Financial Advice/Opinions plese

**kork13** · 01-20-2011, 01:53 AM

First of all, it's fantastic that you're asking these questions before you even get started in the work force--it will set you up for financially sound decisions for years to come.

If your job offers a 401k option with a match (for example, where they add $.50 for every $1 you contribute), you should definitely contribute to the 401k up to the limit that they will match (typically between 3-6%). Beyond that, contribute whatever you can (up to $5k/yr) to a Roth IRA. You might try starting with a simple S&P 500 stock market index fund for now while you educate yourself on your other investment options. As young as you are, you can invest in some bonds, but I wouldn't recommend much more than 5-10% of your investments being in bonds for right now. Focus on the higher growth potential of stocks.

If your job doesn't offer 401k matching, it's even more important that you start a Roth. Starting to save & invest early is easily the smartest thing (financially) that you can do right now.

**ninja_sam** · 01-20-2011, 02:01 AM

Alright first. are you part of the the merchant marines?

And second i am currently getting a disability check with a, it has a maximum of $900 a month from taxable jobs before it starts effecting the monthly amounts, will that effect anything? and also is there currently War bonds?, and if there are should i get that or what specific bonds you recommend?

**bjl584** · 01-20-2011, 05:24 AM

Take advantage of a company sponsored plan up to at least the match, and open up a Roth IRA. You can put up to 5K a year into it. I recommend that you fully fund it if you are able.

You are young, so you can pick more agressive funds to invest in. You have time on your side, so no need to be too conservative in your investimg strategy. Head to your local library/bookstore and pick up a few books on investing, stocks, mutual funds, etc. and start to learn about your options and how investments work.

**jpg7n16** · 01-20-2011, 07:23 AM

well hold up real quick. 1st you must determine if you are in a position to save for retirement at all.

Do you have any debt?
Are you going to college? Do you need any money to pay for college? Will you be taking student loans?
Do you have 3-6 months expenses set aside in cash?

I don't think we don't know enough about your situation yet to say if you should be funding retirement accounts or not.

Though I do agree that it's fantastic you're thinking along that line!

**ninja_sam** · 01-20-2011, 07:36 AM

I have 12 month exspenses set aside, No debt, and have enough money for college, was talking about what to do after college

**jpg7n16** · 01-20-2011, 07:45 AM

Then I agree with Brian, take the company match (if available) in a 401k, and put the rest in a Roth.

As far as what to invest in inside those accounts, my standard recommendation for anyone who doesn't know enough yet about stocks or bonds, is to invest in a target date fund appropriate for your expected retirement age. For you that should be a Target 2055 fund like: VFFVX Vanguard Target Retirement 2055 Inv, mutual funds, quote, price - Morningstar

May I also ask why you have so much in cash? Saving for house? Unsure what to do with it? Just like the security of having a bunch of cash on hand?

**ninja_sam** · 01-20-2011, 07:47 AM

It is stated in above posts that i get a disability(at the maximum amount of $674 a month) and it mostly all go to savings because my family was in the bottom ofy lower class range growing up, and decided to make m kids have easy life, so i decided to save to get started on financial security early

**ninja_sam** · 01-20-2011, 07:53 AM

And also should i start learning information on stock trends and investments during college studies?

**jpg7n16** · 01-20-2011, 07:54 AM

Originally posted by ninja_sam View Post

It is stated in above posts that i get a disabillity( at the maximum amount of $674 a month) and it mostly all go to savings

I did see that, but why is it kept in cash on not in an investment account?

It's way better to save too much in cash rather than to have spent it

So I'm not saying it's terrible or anything. Only that for a portion of that money, (about half of it) why is it only invested in cash, rather than stocks/bonds/mutual funds/CDs/etc.?

So I was hoping to see what your plan for the money was to let you know if keeping in cash is fine, or if you should look into investing that money.

**ninja_sam** · 01-20-2011, 07:59 AM

It is in cash becuase ifelt it was too unsafe for a kid that your to invest in stocks, and i did not always know about bonds/cd's/mutaul funds

**jpg7n16** · 01-20-2011, 08:06 AM

Originally posted by ninja_sam View Post

And also should i start learning information on stock trends and investments during college studies?

Not so much on 'stock trends' but absolutely on investments.

I'd highly recommend reading this book:
Amazon.com: The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) (9780060555665): Benjamin Graham, Jason Zweig, Warren E. Buffett: Books

I'd also recommend going to your local Half Price Books (or any other used book retailer) and seeing if you can find a used textbook on investments. A few new editions won't change what a bond or stock is, so you can save a lot on textbooks by buying used ones.

Or if you want to take a course on investments offered through your college, that's great too.

I majored in Finance and took several

**ninja_sam** · 01-20-2011, 08:07 AM

And with the knowledge you have now, what would you do in order step by step,from the start of college to retirement financially, if you have to take student loans to pay it all? Friends are also interested with financial.

**jpg7n16** · 01-20-2011, 08:42 AM

Originally posted by ninja_sam View Post

It is in cash becuase ifelt it was too unsafe for a kid that your to invest in stocks, and i did not always know about bonds/cd's/mutaul funds

Ok cool, well then I'd like to temper my suggestion above. In your 401k and Roth IRA, I think you should be about 85% in the Target Date fund and 15% in a good bond fund.

Something like 1 of these: (or 5% in each)
BLV Vanguard Long-Term Bond Index ETF, etf, quote, price, shares - Morningstar
FBIDX Fidelity US Bond Index, mutual funds, quote, price - Morningstar
XLB iShares DEX Long Term Bond Index, etf, quote, price, shares - Morningstar

This will add a bit of security to your retirement portfolio.

I also believe that since you shouldn't have more than 6 months held in cash, I'd invest about 6 months expenses in one of those bond funds held in a regular brokerage account. Preferably the FBIDX or some other intermediate bond fund. This would get you a better return on your money, and also keep the principal available to you (if you need the money, just sell the investment and cash out), and fairly safe (compared to stock investments).

**Joan.of.the.Arch** · 01-20-2011, 08:46 AM

ninja-sam, if your disability payments are from Social Security, you need to read their guidelines about savings, too. I think you are not permitted to have more than $2000 in savings and still receive SS Disability payments. Maybe SS has different stipulations if the money is in a retirement plan, but you should find out. If you are about to end Disability payments in favor earned income then I guess the SS savings limits would not matter.

Financial Advice/Opinions plese