want a place to start learning the basics of investing for retirement and for college ?? How & where do i start?? Are 529′s better or the MET’s better??? Please help??
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Thinking of investing your savings?
While increasing your savings is good, multiplying your money through smart investments feels great - there are lots of opportunities out there and you can be successful if you're arming yourself with the right information.
Where to start?
If you're going to try your luck on the stock market or trading options, first start by learning the basics and delay as much as possible buying real positions. One way of getting hands-on experience with the markets is through online trading - either forex or binary options are good learning grounds and most online brokers offer trial accounts free of charge (if you're wondering what are binary options, 24option.com has very good resources on it, besides offering a free practice account and a wealth of information about binary trading in general). Final warning for the very eager: binary options are exotic financial instruments; real trading involves substantial risk of monetary loss.
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For retirement, you should invest in stocks, bonds, and money market funds. You want to buy a diversified portfolio of stocks, as individual stocks are too risky. For most folks this means buying mutual funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low cost funds. If you are like most people you will invest part of your money aggressively in stock funds, and part conservatively in money market funds and bond funds. Vanguard.com has an on-line questionnaire which will give you an idea how aggressive you want to be.
If your company offers a 401K plan at work, try to invest the most you can. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea.
I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, I would suggest putting ~70-80% of your money in the Vanguard Total Stock Market Index Fund. and ~20-30% in a foreign stock index fund. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion
Buying a house instead of renting will save you a lot of money in the long run. You don’t have to pay rent and you build equity in your house instead. Buying rental property can also be a good investment. However, being a landlord can be hard work, and many people are not good at it. If you don’t know how to handle deadbeat renters, you can have trouble.
If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments.
Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.
Sources: http://www.vanguard.com/VGApp/hnw/planni… http://www.dallasnews.com/sharedcontent/… http://www.fool.com/school.htm http://sec.gov/investor/pubs/assetalloca… https://flagship.vanguard.com/VGApp/hnw/…
If you are saving for college expenses, you should take advantage of federal tax breaks aimed at families saving and paying for college. These include the following:
Qualified Tuition Programs (529 plans)—Earnings grow tax-deferred and distributions are tax-free when used for qualified post-secondary education costs.
Coverdell Education Savings Accounts— Earnings grow tax-deferred and distributions are tax-free when used for qualified post-secondary education costs. May also be withdrawn tax-free for primary and secondary school expenses.
You can read about these at http://www.savingforcollege.com/
One rule that I generally never break is to tout one particular financial instrument as being good for everyone. The exception is college planning. There is no question; go with the 529. Your money grows tax deferred and is withdrawn tax free as long as it is used for education. Most offer tailored portfolios that mirror your investment style and risk tolerance; and even offer age-based portfolios that automatically allocate more conservatively as the child gets older and closer to needing the funds.
You can contribute up to $12,000 per year, or a lump sum of up to $60,000 once for the first five years.
U should look it up at your local library or bookstore
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