i really want to invest a little into some stocks

**SonofaBish** · 02-28-2007, 04:11 PM

Originally Posted by Jared

well im 25 so i guess im still kinda young. my job is great excelt there is no retirement package available. so i was looking at stocks to make me som money over the next many years. i currently have an ING savings account at 4.5% but i want to do better. i also have a shitty savings account at our local credit union which i use for my sons savings bonds and college savings account. it is a crappy .5%.

i will have to look into mutual funds a little i guess.

i kinda thought since the market dropped yesterday that this week would be a good time to try it.

yea... like i said, and OneSweetDay backed me up on, the mutual funds are a spectacular way to go.....
If you can set aside even a little bit out of each paycheck right now, by the time you retire, it can really amount to a lot. For example, the "rule of 72" is a very good estimation for how long it takes money to double at a specific interest rate.
72/(100*i) = # of years it takes money to double at a specific interst rate i ...
e.g. at 7.2% interest rate, it will take 72/(100*.072) = 10 years.... so @ age 25, your money will double atleast 4 times before you retire... and since you'd keep adding to it every month... it'll really add up....

**J-rod** · 02-28-2007, 04:14 PM

Originally Posted by SonofaBish

yea... like i said, and OneSweetDay backed me up on, the mutual funds are a spectacular way to go.....
If you can set aside even a little bit out of each paycheck right now, by the time you retire, it can really amount to a lot. For example, the "rule of 72" is a very good estimation for how long it takes money to double at a specific interest rate.
72/(100*i) = # of years it takes money to double at a specific interst rate i ...
e.g. at 7.2% interest rate, it will take 72/(100*.072) = 10 years.... so @ age 25, your money will double atleast 4 times before you retire... and since you'd keep adding to it every month... it'll really add up....

im loking into those now. i just need to figure out which fund to go with, which company, and how/if i can do automatic deposits each month.

**SonofaBish** · 02-28-2007, 04:32 PM

if you want another formula to look at... you might wanna say.. ok, how much money will i have in "n" years if i deposit "x" every month for the next 40 years.

at an assumed interest rate, i :

Future Value = FV = x*(((1+i)^n)-1)/ i)

e.g. if you deposit $20 every month over the next 40 years at an interest rate of 5% anually (making i(sub12) .05/12 = .0041666) :
20*(((1.0041666)^480)-1)/.0041666) = $30,520.40

pretty substantial if you ask me... and that's a measly $20

**SonofaBish** · 02-28-2007, 04:33 PM

or if you know you want a $1M at retirement, choose an interest rate that you think you'll never go under, and solve that equation backward for "x"

pretty simple stuff really... a lot of people just don't understand the concept of saving until its too late... I'm an Actuary in health care now, but i used to do retirement for a worldwide actuarial consulting firm, and it was apalling sometimes to see how many ppl were pathetically prepared for retirement.

**J-rod** · 02-28-2007, 04:34 PM

Originally Posted by SonofaBish

if you want another formula to look at... you might wanna say.. ok, how much money will i have in "n" years if i deposit "x" every month for the next 40 years.

at an assumed interest rate, i :

Future Value = FV = x*(((1+i)^n)-1)/ i)

e.g. if you deposit $20 every month over the next 40 years at an interest rate of 5% anually (making i(sub12) .05/12 = .0041666) :
20*(((1.0041666)^480)-1)/.0041666) = $30,520.40

pretty substantial if you ask me... and that's a measly $20

is a nice chunk of change for $20/month

i would like to do at least $100/month into one of these accounts and still maintain my other 2 savings accounts

could you solve it real quick for $100/month.

**SonofaBish** · 02-28-2007, 04:55 PM

Originally Posted by Jared

is a nice chunk of change for $20/month

i would like to do at least $100/month into one of these accounts and still maintain my other 2 savings accounts

could you solve it real quick for $100/month.

152,602.02

**SonofaBish** · 02-28-2007, 05:03 PM

Theres also a bunch of stuff you wanna look at as far as how much money you want for retirement. The general rule we always used was that you want to be able to have 70% of your final years' pay for each year of retirement to maintain your current living style.
So, for arguments sake, if you made $100/yr when you were 65, you're going to want $70/yr. to maintain your current lifestyle (and of course inflation can cause changes to this, but you get the point)...

