Investment/Retirement options for young folks

[REDMOND1858]

I know, I know.....don’t seek money advice from a public forum on the internet. Got it. My biggest question is...where does one go to seek such advice? I know there are some smart individuals on here who could point me in the right direction so here goes.

I’m 27. I wouldn’t think I make enough money to interest the experts around me enough to help me out. But I do make enough to save a little here and there. Some months nothing, some months maybe a few hundred bucks. Iv got a a small retirement set up through my full time employer that they match 3%. I recently set up an E-trade account to play around with, but I’m still trying to learn it a little more before I go to putting much into it. I’m also in the Ga firefighters pension so there’s a little cushion for me when I hit 55 years old. Being younger, I don’t mind taking the risk that some older people may shy away from.

So with all of that being said, where does someone in my situation seek advice? Where would be a good place to invest my 1-2-300 dollars a month that I may or
May not have. All the websites I find to try to research are more so trying to sell a product rather than educate me on smart options.

I believe a high school class on this would have been much more beneficial than that Spanish or algebra 2 class that I was required to take. But what do I know? Any help will be greatly appreciated, thank y’all in advance.

 

[Buck70]

financial adviser

Go see your local Edward Jones office.

 

[work2play2]

Your 401k/457 is pre retirement taxed. So if you up it 150 a check you may only lose 100 a check. That's your best bet if you want to save more and save on taxes.

 

[basstrkr]

X2 on Edward Jones

Also T, Rowe Price if you want to do it on line.

 

[JohnK]

" I recently set up an E-trade account to play around with"....trading is a game where there is a winner and a loser every time. Betting on beating a bunch of professionals with super computers isn't a smart play. They money they "play with" belonged to someone else not long ago. Dollar cost averaging into a balanced fund or one of the lifetime funds isn't a bad idea over time.

 

[atlashunter]

At 27 you may not want to hear this but slow and steady wins the race in investing. Most important thing is to develop a habit of consistent savings. It’s ok to start small but important to set aside something every single paycheck. If you can’t pay yourself first and still make ends meet then find a way to increase your income and/or cut your expenses but first and foremost develop the habit of saving something every single paycheck. You’ll be 40 before you know it and either wishing you had developed that habit or glad you did. Secondly don’t take huge risks. Trying to hit home runs will result in a lot of strike outs. Take the singles and doubles and be patient. Very few professional investors can outperform the market. Odds are neither can you. Go with diversified funds with low expense ratios from a company like Vanguard or Fidelity. Be consistent and patient and you’ll be surprised how it adds up as the years pass.

 

[atlashunter]

One more tip that has helped me save more is start tracking your net worth with an app like mint. It will fluctuate month to month but if you are managing your finances right you should see it growing over time. It’s nice to hit milestones and motivating to keep it moving up as you increase your savings and investments.

 

[Milkman]

I know, I know.....don’t seek money advice from a public forum on the internet. Got it. My biggest question is...where does one go to seek such advice? I know there are some smart individuals on here who could point me in the right direction so here goes.

I’m 27. I wouldn’t think I make enough money to interest the experts around me enough to help me out. But I do make enough to save a little here and there. Some months nothing, some months maybe a few hundred bucks. Iv got a a small retirement set up through my full time employer that they match 3%. I recently set up an E-trade account to play around with, but I’m still trying to learn it a little more before I go to putting much into it. I’m also in the Ga firefighters pension so there’s a little cushion for me when I hit 55 years old. Being younger, I don’t mind taking the risk that some older people may shy away from.

So with all of that being said, where does someone in my situation seek advice? Where would be a good place to invest my 1-2-300 dollars a month that I may or
May not have. All the websites I find to try to research are more so trying to sell a product rather than educate me on smart options.

I believe a high school class on this would have been much more beneficial than that Spanish or algebra 2 class that I was required to take. But what do I know? Any help will be greatly appreciated, thank y’all in advance.

I see you are a fire fighter. Do you work for a county government on your full time job?

 

[Artfuldodger]

Your 401k/457 is pre retirement taxed. So if you up it 150 a check you may only lose 100 a check. That's your best bet if you want to save more and save on taxes.

I think I'm following you. Are you suggesting that if he puts the extra money in his 401k that he could avoid the taxes that he would pay by investing in a mutual fund or whatever?

 

[Artfuldodger]

My problem in hindsight was borrowing too much money. I was taught by my Dad that if you wanted something, you just borrowed the money to get it.
This lead to less capital to invest with. I should have listened to Dave Ramsey. My Dad seemed to be able to borrow money and have money to invest.

Point being though look for as many ways to save on spending money so that you will have more to invest.
I did the matching thing at work and it builds up pretty fast. My investment wasn't matched by the employer either.
Maybe diverse with some in risky funds and some in risky but less risky?

 

[hayseed_theology]

Take a look at a Roth IRA through Vanguard.

 

[bassboy1]

This would be a good place to do some reading.

https://www.bogleheads.org/wiki/Main_Page


https://www.bogleheads.org/wiki/Prioritizing_investments

Don't ignore tax advantaged space (Roth, 401k, HSA, etc). Putting money in taxable accounts comes after fully utilizing tax advantaged space.

