Alright, so I've had a savings acount for the last 2 1/2 years, pretty much saving the old fashioned way (a certain amount goes in every month). The money in that account has been slowly growing but not at a rate I'd like to see. I've been thinking about taking some of that money and investing it but I'm a virgin when it comes to that sort of thing.

I'm wondering if anyone on the board could give me any advice on how to go about building a portfolio. As it is, my money's just sitting there collecting dust in my savings account and I really don't see how that's helping me. What are some good sites? What's the difference between places like E-Trade and Ameriprise? I'm like a lost sheep trying to find my way home...help me out folks!

Most of my investments are tied up in instant scratch lottery tickets.

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Fire Phil Emery

Hey, I thought you were a hot sexy Irish girl. Did you have a sex change?

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Kid Cairo's Boers & Bernstein YouTube Channel

Kid Cairo: 2013 March Madness Tournament Winner!

"Cowabunga? Cowa fucking piece of dog shit! This game is diarrhea coming out of my dick!"

Yes, I went from often to never.

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Fire Phil Emery

What type of savings account do you have it in? There are some internet banks that offer higher interest rates (like ING and Emigrant) on savings accounts CDs. Once you have enough in savings to cover 3-6 months of income (in case of emergency), then you should start looking elsewhere to put your money.

Do you have a 401k through work? If not, it might be a good idea to set up an IRA. It's never too early to start saving for retirement.

Mutual Funds are a fairly stable investment.

Think about doing a consult with an investment person and see what they say. You'll get advice more specific for your financial goals.

It depends on what you are looking for. If your main goal is to not lose money at all, but just make a bit more than you are now, Spaulding's suggestion isnt bad. If you are looking to risk a bit, then theres alot more options out there.

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Fare you well, fare you well
I love you more than words can tell
Listen to the river sing sweet songs
To rock my soul

Mutual funds huh? Interesting. I'll look into that although FavreFan, I'm not completely opposed to risking a bit either.


It's in a plain ole savings account through TCF. I do have a 401k through my job but I haven't signed up for it. I'll look at ING and see what they're about.

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Kid Cairo's Boers & Bernstein YouTube Channel

Kid Cairo: 2013 March Madness Tournament Winner!

"Cowabunga? Cowa fucking piece of dog shit! This game is diarrhea coming out of my dick!"

There are mutual funds that have target retirement dates. Let's say you want to retire in 2050. The investements in that fund are riskier now (bigger risk, bigger reward), but as you get closer and closer to 2050, the investments gradually become "safer" and "safer."

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Start contributing to your 401k. Most companies will match to a certain %.

+1. You're giving up free money if you don't.

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Fire Phil Emery

This is a very interesting subject, and something I would like to hear more about as well. I'm kind of like Kid Cairo in this regard - I do have a savings account, and a I do have a 401K that's doing well, but I don't know much about mutual funds/IRA's, online trading, etc and I'm sure there are things I could be doing with my money that I'm not.

From what I know- which is very little- it's almost impossible to beat a well managed mutual fund over the long term, even though there is added risk in the short term.

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Fire Phil Emery

+2...definitely do it Kid. I just signed up for mine. about 2 weeks ago. My cousin works for fidelity and he said that he talks to all kinds of people that are in our age bracket that have like 5 figures already stacked in their account. Unfortunately, not too many of "us" are taught to do that. (Not to get race baitey, just stating the facts.....)

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Some suggestions; some have been previously stated:

1. If your company offers a 401k, sign up now. Otherwise you are leaving free money (i.e the company match) on the table. Unless you are over 50, or are extremely risk-adverse, sign up for the "Aggressive Blend" of investments so you have a shot at earning a return greater than the rate of inflation, which is your greatest risk.
2. Save enough cash so you have a 3-6 month salary 'nest egg' in case of emergency
3. Pay off your credit cards. No investment (outside the ones touted in emails from Nigeria) can offer the return you make by eliminating credit card interest
4. Invest in mutual funds via Vanguard. Their low expenses can help increase your return. And in case it is not clear, stock mutual funds are merely a basket of stocks, either picked by pros or set to mirror any of the various stock indexes (i.e. the S&P 500). Invest the same amount each month via automatic withdrawels from your bank account. That way you don't have to worry about trying to time the market.
5. While some people consider stocks to be risky, the true risk is inflation. If you have your money in a savings account paying 2% and inflation is running 3%, you are guaranteed to loose money. While there is no guarantee in the stock market, over the past 30 years $2400 per year invested in a S&P 500 index fund would have returned a bit more than 12% per year.
6. Buy used cars instead of new. Let someone else pay for the depreciation and invest the difference. Can mean big bucks down the road.
7. Remember the "rule of 72." Take the annual return you are making, divide that into 72, and the resulting number is how many years it takes your money to double. If you have $10,000 and are earning 8% per year, your money will double to $20,000 in 9 years. If you are only earning 3%, it will take 24 years for your money to double.

Not sure how old you are but having six figures isn't that uncommon either assuming you start early enough.

Mid-late 20s.

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Kid Cairo's Boers & Bernstein YouTube Channel

Kid Cairo: 2013 March Madness Tournament Winner!

"Cowabunga? Cowa fucking piece of dog shit! This game is diarrhea coming out of my dick!"

Kid,
Take all your money and follow Mitch's advice from the wagering section.
With his 72 winning percentage you'll be retired by the time you're 40

Do the 401k you dope.
You'd be likely earning a 10%-20% return for this year with the same painless deduction that your savings account provides.
If you can, maximize your deduction to your employer contribution.
In most cases it's set up as employee matches XX% of the employee contribution up to a certain percantage of the salary. So if they match 50% up to your 6% than do at least 6% of your salary.

