Need Help Investing

Hey guys. So random thread, but I have now graduated and been working for almost a year now. After expenses and crap I have saved a decent amount of dough.

Problem is that I dont know much about investing. I feel like an old granny just leaving it there in the bank. Any tips, suggestions, etc. just about where to start in terms of research?


We call out noobs all the time on this forum, but I am beyond noob when it comes to this field.

Just spend it, didn't you hear the worlds gonna end in 2012?

My area of expertise. I can help.

This is kind of a fun time for you, I remember thinking that way when I had just gotten a job. Being a finance major I knew how powerful saving and wise investing could be in the long haul. I enjoyed laying out my plan and executing it.

Here's the master plan:

Priority 1: If your employer offers a retirement program where they match your investments, contribute just enough to get the full match out of your employer. But don't yet contribute more until you work your way through the other priorities below. At your age, you should be 100% stocks. Choose mutual funds, or a mix of funds, that expose you to both international stocks and US stocks, small stocks and large stocks. PM me if you want details on selecting mutual funds.

Priority 2: Build a "nest egg" for emergency funding purposes. Everyone should have 6 months worth of basic living expenses saved. In case you get laid off or have some other sort of financial disaster, you save yourself a lot of money in the long run by using savings to cover those things, rather than going into debt to finance them. So tally up your basic living expenses (don't count video game money, going out money, etc. Just rent + utilities + food + car etc.) and figure out what you need socked away for "just in case." Store it in a money market fund (Vanguard) or a high interest savings account (ING) - you want this money to be very safe, after all it is for emergency purposes.

Priority 3: Reduce high-interest debt. Once you have your nest egg built up, start using excess income to pay down credit cards and any other high-interest loans. If you have student loan debt or a mortgage, just make the minimum payments. That stuff is tax deductible, let that float. Instead pay down the credit cards or other loans till they're gone.

Priority 4: Save for a home. Real estate is one of the best investments you can make in the long term, even if you're just buying a condo. The savings on taxes and the long-term buildup of home equity make it WAY better than renting. As you work towards piling your savings, I'd suggest socking it away in the same account as your "nest egg" fund. If you want to add a little more earning power, consider some lower risk bond funds.

Priority 5: Once the above are done and you're a home owner, it's time to get serious about retirement. While still taking advantage of the full match at your employer (if you have one), contribute to a Roth IRA if you qualify. The long-term tax advantage is most favorable. Open the Roth IRA with Fidelity or Vanguard, and select a mix of mutual funds (domestic & international, large & small). Go 100% stock and prepare to ride the roller-coaster. Combining your 401K and Roth IRA contributions, target a total annual contribution of 10% of your salary.

Priority 6: Once all of the above are going swimmingly, do something bad ass for yourself. Get that BMW. Move to a cooler house, whatever. You've earned it by now.

I'm happy to get into details if you wish. Good luck!

My closest friend is a financial advisor. He works for a small asset management company in Gaithersburg (about $50M in managed assets). Their firm actually got audited recently because they did so well despite the recession. I'd be happy to PM you his info if you're interested.

And listen to schneed. Great advice, very similar to what my buddy has been telling me.

you're the UVA guy, shouldn't you be telling us? :silly:

Solid advice from Schneed, not sure there's much more to add.

My area of expertise. I can help.

This is kind of a fun time for you, I remember thinking that way when I had just gotten a job. Being a finance major I knew how powerful saving and wise investing could be in the long haul. I enjoyed laying out my plan and executing it.

Here's the master plan:

Priority 1: If your employer offers a retirement program where they match your investments, contribute just enough to get the full match out of your employer. But don't yet contribute more until you work your way through the other priorities below. At your age, you should be 100% stocks. Choose mutual funds, or a mix of funds, that expose you to both international stocks and US stocks, small stocks and large stocks. PM me if you want details on selecting mutual funds.

Priority 2: Build a "nest egg" for emergency funding purposes. Everyone should have 6 months worth of basic living expenses saved. In case you get laid off or have some other sort of financial disaster, you save yourself a lot of money in the long run by using savings to cover those things, rather than going into debt to finance them. So tally up your basic living expenses (don't count video game money, going out money, etc. Just rent + utilities + food + car etc.) and figure out what you need socked away for "just in case." Store it in a money market fund (Vanguard) or a high interest savings account (ING) - you want this money to be very safe, after all it is for emergency purposes.

Priority 3: Reduce high-interest debt. Once you have your nest egg built up, start using excess income to pay down credit cards and any other high-interest loans. If you have student loan debt or a mortgage, just make the minimum payments. That stuff is tax deductible, let that float. Instead pay down the credit cards or other loans till they're gone.

