Investing Advice
First of all.....I'm not an expert investor. I'm a math guy, and I know that if you start putting away money
early in life, you will be a rich person.
A good link to see how much money you can have for retirement: Bankrate Investment Calculator
Watch my video about long term investing.....
Start investing for your retirement with your FIRST paycheck right out of college.
If you starting investing right out of college, you will most likely be a millionaire when you are 50 years old.
This is a great video one of my previous students, Meredith showed me about saving for retirement...
There are 2 ways to invest for the future.
1. You should maximize your ROTH IRA investment before any other investment.
Currently, you can contribute $5500 per year for 2020.
2. You should invest into your employer's 401K or 403B accounts
Currently, you can contribute $19,500 per year for 2020.
If your employer matches some of your 401K contributions, take advantage of this before a ROTH IRA.
Why would you turn down free money?
You may not be able to maximize your contributions during your first year....but put some money into it.
Have your employer automatically deduct the money right out of your paycheck.
Maybe start with $100 per week. (the more you save, the richer you will be!!!)
Every time you get a raise, add an extra $50 per week to save even more.
Where you SHOULDN'T invest: The bank (savings account / CD's)
They pay horrible interest....check out this website.... http://www.savingsaccounts.com/
Where you SHOULD invest: The stock market
I like Vanguard www.vanguard.com and Fidelity Investments www.fidelity.com.
They have numerous mutual funds in which to invest and they have low expenses and fees.
These are the mutual funds I have chosen (thanks to Bill A.) for my portfolio:
(you might want to try others....do lots of reading):
Remember.....there is always risk involved with investing....do your research!!!!!
Vanguard Funds: Energy Fund, International Growth Fund, Small Cap Value Index Fund, Total Stock Market Index Fund
This is my current allocation for my 403B:
Fidelity Funds: Total Market Index(40%), International Growth(20%), Low Priced Stock(15%),
Small Cap Growth(12%), Growth Company (10%), Emerging Markets(3%),
Click here for a chart that I have posted in my classroom
It shows the value of time when investing
The stock market goes up and down. Don't keep watching it every day or you will lose sleep.
Many people panic when the market goes down and they sell.
Many people rush to buy into the market when it is going up.
You want to be a steady investor. I actually like it when the market goes down because I know
that I'm buying future mutual funds at a cheaper rate.
Your other best investment is purchasing a home.
I know you have seen homes lose value. If you maintain your income and your mortgage payments,
you will have your home paid off in 30 or less years. The value of you home could be reduced to almost
nothing, but no matter what, you will still own it.
Unlike a stock, it could go to zero....look at General Motors...at one time the largest company in the world.
Do you need a checking/savings account that pays some decent interest?
If you clicked on the site above, you would realize that most don't pay much interest at all.
This is what I do.......
I have a Ford checking account https://www.ford.com/finance/investor-center/ford-interest-advantage-details
You have to keep a minimum of $1000 in there at all times.
It pays great interest and your money is always available.
I write checks ($250 minimum) and pay all my bills directly (no minimum amount)
I have my paycheck directly deposited into this account.
Always have a FREE local checking account where you can deposit checks and have an ATM card.
You can link accounts electronically to transfer money between them.
Credit Cards
BENEFITS of Credit Cards
Helps you build a good credit rating.
You don't need to bring large amounts of cash with you.
You can delay paying for a bill for at least 30 days.
You can earn cash back or airline miles
DANGERS of Credit Cards
Helps build BAD credit if you don't pay your credit card bills on time.
You can spend too much money that you don't have.
My Advice: If you don't have the money, then don't put it on a credit card. Save up for it first.
If you truly need to buy something or pay for a car repair or medical bill, then borrow
the money from a bank instead of using your credit card. The interest rates are much
lower from a bank than from a credit card.
It's important to save money, but it's also import to spend money.
You have to save for your retirement, but you also need to enjoy those years before retirement.
You need to have a good balance of saving and spending.
Last Note: If you are financially successful in life,
please remember to always give to charity.
There are many people in the world that need financial help.
Make a difference in the world!!!!