Okay, need someone with some basic investing knowledge....

Defying · Apr 18, 2013

Rather embarrassing, but I haven't started saving for retirement yet.... I just discovered that my Grandma who passed left me a 10k from her life insurance. It's apparently been sitting in a savings account for 9 years! ^<<^ Basically, doing nothing.

I have no IRA/Roths, No mutual funds nothing.

I don't want to touch it until retirement. What do I do with it/ where do I go to do this ect?

No, not a $ of it will be used for gambling. Sorry guys.

shdw01 · Apr 18, 2013

how old are you?

max out a roth for starters

how you invest is up to you. Schwab can be used to self-direct.....advisors seem to be hated on these forums.

Although I think with $10k, you can invest in a photobooth with chop and you will make your money back in no time

Jstack34 · Apr 18, 2013

Good question, I just started work in November and have just under 10k saved up, would like to invest but seems like I need more than that and a lot of time. Or does anyone have a stock tip? This guy's tax return I saw had 7 mil in capital gains. He bought Quallcom in 1998 and just sold it in 2012.

Defying · Apr 18, 2013

Jstack34 said:
Good question, I just started work in November and have just under 10k saved up, would like to invest but seems like I need more than that and a lot of time. Or does anyone have a stock tip? This guy's tax return I saw had 7 mil in capital gains. He bought Quallcom in 1998 and just sold it in 2012.

congrats on saving 10k in less than 6 months, thats impressive

studmlb55 · Apr 18, 2013

Defying said:
congrats on saving 10k in less than 6 months, thats impressive

Yea really @)

dav168 · Apr 18, 2013

Shdw01 asks a good initial question,"how old are you" ? I'd also agree with him to max out a roth if possible. As for specific investments it depends on lots of factors, age ,time period you want it invested for, level of risk you are comfortable with, etc. Assuming it will be a long term investment it should probably be invested in a growth stock etf, mutual fund, or an individual stock. You could probably start by opening an account with one of the well known investment companies(Vanguard,T Rowe Price,Fidelity, Schwab). They all have basically the same type of investments and are easily researchable online.I'd be careful about "stock tips" . Finding a company,product or industry that you know something about may be a good starting point. Best of luck.

Defying · Apr 18, 2013

28

So I just go into any of this investment companies and say I want a Roth? Simple as that? Is there more choices to be made from that point??

I always knew from Clark Howard that Roth > IRA but that's about all I know. I know these are dumb questions, i just have no idea. this is the ish we should of learned in college. thank you Old Dominion for this business degree which taught me nothing.

CowboyT · Apr 18, 2013

Defying said:
28

So I just go into any of this investment companies and say I want a Roth? Simple as that? Is there more choices to be made from that point??

I always knew from Clark Howard that Roth > IRA but that's about all I know. I know these are dumb questions, i just have no idea. this is the ish we should of learned in college. thank you Old Dominion for this business degree which taught me nothing.

Most of the larger firms have retirement date portfolios. They'll determine your risk allowance based on your years to retirement and adjust as you get closer. Better choice than do it yourself portfolios, IMO.

Roth IRAs are different than traditional just in the taxes. You're either taxed going in or taxed going out. If you're taxed going in, the % taxed could've been making gains. To keep it simple though, unless you're 55+ and really worried about the market, go Roth.

milwaukeemike · Apr 18, 2013

I am a cpa, and i can tell you that for 95% of people, a 401k or traditional ira is better than a roth. That's because when you retire, you probably won't be paying much if anything in the way of income taxes. So if you're going to stick money in an account for retirement TAKE THE TAX DEDUCTION.

Max into either a traditional ira or roth ira is going to be $5000/year unless you're 50 or over (then it's $6000).

i wouldn't do either unless you have a safety net, leaving the $10k in a checking account or under the mattress for a rainy day is a better idea if that is all of your savings.

BAGIANT · Apr 18, 2013

I blew a $350,000 inheritance in 3 years.

milwaukeemike · Apr 18, 2013

Some other risks to roth iras that nobody seems to discuss, but are entirely possible
1) roth iras could become taxed at some point
2) traditional ira distributions could become tax-free, either permanently or as a one-time deal to boost the economy
3) the u.s. could switch to a national sales tax, vat, or other structure that makes you look silly for giving up the tax write-off
4) see above, the vast majority of retirees pay no income taxes, especially on the state level. So for example you forego a 25% federal deduction and 8% wisconsin deduction only to realize that your state doesn't tax social security and other retirement benefits, so you aren't going to pay tax on the withdrawals whether they are traditional or roth.

just because the investment community tells you that a roth is better doesn't mean they're right for most people

PatsFan1283 · Apr 18, 2013

CowboyT said:
Most of the larger firms have retirement date portfolios. They'll determine your risk allowance based on your years to retirement and adjust as you get closer. Better choice than do it yourself portfolios, IMO.

Roth IRAs are different than traditional just in the taxes. You're either taxed going in or taxed going out. If you're taxed going in, the % taxed could've been making gains. To keep it simple though, unless you're 55+ and really worried about the market, go Roth.

Don't like those target-funds honestly. I do think they have some value for people looking to really simplify the process but if you actually look into the fund and see how it is allocated in terms of Stocks/Bonds it is really conservative. Not saying people shouldn't be conservative but if you've got 20-30 years until you are going to get the money I'd personally just go overweight equities.

I posted a few good dividend mutual funds I like in the thread the other day if anyone wants to check it out.

CowboyT · Apr 18, 2013

milwaukee mike said:
I am a cpa, and i can tell you that for 95% of people, a 401k or traditional ira is better than a roth. That's because when you retire, you probably won't be paying much if anything in the way of income taxes. So if you're going to stick money in an account for retirement TAKE THE TAX DEDUCTION.

Max into either a traditional ira or roth ira is going to be $5000/year unless you're 50 or over (then it's $6000).

i wouldn't do either unless you have a safety net, leaving the $10k in a checking account or under the mattress for a rainy day is a better idea if that is all of your savings.

^^^^ sharper than me. My last sentence should've said traditional for the reasons stated in this first paragraph.

taylor13 · Apr 18, 2013

BAGIANT said:
I blew a $350,000 inheritance in 3 years.

Did you pay anything off or did you seriously screw off 350,000 bucks

CowboyT · Apr 18, 2013

PatsFan1283 said:
Don't like those target-funds honestly. I do think they have some value for people looking to really simplify the process but if you actually look into the fund and see how it is allocated in terms of Stocks/Bonds it is really conservative. Not saying people shouldn't be conservative but if you've got 20-30 years until you are going to get the money I'd personally just go overweight equities.

I posted a few good dividend mutual funds I like in the thread the other day if anyone wants to check it out.

Word. Just trying to cater to the un-involved I suppose. Equities are great until you're 50 and assume retirement in 5 years and also assume a gain of 20%+ (late 1990s) and then the shit hits the fan. Most of the target funds at least buffer out a little risk.

PatsFan1283 · Apr 18, 2013

taylor13 said:
Did you pay anything off or did you seriously screw off 350,000 bucks

He said blew so I'm gonna guess thats what he meant.

Hopefully had a good time!

mnmike · Apr 18, 2013

Assuming you have a job, I agree the thing to do is to open a roth IRA and deposit the money into it, it will take 3 years at least to get all the money into it, open your roth at a respected low fee mutual fund co such as vanguard or t-rowe price, pick either an index fund(stocks) or another growth fund and leave it there, leave it alone through good and bad, just watch it grow.

Okay, need someone with some basic investing knowledge....

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