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Gimme 10 grand, Ill turn it into 15 in 3 days. Holla back.
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I am not gonna buy a car with it, I am going to save it. And I started with $1,000 that I had laying under my mattress lol. The $300 I was talking about was $300 I'd just take from my wallet and deposit for that one event and try to profit off of that (then take that original $300 back out and keep the rest to play with).
Yeah.. I have no idea about any of that stuff/or heard of it. What is it?Comment
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A money market account is just a checking account that pays interest, essentially. It is tied to the bond interest rate. It doesn't pay muc right now, like 1.5%, but in years past (and will be so in the future) you could get 3 or 4% annually. That doesn't sound like a lot, but at least keeps up with inflation. Inflation is the monster that causes everything to get more expensive.
A bond is loan to the government. You can get "T-Bills"- United States Treasury bonds, a loan to the U.S. Government and it pretty much the safest investment you can make- you are guaranteed to get you money back. They fo for 3-6% depending on the maturity date (length of the loan). You can even do "Munis"- municipal bonds, loans to a city. Municipal bonds are tax free and generally pay a little more.
But really and truly, someone in thier 20's needs to be in the stock market. Just buy a mutual fund. You will average around 10% annually... it will fluctuate, but if you just threw that $22K into an S&P Index fund right now, today- you would pretty much never have to save another dime... you would have over $1 million when you retire. If you continued adding money to it, you could probably retire in your early 40's. Time is your friend in the market... people don't start until they are in their late 20's or early 30's... but that extra decade is awesome. And Index mutual fund is the simplest investment in the stock market. A mutual find is basically a whole bunch of stocks all rolled up into 1 stock. So they are more stable... but they also dont' go crazy and make you rich over night.
Or you can do what i do, I buy stocks individually in a brokerage account, and then I have a few mutual funds for my retirement. The stock market is more fun than gambling IMO, and it has a positive EV- you actually have a house edge.Last edited by MMA_scientist; 04-12-2011, 03:52 PM.2012: +19.33
2012 Parlay project: +16.5uComment
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Is there any risk involved in this? How do you start?
Well my Dad doesn't live here anymore but I don't think my Mom knows much about the stock market. She has mentioned to me about getting the money out of the savings account and putting it somewhere else, but I forgot what it was. It might have been CDs or something like that. I am gonna ask her what she was talking about tonight.Comment
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You can start by opening an online brokerage like etrade if you want to DIY (free). Or you can just go see a financial advisor like Edward Jones or Merrill Lynch and have someone do it for you (and charge you).
Risk, yes in the short term. The overall market lost almost 40% a couple years ago... but that was the worst down turn since the depression. But in the long term, no there is very little risk- the stock market goes up over time- you just have to ignore the day to day or even year to year fluctuations. The stock market has never lost money over a 10 year period- it has always averaged around 10-12% a year. But that doesn't include dividends which makes the return substantially higher. It also assumes you put all your money in at a high point. Most advisors recommend "dollar cost averaging"- putting the same deposit in month after month regardless of what the market is doing. When it goes down, you puy $100 in and get more, when it goes up you put $100 in and get less... but it averages out. Had you bought a bunch of stock in 2008, you would have almost doubled your money now.
Indidual stocks are more risky, somewhat. Like you can buy Coca Cola or GE or something and you pretty much know that they are not going to go out of business. They are going to go up in value and they will also pay a dividend. But yeah, you could always buy the next Sirius and lose all your money. Bonds, CDs, money markets have no risk. You are going to get your money exactly when you want it and at the agreed upon rate.
A CD is what moms do. You go to your bank and give them $22k and they borrow the money for a specified period of time, say 12 months. You can't get the money back prior to the maturity date without paying a penalty (or in some cases, you just forfeit the interest). Then at the end of 12 months, you cash it out and they give you you original $22K, plus like 1.5%= so about $350. It is not worth it. It used to be better, you could get like 4 or 5% on CDs but not right now.Last edited by MMA_scientist; 04-12-2011, 04:17 PM.2012: +19.33
2012 Parlay project: +16.5uComment
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Scientist, I am glad I came across your blog on Sherdog. Your posts might make me rich one day. Thanks.
What about 401k? I know a guy that put $56 into his for his initial deposit in October 2007 and has put $100 a month and now had $16,000. But I am not sure how 401k works either so there is probably way more to that.
edit: nvm, he said whatever he put in ($100 a month or so) was matched by his employer, and his bonuses went directly into it for tax purposes.Comment
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I really should have paid attention in high school economicsComment
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A 401k is basically a retirement account your employer sets up. You don't have one as a busboy most likely and you can't get one. You need a Roth IRA (individual retirement account). A roth is taxed now, but the growth is not taxed. A regular IRA is pre-tax now, but taxed later. Since you have already paid tax on the money, you want a roth. Aside from that, at 20 years old you definitely want to take the hit now. But you can only put $5600 into an IRA per year. So the rest will have to go into a regular brokerage (fun!). Also, in an IRA or 401k you can't get the money out until you are 59.5 years old... since you are going to retire when you are like 42, you need access to the money.2012: +19.33
2012 Parlay project: +16.5uComment
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Well they don't teach you anything useful in basic econ, even in college. I didn't get interested in this stuff until I was in my late 20's. I started around 2005. But then I had kids and my wife stopped working, so I didn't have a lot of play money, I just did the responsible thing and funded the IRA. I am just now getting back into it.2012: +19.33
2012 Parlay project: +16.5uComment
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sorry for the rants. There are 2 subjects which you cannot ask me about... this is one, I think you guys know the other.2012: +19.33
2012 Parlay project: +16.5uComment
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Yeah, I realized after posting your employer sets the 401k up. I definitely don't have one now, I get paid under the table even. I am going to start reading up on all this stuff, it would be nice to have a fund to put my money into continuously and basically "get paid" for it.Comment
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Poopoo who gave you 22,000?2015 MMA BETTING CHAMP
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