I think we are all interested in taking control of our financial lives.
I have a good 20+ years on you (I've circled the sun a few times) so you get points for not waiting.
Or, at least not waiting as long as "the other guy/gal" who is living in regret and is stuck there.
Even if you don't get many bites on this thread it appears that you have your attitude lined up.
Good luck.
Started this 35 years ago (I'm 75) and used the saved money to buy US saving bonds. Bonds were a good investment then, not so good now.
At your age I would recommend you start out with a Certified financial planner (I used Ameriprise).
They will review with you just where you stand financially right now and recommend a plan for the future.
The financial planner can advise you on where and how to invest in the various markets.
The other things I would do is take maximum advantage of any 401K type saving plans your employer offers.
Also, just force yourself to set aside a certain amount to save each pay period. If you can have it deducted from your paycheck before you receive it , it doesn't hurt as much and you will learn to live without it. I started out at $5:00 a pay period and as my pay increased I moved it up to $25:00. Started this 35 years ago (I'm 75) and used the saved money to buy US saving bonds. Bonds were a good investment then, not so good now.
I agree with all that So you started at ~40, similar to my ~35. Do you regret not starting sooner, like I do?
For sure, although I feel like many are interested but actually do little to nothing about it. I've occasionally tried to bring up the topic with friends, especially those that really need it, but nobody really wants to discuss it. Too much effort. Much easier to poke around on that smart phone, consuming rather than producing. (or at least consuming more than they produce)
Yeah, bonds are safe, but (like CD's) they are pretty useless for investing now and have been for at quite a while... simply because the interest rates have been so low, for such a long time. At age 35, one should certainly be looking at stock mutual funds because there is plenty of time for them to gain value. The key with investing is time- it is more important than anything else (a close second being diversity). The earnings will compound and re-invest, and time will absorb the market instabilities and ensure dollar-cost-averaging with regular purchases (at least once a month, if not more, is good).
Like we both said, it is imperative to take advantage of any and all employer-driven pre-tax savings plan, because for each dollar you save/invest, that comes right off your taxable incoming. This not only lowers your annual taxes, it puts MORE money in an investment where it can work for you. When you take the money out when at or near retirement, presumably your income bracket will be much lower... further reducing what you would have had to pay in taxes later. And with such programs there is usually some type of matching... THAT IS FREE MONEY! AND MONEY YOU PAY NO TAX ON NOW! It doesn't get any better than that. So one should do everything possible to take as much advantage of that as possible.
Let me just say once more that I'm 50, not 35 ...
Anyway, I think bonds are great, for my plan, which is to hold a fairly small percentage of them, let's say 10% of invested money.
So on day 1 you put $100 in bonds and $900 in stocks. 2 weeks later the bonds have fallen to $90 and the stocks have risen to maybe $920, so now your mix is at 8% / 92%. And say you have $20 from your paycheck to add to your investments, you would probably put all $10 into the bond fund since it had fallen, and since the $20 would bring your mix up to $100 / $920 which is 9.8% / 90.2% ... very close to your target. This plan forces you to buy low. You would follow this same strategy throughout including retirement: If bonds were below your 10% target then you take your distribution from stocks, and vice versa.
By the way, one of my employees (who is also a friend) is like that. Couldn't be bothered. Wanted to play video games and buy junk. I had to push him hard for YEARS to get him to start saving. Finally, after 5 years, I put together a spreadsheet showing what money he would have if he had just contributed $4000 a year which would get the $2000 employer matching, then compounded everything over those 5 years at a very conservative expectation of 6% APR. I also showed him just the FREE money he threw away by doing it without counting his required $4k. And also showed him how it is NOT $4k coming out of his pay checks because of being pre-tax.
He was floored and FINALLY started.
I'm surprised he tolerated you harping on his finances for years. But that's great that his light finally came on.
Most people respond with something like, "Um, yeah, where am I going to get $20/ week to invest? Every dollar is already spent." ... as they use their late model smartphone, frequent Starbucks, eat out, buy appetizers, drink Heineken, etc.
I wouldn't disagree with that. As long as it is a small amount. Bonds just don't earn much of anything, so it is more of a "holding area"
That is a good way of looking at it. One of the HUGE mistakes many people make is to TRANSFER money between funds... (which is, selling one thing to buy something else) that is generally a huge no-no unless you REALLY know what you are doing. Just reallocate where you are putting the money when you buy. Don't sell.
Another important factor is as you get closer to retirement, you will want to skew your investment purchases to be more and more risk-averse (safe/conservative), since there is less time to recover from any market problems).
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Anybody interested?
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A few have touched on investing principales but haven't actually named them. Dollar Cost Averaging [...], just invest something, ignoring trying to buy at the lowest price. It really works.
But don't realign your portfolio every month as the brokers will always take their cut. Yearly is more/less fine.
actually... the ONLY person, that ciuld benefit from all of of this, "wait a minute..."
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uhhh
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