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1. I was wondering about Social Security, is it possible for me to get some Social Secuirty from my former part-time job, it is because I remembered that I had social security deductions from some of my checks?
2. Well, I'm turning 19 this year and I'm going to talk to a financial advisor or consultant or whatever at Edward Jones so I can some investment advices, but I was wondering do you guys have your advice and/or experience regarding about investment that you would like to share with me?
depends how soon you need the money. if you dont need it for a while, you're going to be benefited most by starting an IRA with a bank or better yet with a mutual fund. otherwise still to high yield bank accounts that you can access easily. there's some online ones that are around 5%... read the fine print regarding # of transactions/withdrawals etc... if you had 10K... id say put some in an IRA, some in a non-ira mutual fund (no load) and keep what you need in bank acct. if you arent interested in the market, switch that amount to a CD... good luck! also start working and get into a 401k program asap, pretty much the only form of free money in our society
1. If you work and your company has a 401K plan put as much money as you can into it.
2. Open an IRA.
3. You can manage your investments without having to pay a financial advisor. Go to the library and read some good investment books.
4. Here is a web site you can visit and have any questions answered and alos learn a lot from the posts: Bogleheads :: Index
5. Go to the Morningstar web site Morningstar where they offer instructions on the basics of investing.
At the moment, I have at least at $500 that I can use for investing. I'm planning to get a job this summer, but I was wondering do I need have a job in order to have a ROTH IRA account? In addition, how can I determine what is a good ROTH IRA or not? Since, different institutions have different ROTH IRA options! Should I get "Investment for Dummies"?
1. I was wondering about Social Security, is it possible for me to get some Social Secuirty from my former part-time job, it is because I remembered that I had social security deductions from some of my checks?
2. Well, I'm turning 19 this year and I'm going to talk to a financial advisor or consultant or whatever at Edward Jones so I can some investment advices, but I was wondering do you guys have your advice and/or experience regarding about investment that you would like to share with me?
I have 1 problem with Edward Jones. They have very high fees. About 6 years ago I wanted to invest $3,000 and hoped to grow it for a down payment on a house as I knew the stock market was going to go up. They charged a hefty fee to purchace the stocks (which I didn't mind) and a fee to sell them (which I kinda didn't mind). But they also take 10% of all the profit I made, and that was outrageouse!!
If you want a financial advisor, I'd suggest Morgan Stanley. They have a much better fee structure and don't have "house stocks" to push down your throat.
I would recommend avoiding Edward Jones AND Morgan Stanley. They're both full-service brokers and will likely stick you into expensive load funds. If you need advice, see a FEE-ONLY adviser/planner.
You need earned income to have an IRA, my kids started theirs when they were 12, from income they got from their farm projects. You probably want a 'self directed' ROTH IRA, and put it with Vanguard or Fidelity. They both have low fees and plenty of No-Load diversified mutual funds to choose from. Avoid individual stocks until you have a decent nest egg, and then only a MAX of 5% of your TOTAL market investment in any ONE stock. The mutual funds own many companies and if one or two of those companies has a bad year it doesn't sink your boat. I use ETF's (Exchange Traded Funds) which are just like mutual funds, but trade 'real-time' like stocks. (Mutual funds only trade at "End-of-day" pricing). You won't be doing too much trading starting out. Choose some growth funds or ETF'S and add to them. (yahoo finance, fool.com, etfconnect all have good info... I DON"T recommend a full service broker like Edward D, Morgan Stanley, AG Edwards, Merrill Lynch... they will cost you too much for your level of need... you CAN do this yourself)
general rules
1) fund your employers 401k to the MAX if it has a company match (keep investments in growth funds)
2) fund your ROTH IRA to the MAX - more growth / international funds
3) then invest in your own stuff
4) Buy some real estate when possible and fairly priced (I prefer 'income' property like a duplex or commercial building with an apartment for yourself). The key to Real estate is to have places that pay their own way (as in renters who pay YOUR payments). Personal houses are not that great of an investment, as you have to sell them for a gain to make anything, and they have cost you taxes, insurance. and Maint all the time you held on to them. Income property lets you deduct all those expenses from your earnings.
The objective is to have investments in different things so when something goes down, the sky is not falling. And earnings will vary on time period and economy and location. Just be systematic about saving. Do it all the time, year-round, good times and especially bad times. (you get more for your money in down times). There is an old video "The Wealthy Barber" it is a good training tool, available at video stores or the library. ... oh, and read A LOT; and ask questions, but be very careful on implementing advice,
don't go for 'fads', it's probably too late
don't borrow money for depreciable items (stuff that looses value... cars, furniture, electronics...)
Save at least 10% of your GROSS income
make saving a "lifestyle"
BTW... I use Scottrade as a discount broker, as do my kids and spouse. I have several other accounts at other brokerages too, but Scottrade is pretty good and VERY cheap ($7 trades, good research, very fast executions). To start I would use Vanguard, as you may be required to carry a minimum balance at most places, and it is either $2000 or $5000, sometimes $10,000. I think IRA's get preference and lower minimums. Be careful that you don't have 'fees', maybe you will need a 'self directed ROTH IRA' at scott if Vanguard or Fidelity want fees for a $500 IRA.
What are the benefits that a mutual fund offer that a ROTH IRA doesn't offer? People on a different forum are telling me to start with a Vanguard Star Fund! P.S. Do I know what companies that I'm investing in with a mutual fund because I would like to invest in a company that doesn't go against my bias or beliefs?! FYI, I would to invest in company that is going to become energy efficient or all about renewable energy!
I'm planning to get a job this summer, but I was wondering do I need have a job in order to have a ROTH IRA account? In addition, how can I determine what is a good ROTH IRA or not? Since, different institutions have different ROTH IRA options!
Yes, you need a job to start an IRA. Since you don't have much money yet, why not start an IRA with a CD at your local bank, savings and loan or credit union? A CD won't get you that much interest in this day and age, but you won't lose any money either. Maintenance fees are minimal and your account is insured up $100K. This will give you time to educate yourself about mutual funds and later you can roll over your money from a savings and loan or credit union into a mutual fund (and Vanguard is a good one).
What are the benefits that a mutual fund offer that a ROTH IRA doesn't offer? People on a different forum are telling me to start with a Vanguard Star Fund!
You can stick a mutual fund INSIDE of your Roth IRA. A Roth isn't an investment in and of itself. It's just a vehicle for which to PLACE investments in order to gain favorable tax treatment. If you want the Star Fund, open a Roth and purchase the fund within the Roth. BTW, I like the Star Fund for investors who want to keep things as simple as possible. You get a LOT of diversification within one fund.
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P.S. Do I know what companies that I'm investing in with a mutual fund because I would like to invest in a company that doesn't go against my bias or beliefs?!
You can find the fund's holdings at the fund family's website. If you just want to see the top 10 holdings (or so), you can find those at virtually any financial site.
As for the job thing, you just need to have earned income for the year that you contribute to the Roth. If you contribute, say, $2000, you need to have earned at least $2000. You don't actually need to have a job at the time you're contributing though. You could open a Roth right now even if you're jobless, as long as you know that you'll have income before the year's over.
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