really do the math! and gamble the other 2% on high yield riskey stock
- Standard investment advice is that you should invest in a diversified mix of stocks, bonds, and money market funds. You want to buy a diversified portfolio of stocks as individual stocks are too risky. Most folks have a dificult time buying a properly balanced portfolio of stocks on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Unless you know what you are doing, it is best to buy mutual funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low cost funds. If you are like most people you will invest part of your money aggressively in stock funds, and part conservatively in money market funds and bond funds. Vanguard has an on-line questionnaire which will give you an idea of how to do "Asset Allocation," determining how much to put in each type of fund. If your company offers a 401K plan at work, try to invest the most you can. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea. If you have children, you may want to consider a 529 plan or other college savings plan that grows tax free. I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, I would suggest putting ~70-80% of your money in the Vanguard Total Stock Market Index Fund. and ~20-30% in a foreign stock index fund. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion. Buying a house instead of renting will save you a lot of money in the long run. You don't have to pay rent and you build equity in your house instead. Buying rental property can also be a good investment. However, being a landlord can be hard work, and many people are not good at it. If you don't know how to handle deadbeat renters, you can have trouble. If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments. Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however. Sources: http://www.vanguard.com/VGApp/hnw/planningeducation http://www.fool.com/school.htm http://sec.gov/investor/pubs/assetallocation.htm http://www.diehards.org/readsites.htm http://finance.yahoo.com/education/begin_investing http://finance.yahoo.com/funds/basics Asset Allocation Calculators (Determining how much to put in stocks and how much into bonds and money markets is a personal decision depending on your financial status. These Asset Allocation questionaires give you a rough idea how to do this. I like Vanguard best, but try some of the other sites as well.) https://personal.vanguard.com/VGApp/hnw/FundsInvQuestionnaire?cbdInitTransUrl=https%3A//flagship.vanguard.com/VGApp/hnw/planningeducation/education https://ais2.tiaa-cref.org/cgi-bin/WebObjects.exe/DTAssetAlcEval http://www.ifa.com/SurveyNET/index.aspx Web forum: http://www.diehards.org/ (Many investment web forums are overrun by scam artists. This one seems the most legitimate site.) 529 plans: http://www.savingforcollege.com
- 1.) Contribute to your 401(k) up to the match 2.) Open a ROTH IRA and contribute the max annual amt - not sure but around 4k. 3.) If there is still money left save 3-6 months of bills in a savings account. 4.) Any remaining $$ can be invested in taxable stock, mutual fund, bond accounts. BLAM
