XIEmperorIX

iTrader: (2)

OK so my tC should be paid off by the end of this year-early next year and I want to start saving/investing. Looking aruond and so far I have found the higest interest rates (avaible to me anyway) are around 1.5%-2%.

Should I do a savings account?online CD? IRA? or should I open up more than one type>?? I haven't had a chance to actually go down to a bank or do a lot of research (yet) but wouldn't mind getting input from personal experience as well

BTW this will probably start sometime next year..my goal is to start saving on or before I turn 24 (april 7th 2010).

Any help would be awesome

HeathenBrewing

Things like banking accounts and CDs are not really investments. Both are simply savings accounts IMO, and neither will give you more than 2.5% return. How much you got to invest?

Some CD info here:
http://www.bankrate.com/

If you want to invest, look into stocks: http://www.tdameritrade.com/welcome1.html

good prices especially for high volume trades.



To start, I would recommend listening to some podcasts here to get a better understanding of investing:

http://www.businesstalkradio.net/weekday_host/rl.shtml

dp-_-

if going to a financial planner, they will explain everything. there are high risk investments and low risk.

A cd is a low risk investment and they will always give you a return. It will just take alot longer and you will make alot less.

A stock investment is high risk and can either cost you money or make you money. If you lose you lose, but if you win, you can win big.

HeathenBrewing

Yeah, its important to determine your tolerence to risk. That will determine your strategy. My opinion -youre young - look at something besides CD. Those generally wont even keep up with the rate of inflation.

Stop by a library and pick up a few books, or go buy Investing for Dummies. IforD is good for beginning to understand the world of investing.

NYNCTC

iTrader: (2)

pull that nike box out and put money into that haha

theoneandonly

As someone who is married to a Business Banker and Father-in-law was a big banker with Wells Fargo. I have learned a lot. One thing i highly recommend is picking up one of Jim Cramers books. There is one that i think is tittled something like "Mad Money" It talks a lot about the different types of things to invest in. Such as CD's, IRA's, and Stocks. Jim Cramer started his days living out of his car for two years before making it big. If you buy stock remember to research which company to invest in, and research that company after you buy the stock.

Your also 23, right? You have many years of investing ahead of you that you can go with high risk investments and then turn them into low risk investmenst as you get closer to retirement age.

IF you have the time, i would suggest getting into stocks, BUT MAKE SURE YOU DO YOUR RESEARCH ON THE COMPANIES PRIOR TO AND AFTER BUYING THE STOCK. By anaylizing what the company is doing or talking about doing you can determine when to sell and when to hold.

Be carefull with talking to "financial planners" and brokers. A lot them will use terms that you will not understand without doing your own research. They will try to make it seem very complicated so you will feel like they are the best person to manage your investments. There are also Mutual Funds if you don't have time to do a lot of research on each company you buy stock in. The only thing is do research on the broker to see what they are doing. If they leave the company after making you a lot of money, take your money out.

Bottom line is do your homework before investing in whatever you want to invest in. I hope you make a good discision.

I spend a lot of free time looking at the companies i bought shares in and looking for other companies to buy share of. If you want to talk more about stock or other investments let me know. I have a lot of resources available and am willing to be a sounding board for ideas. Who knows, in your researching you might find a next "microsoft" or "crocs". Both of those are ones that people wish they invested in at the bigining. We all know how big Microsoft got and Crocs basicly did the same thing. We missed the boat on both those companies to see a large increase in profits.

Sciond

ok here is my .02...Buy Real Estate NOW...Bottom of market is about where we are. Interest rates are low.. all interest and closing costs are tax deductible, $8,000 top line tax deduction beyond that for first timers..... compared 1-2% or risky returns? no brainer...and oh BTW there is a finite amount of land

theoneandonly

Real Estate might not actually turn around for two more years. Check out what the experts are saying.

HeathenBrewing

Gotta agree that real estate is not the best buy right now. Forbes wrote a huge article last October, saying the market hit bottom and to BUY NOW. Since then, it has hit new record lows. RE requires a huge investment as well.

IMO, RE will stay low for at least the rest of the year. Probably into and even through next year.

To OP - do some homework to see what you are comfortable with. I like stocks because you can play with as little or as much as you are comfortable with, and there is no loger term commitment.