Priority 4: Save for a home. Real estate is one of the best investments you can make in the long term, even if you're just buying a condo. The savings on taxes and the long-term buildup of home equity make it WAY better than renting. As you work towards piling your savings, I'd suggest socking it away in the same account as your "nest egg" fund. If you want to add a little more earning power, consider some lower risk bond funds.

Priority 5: Once the above are done and you're a home owner, it's time to get serious about retirement. While still taking advantage of the full match at your employer (if you have one), contribute to a Roth IRA if you qualify. The long-term tax advantage is most favorable. Open the Roth IRA with Fidelity or Vanguard, and select a mix of mutual funds (domestic & international, large & small). Go 100% stock and prepare to ride the roller-coaster. Combining your 401K and Roth IRA contributions, target a total annual contribution of 10% of your salary.

Priority 6: Once all of the above are going swimmingly, do something bad ass for yourself. Get that BMW. Move to a cooler house, whatever. You've earned it by now.

I'm happy to get into details if you wish. Good luck!
Boo your unsexy advice! Can't he just sink it all into gold and dance his way to the bank? I am sure I saw a guy on TV talking about that late one night. Forget Schneeds measured and long term approach. Go for the big play.

My area of expertise. I can help.

This is kind of a fun time for you, I remember thinking that way when I had just gotten a job. Being a finance major I knew how powerful saving and wise investing could be in the long haul. I enjoyed laying out my plan and executing it.

Here's the master plan:

Priority 1: If your employer offers a retirement program where they match your investments, contribute just enough to get the full match out of your employer. But don't yet contribute more until you work your way through the other priorities below. At your age, you should be 100% stocks. Choose mutual funds, or a mix of funds, that expose you to both international stocks and US stocks, small stocks and large stocks. PM me if you want details on selecting mutual funds.

Priority 2: Build a "nest egg" for emergency funding purposes. Everyone should have 6 months worth of basic living expenses saved. In case you get laid off or have some other sort of financial disaster, you save yourself a lot of money in the long run by using savings to cover those things, rather than going into debt to finance them. So tally up your basic living expenses (don't count video game money, going out money, etc. Just rent + utilities + food + car etc.) and figure out what you need socked away for "just in case." Store it in a money market fund (Vanguard) or a high interest savings account (ING) - you want this money to be very safe, after all it is for emergency purposes.

Priority 3: Reduce high-interest debt. Once you have your nest egg built up, start using excess income to pay down credit cards and any other high-interest loans. If you have student loan debt or a mortgage, just make the minimum payments. That stuff is tax deductible, let that float. Instead pay down the credit cards or other loans till they're gone.

Priority 4: Save for a home. Real estate is one of the best investments you can make in the long term, even if you're just buying a condo. The savings on taxes and the long-term buildup of home equity make it WAY better than renting. As you work towards piling your savings, I'd suggest socking it away in the same account as your "nest egg" fund. If you want to add a little more earning power, consider some lower risk bond funds.

Priority 5: Once the above are done and you're a home owner, it's time to get serious about retirement. While still taking advantage of the full match at your employer (if you have one), contribute to a Roth IRA if you qualify. The long-term tax advantage is most favorable. Open the Roth IRA with Fidelity or Vanguard, and select a mix of mutual funds (domestic & international, large & small). Go 100% stock and prepare to ride the roller-coaster. Combining your 401K and Roth IRA contributions, target a total annual contribution of 10% of your salary.

Priority 6: Once all of the above are going swimmingly, do something bad ass for yourself. Get that BMW. Move to a cooler house, whatever. You've earned it by now.

I'm happy to get into details if you wish. Good luck!

Very good info here. The only thing I would add is when investing in your employers retirement program do not put all you money into the companies stock. Think Enron not only did all those people loss their jobs they lost their retirement saving because they had all their money invested in Enron.

One more thing regarding cash management of your standard checking account and your "emergency nest egg".

To maximize the return on your nest egg cash, you should allocate it properly between your regular checking account and your high-interest savings account or money market fund. At the same time, you want to keep your life simple in this aspect. So I suggest this:

- Figure out what 6 months of expenses amounts too. That's your "nest egg" amount.

- Keep a minimum of $500 - $1000 in your checking account at all times. It will fluctuate up and down based on when you get paid and when you pay your bills, but at its low point the checking account should have $500 in it.

- Keep the rest in your nest egg high interest savings account, so that if you added the balance of your checking account and the balance of your nest egg account, they'd equal 6 months of expenses.

This does not need to be an exact science. But this basic rule of thumb will keep you from having to constantly transfer funds back and forth from nest egg account to checking account. At the same time, you'll be keeping most of your money in the high interest savings account, earning interest on the majority of your emergency stash.