Investment Options for a 20 Year Old
- Thread starter Yaboosh
- Start date
I'd say I have around a few months of experience, but I learned from my parents, and by watching them I learned of their mistakes and learned to seperate to GOOD low priced stocks from the crummy ones. My teachers? My parents, Warren Buffet(read his books, see what he does),...you get the idea. I got around $10,000 in the stocks, and going up every few months 
You only get burned if you have no clue what you are dealing with, and I research everything about the stock as I can so that I know what I'm dealing with.
I don't like blue chips for they are too stable, and in order to make the same amount of money as my lower priced stocks, you would need to put in a whole lot more. With $10,000, I can buy a bit less than 2,000 shares of a $5 stock, and much easier for that company to increase 100%. A blue chip on the other hand, costs maybe $20 or more and rarely makes increases of more than 50%. Also I could only buy a few hundred shares of the blue chip.
Of course, everyone has their investing style, and I'm okay with that
You only get burned if you have no clue what you are dealing with, and I research everything about the stock as I can so that I know what I'm dealing with.I don't like blue chips for they are too stable, and in order to make the same amount of money as my lower priced stocks, you would need to put in a whole lot more. With $10,000, I can buy a bit less than 2,000 shares of a $5 stock, and much easier for that company to increase 100%. A blue chip on the other hand, costs maybe $20 or more and rarely makes increases of more than 50%. Also I could only buy a few hundred shares of the blue chip.
Of course, everyone has their investing style, and I'm okay with that
Like Sarge and the L-bot said, a Roth IRA is a pretty good start. Property is always a good bet, as Will Rogers said, "They ain't makin' any more of it."
However, seeing as how you are so young (heh), you may want to consider higher risk investment options. Things like small-cap stocks, foreign stocks, bonds, etc. Since you'll be saving for the next 40+ years, you can afford to take a risk. Diversify.
Please, please, please, speak with a competent financial advisor. We here in the OTF may be wicked smrt, but nothing beats a dude(tte) in a tie. Don't do it over the phone or 'net, go and meet the person. That way, you can see them and get a feel for things. Never be afraid to tell these cats to jump in a lake, it's your money, they'll get over it.
However, seeing as how you are so young (heh), you may want to consider higher risk investment options. Things like small-cap stocks, foreign stocks, bonds, etc. Since you'll be saving for the next 40+ years, you can afford to take a risk. Diversify.
Please, please, please, speak with a competent financial advisor. We here in the OTF may be wicked smrt, but nothing beats a dude(tte) in a tie. Don't do it over the phone or 'net, go and meet the person. That way, you can see them and get a feel for things. Never be afraid to tell these cats to jump in a lake, it's your money, they'll get over it.
Don't forget to pay attention to the Sunday investment shows.
And to let you know, Cascade Lighting has recently come out with a self-enclosed fire-rated recessed can light. It's the only one on the market. They're going to make a killing selling these. I don't know if they're a publically traded company but they're worth looking into.
And to let you know, Cascade Lighting has recently come out with a self-enclosed fire-rated recessed can light. It's the only one on the market. They're going to make a killing selling these. I don't know if they're a publically traded company but they're worth looking into.
Yaboosh
Diabloii.Net Member
maccool said:
Haha, no offense, but yes, I do indeed take everything here as merely a way to steer me towards focusing more towards a way of thinking. I intend on looking for a financial advisor soon.
Is there a particular firm that has a good reputation? Morgan Stanley is the only one I know off the top of my head.
Sergeant
Diabloii.Net Member
Boosh, my financial planner said he would talk to you make some recommendations and may be able to work with you.Yaboosh said:
Since it's a military only firm, you would only be able to be a client if you have current or former military in your family. Otherwise, it might be a good way to get some solid info and a good recommendation on a financial planning firm to go with. I sent you a PM if you're interested.
LunarSolaris
Diabloii.Net Member
As I said in my first post (and very much agree with Mac) - a financial advisor will give you specific advice to help you... and with professional expertise that probably far eclipses any advice offered here.
National names like Morgan Stanley are good, but don't underestimate what a local advisor can do for you as well. Just keep your mind open to a lot of paths... and It already sounds like you're doing your homework.
All I can say again Yaboosh, is that I'm very envious of your resolve... one that I wish that I had when I was 20 myself. I made a lot of very poor financial choices in my life up until the last 2 years. Gratefully I'm young enough that investing now will make a good difference, but not nearly as much as it will make with you getting started at your age.
EDIT: Looks as if Sarge has some excellent resources and advice for you as well. :thumbsup:
National names like Morgan Stanley are good, but don't underestimate what a local advisor can do for you as well. Just keep your mind open to a lot of paths... and It already sounds like you're doing your homework.
All I can say again Yaboosh, is that I'm very envious of your resolve... one that I wish that I had when I was 20 myself. I made a lot of very poor financial choices in my life up until the last 2 years. Gratefully I'm young enough that investing now will make a good difference, but not nearly as much as it will make with you getting started at your age.