HeathenBrewing

Another option is currency trading, its like stocks but with money instead. Heres a link to a free practice account, where you have 50K in virtual cash to play with:

http://www.fxcm.com/?CMP=SFS-7016000...eyword=032007b

Sciond

you guys can do what you want... I am telling you the market is not done going south...it is gonna get worse one more time and it will lay the smack down...where land is always going to be valuable and come back strong and like I said with tax benefits available your crazy to be in the market now if you do not already own land....wealth has always been created in down by folks who have bought real estate...history repeats itself

BZinn1

I would invest in Aha Toro Tequilla........at the rate I am going through it this year the value of the stock will go way up.........j/k.

At your age investing is a great opertunity......you can do both long and short term investments.

A long term investment to make is a home,too many peole buy homes and then sell them 5 years later and try to make a fast profit instead of doing it for the long term,now we have millions of home forclosed and worth nearly nothing,time to buy them is now for the long term.

Short term stocks are good but you can get your butt handed to you in this economy very quickly trying to do them short term as they are also a long term investment,but can make big money short term........

If you have a 401k where you work that is a good way to make money,if your employer allows you to invest and they match to certain % that is good,sometimes you get stock purchase options at a discount,bad part to 401k is you do not always have access to your money to do what you want when you want.....also a long term item..........my wife uses hers as a way to take loans out on it each year and pays her self back the interest she pays to her 401k is equal to what it would of made had she not taken it out so it is win win.........

Savings accounts are not the best way to do anything as the bank has your money and uses it daily to make themselves money and they give you scraps for using it.

When I was young I bought lots of Bonds and hung ontothem till they matured,paid $100 and in 5 years got $200,also a slow way to make money but if you do enough of them they make money

theoneandonly

Bonds are very low risk but like what was said, it is a VERY slow way to make money but very safe. I still say do some research on the different ways to invest and pick the best one for you.

Have you ever listened to what economic experts are saying? Real Estate is going to be the last market to come back becuase of how hard it got hit. Especially in Florida and California where it hit the worste. This is not just my opinion but the expertise opinion of the experts that look at the economy every day. Plus are you really only 13? If so, keep hitting the books and learn as much as you can but keep an open mind about it.

pickledchang

real estate is bad if you invested back in early 07 or earlier and want to sell now... its a good time to buy if you are planning to invest long term. just because it will take time to grow doesnt mean its a bad investment. CDs usually wont even keep up with inflation, so it doesnt matter how long you keep them for. land will also adjust with inflation and there is a finite amount. even in todays crappy market, you'd be hard pressed to find property thats not worth more than double what it was 30 years ago. its also nice because its an investment you can use; say if you want to camp on it, develop it, or whatever.

roth IRAs are another great way to go because you pay taxes before you put the money in... so any growth from interest is tax free, unlike a standard IRA.

its_ikon

i love when people say to check what the "experts" are saying, but they don't know either.

theoneandonly

i do agree that it's a good time to buy real estate but not to look at it as a way to make more money. Also all the houses that hit double or more is now down to almost half of what it was worth 2 years ago. If you buy now you get a lot of tax breaks/refunds. I myself, am looking for a house right now but not as a investment. So to say it is the time to buy because of all the bills giving relief to housing and all of the tax breaks that you can get right now for buying pre-existing houses. You won't get those tax breaks for buying property and then building. You can also say it's the time to buy a new car because of all the refunds and deductions you can get on a new car.

If your going to go with an IRA, a ROTH IRA is the one to go with. You are using money that you already paid taxes on and cannot get taxed on what you put into it. Just do your homework on what the IRA is investing your money into and keep an eye on it.

pickledchang

just remember you cant take the money out unitl age 59.5, or youll pay something like a 10% penalty.

if you can stuff away about 5k a year (the current limit on an ira), you would be looking at close to a million by age 60 if you can get manage about a 7% average return.

right now, about the only funds ive skimmed over that are doing good are short, med, and long government bond funds. the chances of the government defaulting on a loan are slim, but who knows whats going to happen soon. there are probably others that are doing well, but i havent looked recently. although its not doing so well over the short term, the S&P index funds are generally healthy for long term growth.

im not sure about other banks, but if you have the PMA checking/savings account setup with wells fargo, they will sit you down one on one with someone to help you set your IRA up and help you decide what funds to start with that best match your investing style.

the first thing you need to do is figure out your style of investing, then figure out where you want to put your money. just remember not to put all your eggs in one basket and spread your money out. diversity = less volatility.