Also, I'd pretend your pension doesn't exist, for the sake of figuring. Pensions are starting to become a hot topic, and I wouldn't want to count on what the next 40-50 years will do to them. Pretend it's not a thing, and if it still is when you get there, that's all the better.

 

[RGRJN]

What they said above. One website that helped me alot when I started was the Motley Fool. It was free then, not sure about now.
I'm not saying don't go with someone like Edward Jones, but always look at "name the company" cut/fees. They can kill you when first starting out. Your going to pay for their advice. There are a ton of low load mutual funds out there for a Roth IRA.

 

[steeleagle]

Try the free version of personalcapital.com

 

[Elkbane]

I started saving when I was about your age and stumbled around a little, then decided this was a serious enough issue (saving for retirement) that I needed to get serious about learning how to do it right, relying on my own advice, not on somebody who makes a commission trying to get me to buy something. Think about this - if you work at a job for a living, then this is your "second job", and it may be more important than your day job. My advice is to become an active learner and invest the time to learn about investing the proceeds of your hard work.

First off, you need to know the difference between tax-advantaged accounts funded with pre-tax money (401k's, contributory IRA's, etc) and accounts funded with after-tax money (Roth IRA's and brokerage accounts).

Tax-advantaged accounts: IRA's and 401k's are funded with pre-tax money, accumulate earnings, and are taxed when you withdraw the money as ordinary income. There are penalties for early withdrawal. 401k's typically have a vesting requirement - i.e. your employer match contribution is not really "yours" until you are fully vested, typically 5 or 10 years. If you leave your employer, you can "roll over" your 401k balance into a self-directed roll-over IRA where you make the investment choices, rather than just having the choices available through your employers plan. In this day and time, where hardly anyone works their whole career for one company, roll=over IRA's are a handy thing to have available - they provide transport-ability to your retirement savings. For these accounts, you generally can't withdraw without penalty until age 59.5, and you have to start taking required minimum distributions at age 70.5.

After-tax accounts: Brokerage accounts and Roth IRA's are funded with after-tax money (money you have in your pocket that you've already paid tax on). Depending on your circumstances, you may be eligible to contribute annually to a Roth IRA - in which your earnings compound tax-free. In a brokerage account, you are only taxed on your earnings, not on the amount you put into it. Dividends and capital gains (when you sell an appreciated stock) are usually taxed at lower rates than you ordinary income tax rate.

For myself, since I make my own investment choices and don't want salesmen calling me with stock picks, I use Charles Schwab to house all of my accounts. That way, once I log on to their system, I can see account balances across all accounts and allocation of investments across all accounts in one handy user-friendly platform. They also have an investor checking feature (FDIC insured) that makes it easy for wire transfers and such, and my wife uses their "bill pay" feature to handle household finances.

My point is that it is worth the effort to learn how to do this yourself - it may be the most important thing you ever learn how to do,and skipping the fees from fee-based brokerage firms can significantly increase your retirement results.

https://thecollegeinvestor.com/11071/5-ways-to-learn-about-investing-in-the-stock-market/



Elkbane

 

[BeerThirty]

I'm going to guess that if you have an employer-sponsored 401k then you have the ability to log-in online and manage your account. With that, you should be able to setup a Roth 401k where you can contribute money at your discretion. Simply pick a "target date" fund (based on your targeted retirement date) and call it done. These fund are diversified and take the guess work out of trying to micro manage individual stocks/investments as they balance risk and growth goals based on your target date. Don't get no easier than that.

 

[tree cutter 08]

Don't want to take over but what would y'all recommend to one that doesn't really trust what they can't see or touch? It's hard for me to want to put much into something that may go poof when the wind blows like back in the depression days. I put some into a ira but it's not making much. i want to start putting around a thousand a month into something for down the road. Thought about land but what ya think? Would paying property taxes for 30 years be more than the gain in land value?

 

[atlashunter]

Don't want to take over but what would y'all recommend to one that doesn't really trust what they can't see or touch? It's hard for me to want to put much into something that may go poof when the wind blows like back in the depression days. I put some into a ira but it's not making much. i want to start putting around a thousand a month into something for down the road. Thought about land but what ya think? Would paying property taxes for 30 years be more than the gain in land value?

Stocks have a pretty good track record over the long term. Individual companies come and go but some are pretty safe bets. Do you really think you’ll see a day in your lifetime that Coca Cola or Clorox no longer exists? Or one in which we no longer have corporations producing goods and services for people? If it comes to that money is going to be the least of your concerns. That said, if you want to avoid stocks and bonds the next best thing that is a tangible asset would be real estate. Wouldn’t do raw land unless it is earning you some sort of yield either from rents or growing something long term. Timber maybe? You’ve also got rentals but there is risk with that too. Another option might be a place you do short term rentals with something like Airbnb. More intensive management but better return potential too. Nothing wrong with investing in bricks. If the market goes bust at least you still have your rental property. Just keep in mind doing only real estate means you’re not spreading your risk across different asset classes which most investment advisers recommend to be diversified.

 

[Pat Tria]

Read the book by Wes Moss, "You Can Retire Sooner Than You Think"
Wes is the chief financial adviser for Capital Investments and he is the host of Money Matters on WSB radio aired each Sunday morning.
Very sound financial advice.

 

[brownhounds]

Invest in land.....it will be a dinosaur one day. Or, you may need it for survival one day, too.