Most 401k managers (fidelity, E-trade) will offer you a free investment account with your 401k account. You may be able to further invest into funds that your 401k may not provide. It's an easy way to start a portfolio.

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“Mmmm. Move over, eggs. Bacon just got a new best friend - fudge.”

Also, if your savings account is yielding under 4% get rid of it and get an ing orange savings account at www.ingdirect.com. The rate is currently 4.3% which was much better than the .5 I was getting from my checking account.

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You do not talk to me like that! I work too hard to deal with this stuff! I work too hard! I'm an important member of the CSFMB! I drive a Dodge Stratus!

How do you transfer money from your current savings account into an Internet one like this ?

Is there any worry that a site like this would disappear, things like that ?

ING is one of the biggest companies in the world. It has as much of a chance of going away as microsoft.

You just setup what is called an ACH transfer. It is really easy. You just type in your account number and bank number(available on your checks). They will make one or two small deposits to your account(both under 10 cents) and you will verify them. You then just go in and initiate a transfer and within a day or two the money goes into the account and starts making money.

You have to keep the money you deposit in the account for 10 days, but you are free to take it out and back into your normal checking account whenever you want after that 10 day period.

I played the stock market for a few years but I am out as it is likely that I will be making a few major purchases in the next 2 years and it is not a good idea to put money in the stock market if you think you will need it in the next 3 years(some would say 7 years). I can basically beat inflation with this account and I don't have to worry about the day the stock market crashes and I lose half the value on my portfolio.

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You do not talk to me like that! I work too hard to deal with this stuff! I work too hard! I'm an important member of the CSFMB! I drive a Dodge Stratus!

One other advantage to a 401k is that it reduces the overall tax uncle sam gets from your paycheck since the investment is taken pre tax.

Most is good "general advise" for all. Get yourself a trusted advisor that is not selling the investments he/she recommends to you. That will get you an unbiased (for the most part) look at where you are , where you want to go and how to get there.

If you are young, 20-30, stocks are a good vehicle to have as you have time to see your investment work as well as Mutual Funds (no load). Make sure tyou have some liquidity in case you need cash and make sure you contribute the full amount to the comany 401k.

Buy only what you can actually afford ( no season tickets) to keep your expenses managable and your investment $$$ available for growth.

If you have a family make sure you have a Term Life insurance policy to cover all your debt. I've seen this lack of coverage devistate families.

CNNMONEY is a good site to get started and help answer some others questions I'm sure you'll have a you get further into to process of planning. There are some good calculators too that will help ease your concern about asking " dumb " questions when you finally do get ready to work with someone. By the way, there are no dumb questions. Ask, Ask Ask until you are perfectly clear and understand.

Good Luck!!!$$

Tune it to WMVP on Saturday mornings with Cannelis and Telander. They have the best advise ever.

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"It's not exactly a rocket surgery." D.J.

Kid, if you are in your 20s you should definitely have a majority of your money in mutual funds or stocks. My recommendation would be to look into passive index funds, these track certain indexes (Nasdaq, S&P 500, Dow Jones) and you don't start 2% in the hole for the "professionally" managed mutal fund administration charge. I've been investing in these for years. I'd even go as far as a 33% split among the three mentioned above.

If you want to really have some fun take 5% or 10% (at most) and short Google ticker: GOOG. It's trading almost at 700 now with multiples that are out of this universe. I am betting on a huge slew of copyright lititigation crippling the growth and profitablity of this business (much like Microsoft in the early 2000s but to a much larger extent), I could see this stock being down exponentially a couple years from now. BTW, selling a stock short is betting on it to go down (more research for ya big guy)

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"Stay out of courtrooms-but if you must go in be Well Armed and Don't compromise. You are innocent, remember that. They are guilty" -- Dr. Gonzo

I'm guessing anybody who understood this post doesn't need investment advice

+1. Id listen to Mitch though, not only was that one of the most intelligent sounding posts I have ever seen on this board, he could also pretty much make a small fortune betting on NFL games if he chose to.

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Fare you well, fare you well
I love you more than words can tell
Listen to the river sing sweet songs
To rock my soul

Another thing to keep in mind...real estate. If you don't currently own your home, now is a good time to buy, as long as you have decent credit. Interest rates are still low, and there is plenty of inventory on the market. You probably won't see home values appreciate much in the next 5 years, but longer term you will see the payoff from building equity and an increase in the value of your home. Word to the wise...don't be mislead by interest-only mortgages because they require a smaller monthly payment. Typically those payments increase substantially in a few years and/or have a large balloon payment that many homeowners don't plan for.

Also to stress...cars are not an asset. As stated above, let someone else take the depreciation and buy used. Some will argue that they don't want to buy a car that someone else has driven because of the big "how was the car cared for" unknown, but smart money drives their car for as long as they can, or until the annual maintenance costs more than half the annualized car payment. For example...average car payment is $450 x 12 months = $5,400. If your annual maintenance starts to approach $2,700 or you have a catastrophic repair (transmission, etc.) then it's time to think about a new car.

Finally, everyone who encouraged you to take advantage of your 401k was dead on. From the employer match to the pre-tax benefits, you cannot go wrong. Start contributing now, as much as you can up to the match amount, and remember that your take home pay will not be reduced by that same amount because you are decreasing your taxable income.

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Seriously?

I guess the easier answer would have been mirror my picks the first half of the football season.

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"Stay out of courtrooms-but if you must go in be Well Armed and Don't compromise. You are innocent, remember that. They are guilty" -- Dr. Gonzo

Do not invest now. You'll get hosed in less than a years' time. Wait ~2 years, buy land at the edge of development.

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The landowner effectively owns part shares in millions of part-time slaves called, "taxpayers." -Roy L
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