Investing? Its hard

**Broken Arrow** · 09-04-2009, 12:56 PM

Welcome Veronica.

Usually, saving for college education comes to mind, but do you have an emergency fund? If not, I would hang on to the money for now.

Also, can you please give us more details on your overall financial situation?

**disneysteve** · 09-04-2009, 02:47 PM

Welcome, Veronica. I'm with Broken Arrow. I'd want to know more about your situation before recommending what to do with that money. Do you have a good emergency fund? How are you paying for school? Do you have any debts? Are you saving for retirement?

You say you have money coming in that is "helping me survive" which sure sounds like you may need that $3,000 yourself rather than giving it to your daughter.

**GREENBACK** · 09-04-2009, 03:02 PM

I agree with the above. You'll see it mentioned here again but there are more than a few ways for a young person to pay for education and to take care of themselves. Taking care of the here and now should be first and considering your personal financial needs when you're past the point of working should be second. The other stuff comes after this.

I say that without knowing if the 3k is discretionary or not. A bigger picture of your finances would be helpful.

**zetta** · 09-05-2009, 02:55 AM

I always like to answer the "how do I get started investing" question with a list of books I've found helpful:

Books I've found useful, and the main topic covered. I've placed them in the order I would recommend reading them. You can click on my Booknotes catagory in my blog to read my summaries of numbers 1, 2, and 6.

1. All Your Worth (getting your basic financial picture in order so you have money available to invest)
2. The Complete Idiot's Guide to Getting Rich (helps with goal setting)
3. Bogleheads Guide to Investing (explains mutual funds and the indexing strategy)
4. The Intelligent Asset Allocator (how to structure your portfolio)
5. Morningstar Guide to Mutual Funds (how to analyze and pick funds)
6. Common Sense on Mutual Funds by John C. Bogle (highly technical analysis of index investing)

**PetMom** · 09-05-2009, 06:19 AM

You are on the right track of wanting to 'invest' as opposed to 'trading' which can be similar to gambling your money.

I also agree: you need to have an emergency fund, have credit cards under control and a retirement fund.

I thought there were some college investment funds available - but like others stated you need to be more concerned with your own situation: emergency fund, secure housing and retirement.

Then you can get into investing.

You need to study the stock market or your investment vehicle very thoroughly and that can take a while.

Read the books listed and I would add read books about Warren Buffett and his investment strategy. Diversified conservative investing is a better start than any of the currency or stock options markets.

A website forum that has a lot for beginners is "The Motley Fool".

Be careful with getting with a broker who will give you advice on what to buy as they will watch out more for their bottom line than yours.

**Broken Arrow** · 09-06-2009, 11:30 AM

Originally posted by zetta View Post

1. All Your Worth (getting your basic financial picture in order so you have money available to invest)
2. The Complete Idiot's Guide to Getting Rich (helps with goal setting)
3. Bogleheads Guide to Investing (explains mutual funds and the indexing strategy)
4. The Intelligent Asset Allocator (how to structure your portfolio)
5. Morningstar Guide to Mutual Funds (how to analyze and pick funds)
6. Common Sense on Mutual Funds by John C. Bogle (highly technical analysis of index investing)

All good books, and are highly recommended.

But I admit it's also a lot to take in if you are just starting out. At least, that's how I felt when I started out. It made me feel dumb and over-whelmed. So, I just wanted to say that if you feel the same way, please know that it's not something wrong with you or anything, and that I think everybody start out feeling that way.

Also, please realize that investing actually does not have to be hard. I like to compare it to cars. No matter how much more knowledge and skill you acquire in being a mechanic, it still will not change your original assertion that Civics and Camrys are decent, reliable cars. If anything, you will only realize how much more so. So, you just need someone to steer you towards the right direction, and we can help you with that....

**Scanner** · 09-06-2009, 12:41 PM

No matter how much more knowledge and skill you acquire in being a mechanic, it still will not change your original assertion that Civics and Camrys are decent, reliable cars. If anything, you will only realize how much more so

But what if you meet someone on the forum with a contrary theory that Yugo's and Pinto's are good cars?

LOL.

Seriously, to Vero, you are craving something simple.

If the money isn't for 18 years, I would pick a Target fund from Vanguard, T. Rowe Price or Fidelty, like Target 2025. That's called the "vehicle" for getting you there. The idea is simple. . .it starts off mostly stocks and then slowly changes to bonds and cash as you reach the Target.

If it's earmarked for college, then I would put it into a 529 account using the above vehicle. That's called the account, different concept than actually the vehicle.. If it is not earmarked for college, then put it into a UGMA account. (uniform gift to minors account) using the same vehicle. She can then take it as she sees fit when she turns 18 and blow it on a car, college, whatever.

Any account rep from these mutual fund companies will be able to assist you. Try not to get bored though. . .the tax ramificatiosn are different for each account.

After that, read up and alter your investment strategy as you deem fit.

**Broken Arrow** · 09-06-2009, 01:54 PM

Originally posted by Scanner View Post

But what if you meet someone on the forum with a contrary theory that Yugo's and Pinto's are good cars?

Hehe. Well, I'm not opposed to the idea that even um lemons can be turned into pavement pounding lemonades. I remember an episode of Top Gear where they retro-fitted an old Soviet equivalent of the Pinto called the Lada into fighting form. What they ended up with, though, was more like a Porsche in Lada's clothing, but it became a superb vehicle nonetheless.

Certainly, technical wizardry can do wonders with lots of things, but... it still doesn't change the fact that Civics are Camrys are still generally decent cars.

Investing? Its hard