EDIT: Looks as if Sarge has some excellent resources and advice for you as well. :thumbsup:
MithrandirX
Diabloii.Net Member
At your age, I think you can do better than a roth or a traditional IRA. IMO, just a plain old online brokerage account is the way to go. I use Fidelity. If you are a conservative investor (like me) stick to mutal funds, blue chip stocks and treasury bills. I am a little older than you, and I also have some savings bonds.
The thing is, that you can reasonably expect to be making some major purchases in the 10-year timeframe (house, car, etc), and if the Roth is your ONLY savings, then you will get hit with tax when you take it out. Also consider, that it would be better to pay tax on that money NOW than later on when you are making more money.
Just remember that diversity is the key. large-cap stocks, with a few bonds thrown in is a nice conservative formula for growth. Also, I would avoid becoming an active trader -- pick your stocks for the long haul. Leave the day-trading to the professionals who, despite their experience, consistently fail to out perform small investors over time. There are plenty of good sites on the internet about small investors. Educate yourself. Decide your tolerance for risk (mine is pretty low for a young guy), and invest accordingly.
Mith
PS. Some stocks I own: MSFT, INTC, HD, GE, SO, WM, BBY, CSCO, SYY, ummm... BUD, MRK, XOM, PFI, NOC, IBM. A little tech-heavy, as you can see, but I counterbalance it with a huge chunk of SPY (S&P500) that compromises about 30% of my net investment. Bonds are only about 11%.
GL.
The thing is, that you can reasonably expect to be making some major purchases in the 10-year timeframe (house, car, etc), and if the Roth is your ONLY savings, then you will get hit with tax when you take it out. Also consider, that it would be better to pay tax on that money NOW than later on when you are making more money.
Just remember that diversity is the key. large-cap stocks, with a few bonds thrown in is a nice conservative formula for growth. Also, I would avoid becoming an active trader -- pick your stocks for the long haul. Leave the day-trading to the professionals who, despite their experience, consistently fail to out perform small investors over time. There are plenty of good sites on the internet about small investors. Educate yourself. Decide your tolerance for risk (mine is pretty low for a young guy), and invest accordingly.
Mith
PS. Some stocks I own: MSFT, INTC, HD, GE, SO, WM, BBY, CSCO, SYY, ummm... BUD, MRK, XOM, PFI, NOC, IBM. A little tech-heavy, as you can see, but I counterbalance it with a huge chunk of SPY (S&P500) that compromises about 30% of my net investment. Bonds are only about 11%.
GL.
Sergeant
Diabloii.Net Member
Generally, I think that's the advice he's been getting...MithrandirX said:
Go a little higher risk
Diversify (mutual funds, money market, traditional savings, CD, bonds, etc)
Since he's young enough to take full advantage of these opportunities, he's got all kinds of chances to really make his money work for him.
I reckon you're right, 'Boosh. The Roth is good for those of us who make under 110K per year (160K?) and there are some exceptions. But, what is the R in the IRA? Yup, the IRA is for your later years. Don't monkey with it.
You've got mad time, look into the stock market. Like Mith said, plan long haul. Ask yourself, "what will people need 20, 30, 40 years from now?" Needless to say, I'm a bit weighted into the techs, pharms (heavy), and defense. Plus, you can never go wrong with the sinners: booze, smokes and gambling are always good bets (-10 on the pun). And that's just stocks. You got bonds of all flavors, currency spec, and the foreign market to play with. This is a great time to invest, the market is still bear and there are deals to be had.
Remember this: stocks tend to go up, moreso if it's ginormous company. Putting money in now means that you'll laugh at all the schlubs who banked on social security. It's like the story of the grasshopper and the ant, except bugs are icky.
And I want 10% for providing 1339 advice. I'm willing to settle for a case of beer
You've got mad time, look into the stock market. Like Mith said, plan long haul. Ask yourself, "what will people need 20, 30, 40 years from now?" Needless to say, I'm a bit weighted into the techs, pharms (heavy), and defense. Plus, you can never go wrong with the sinners: booze, smokes and gambling are always good bets (-10 on the pun). And that's just stocks. You got bonds of all flavors, currency spec, and the foreign market to play with. This is a great time to invest, the market is still bear and there are deals to be had.
Remember this: stocks tend to go up, moreso if it's ginormous company. Putting money in now means that you'll laugh at all the schlubs who banked on social security. It's like the story of the grasshopper and the ant, except bugs are icky.
And I want 10% for providing 1339 advice. I'm willing to settle for a case of beer
Sergeant
Diabloii.Net Member
Wouldn't that be 1337 advice? Or was yours so great it was 1337 +2.maccool said:And I want 10% for providing 1339 advice. I'm willing to settle for a case of beer
But yeah Boosh, if you go IRA it's best to leave it alone. If you need to buy something, that's what your savings and money market type accounts are for. That is why you should do all three, long term (IRA) that is left alone... mid term (money market, CD's, bonds) that are used for your education and home type purchases and short term (savings) that is used for your quick purchases and emergencies.
Boosh, you have lots of time and opportunity, don't get so wrapped up in starting that you never do.