So, lets say you assume you will be making 80,000 salary per year when you retire.... then you want to have enough money set aside so that you can have 80,000*(.7) = 56,000 per year through retirement. Well, to know how much you need at age 65 to acheive this, you need to make an assumption for how long you'll live. So we'll say you live to age 85 (20 years).
You're going to need $707,118.13 in your bank account at age 65 to acheive this (this assumes your money continues to get 5% annual interest throughout retirement).

Therefore, to get 707,118.13 at age 65, you need to put aside $463.37 per month for the next 40 years.

edit: i'm leaving work soon and i can update further with more formulas when i get home if you want to be able to mess around with this urself

**racefan** · 02-28-2007, 06:49 PM

No it is not for that, we already have a shock system to fry those tweebs!! It's racing funds that we will invest in. Sell that non racing show Bitch and invest with 5TH. STREET RACING for a good return!!!!

**One Sweet Day** · 02-28-2007, 07:01 PM

Originally Posted by SonofaBish

yea... like i said, and OneSweetDay backed me up on, the mutual funds are a spectacular way to go.....
If you can set aside even a little bit out of each paycheck right now, by the time you retire, it can really amount to a lot. For example, the "rule of 72" is a very good estimation for how long it takes money to double at a specific interest rate.
72/(100*i) = # of years it takes money to double at a specific interst rate i ...
e.g. at 7.2% interest rate, it will take 72/(100*.072) = 10 years.... so @ age 25, your money will double atleast 4 times before you retire... and since you'd keep adding to it every month... it'll really add up....

you know the rule of 72? only like 5% of the population knows that rule! nice to hear! good advice!

**SonofaBish** · 02-28-2007, 07:20 PM

Originally Posted by One Sweet Day

you know the rule of 72? only like 5% of the population knows that rule! nice to hear! good advice!

haha, like i said, i'm an Actuary... if it has to do with interest theory/calculus/statistical methods, i know it.... (or atleast have learned it at one point)

**J-rod** · 02-28-2007, 07:24 PM

you two have been a big help. got me thinking a mutual fund is more want im looking for in the long run. tried talking to the mrs about it and she said "i dont know anything about that stuff, i dont want to know anything about that stuff. just dont loose all our money"

now i just need to decide what company and what fund to go with. i tried looking at your companies site one sweet day...but it confused me a little, about the fees and what not. i looked at scottrade and they had some no fee ones there

**One Sweet Day** · 02-28-2007, 07:36 PM

Originally Posted by Jared

you two have been a big help. got me thinking a mutual fund is more want im looking for in the long run. tried talking to the mrs about it and she said "i dont know anything about that stuff, i dont want to know anything about that stuff. just dont loose all our money"

now i just need to decide what company and what fund to go with. i tried looking at your companies site one sweet day...but it confused me a little, about the fees and what not. i looked at scottrade and they had some no fee ones there

no fees! none...what you put in is what get put in!

pm'd

**stanggrrl** · 02-28-2007, 07:43 PM

The best advice I ever read ANYwhere was The Motley Fool. They have their own web page, radio show, etc. Sort of like investing and money management for dummies. I took their advice and consistently picked the highest yielding funds for my 401Ks.

I found an all-in-one CPA/Financial Planner/Broker 6 years ago and am very pleased. Mutual Fund performance (even when most funds showed a loss mine showed a modest gain) has been good. I'm in it for the long term and I don't think I'll be disappointed. Since I found these mutual funds, I've yet to find a better family of funds. (Outperformed BlackRock, Fidelity and Vanguard who I'd been forced to deal with in the past.)

Buy/sell stocks? A fool and his money... Better off taking the $ you'd invest in stocks and play the slots. Unless you're VERY knowledgeable about business and the markets.

**sutyak** · 02-28-2007, 07:45 PM

Mutual Funds = Good
Day-Trading = BAD

Find a good company like Fidelity and set yourself up some mutual fund investments.
Everything is done for me through my company, so I don't really know where to start from scratch.
https://401k.fidelity.com/401k/tools.htm
or just www.401k.com