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post #1 of 6 (permalink) Old 11-03-2006, 06:13 PM Thread Starter
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Investing

I recently got a job and have money to invest. I cannot invest money into the 401k plan at work till another year. I am looking to invest about 500 to 1000 a month. Any ideas in what I should do.
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post #2 of 6 (permalink) Old 11-03-2006, 06:15 PM
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Re: Investing

Open an IRA and then transfer that into the 401k when you are able?


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post #3 of 6 (permalink) Old 11-04-2006, 08:29 AM
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Re: Investing

Put the maximum amount into a no load Roth IRA Mutual Fund account (Vanguard Funds)... Put the rest of your money into a high return Money Market account. Possibly with an internet bank like ING Direct...








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post #4 of 6 (permalink) Old 11-06-2006, 11:13 AM
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Re: Investing

My suggestion is this. It sounds like you just recently started a 'real career'.

Save up short term at least 3 months pay after taxes (so if you earn $2000 a month after taxes, save $6,000) and put it in a savings account. This is just in case money. Then I suggest you save what you need monthly for bills, etc plus at least 2 pay checks worth of cushion in your checking account...this is your buying stuff money and paying bills money.

Then whatever you want invested/saved I suggest you split it this way.

short, medium, long term.

Long term would be your 401k or an IRA. For tax reasons if you need to before you can invest in a 401k, you could set aside a couple thousand and drop that in an IRA...maybe $2-3,000 this year before you can invest in your 401k.

Medium term I would ignore for the first year or two. However, once you can medium term would be stocks and bonds. Bonds are very safe (so long as you are not buying junk bonds, get treasury bonds, especially I-bonds...they increase in value at the rate of inflation plus a certain floating percentage amount...so they are gauranteed to go up in value)...but also generally not a great way to expand a lot in terms of your investments. Stocks can be volitile, so I do not highly suggest them to invest all your money in...especially not a single stock. Mutual funds can also be volitile, but usually not as bad. Research mutal funds before buying and see what their rate of return has been the last decade year by year. Expect that in the long run there will be some bad years and some good years...but you should generally see an increase in value every year and in the long run (a couple of mine have 5 year returns over 30%).

Short term would be money market accounts and certificates of deposit (CDs). ING direct is supposed to have some very nice money market accounts as does fidelity. You can usually see the rate of inflation plus .5-1.5% (sometimes a little higher) intrest on a money market account or CD. Both are great because if you need money it can usually be accessed that day or within 24hrs.

My suggestion is to save up the savings account and checking account money first. Then save some for that IRA, once you have 2-3k saved to open one do that. Then focus on short term investments till you have what you think is a reasonable amount saved up (maybe $5k for a 12 month CD and open it). Then drop the money in your 401k next year. Make sure you save a bit out to also build up medium term investments.

If you can afford to, being single and without 2 incomes, if you can even put $2,000 a year in medium term investments...so long as they are choosen wisely you can build up a lot of money there.
-Matt
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post #5 of 6 (permalink) Old 11-06-2006, 11:19 AM
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Re: Investing

Just be aware that if you open an IRA account, the max. you can deposit is $4000/year if you're under 50 years old and $4500/year if you're over 50.

Also, if you decide to roll the money from an IRA to your 401k, make sure your employer will allow it. You can have multiple retirement accounts if you want.
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post #6 of 6 (permalink) Old 11-06-2006, 11:33 AM
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Send a message via AIM to Notorious R.I.E.
Re: Investing

Roth IRA
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