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 Long Term Investing Advice
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| Author | Topic: Long Term Investing Advice |
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rarefied01 unregistered |
posted 06-26-2000 01:52 PM
Considering your age you should invest aggressively since you will have enough time to recover from any significant market downturn while earning a higher return percentage. |
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rattboy |
posted 03-03-2000 10:18 PM
trentr: I guess we each interpreted runninhorn's comment differently. If it is $4,000 of current taxable income, then you are correct in saying that he will have less than $4,000 to invest. To me, when he (or she) said that he had $4,000 to invest, I assumed that he really had $4,000 ready to be invested, who knows? The bi-partisan Roth-Baucus bill appears to have clear sailing in the Senate (if there is such a thing). The main provisions are to set up "Roth-type" 401Ks and 403Bs and to raise the annual contribution limits on IRAs, 401Ks, 403Bs and SIMPLE plans. The proposal as written would increase the annual maximum contribution on IRAs from $2,000 to $5,000. Of course when IRAs were first created, they had the same $2,000 limit that we have today. Had the limit been indexed with inflation, the limit today would be almost $5,000. So this bill would basically bring us up to date with where we should have been all along (except of course for all of the missed contributions over the years). The proposal would also provide for future increases in the limit to keep up with inflation. All of these changes have the potential to make a great impact on the financial future of Americans, especially young Americans. Let's hope they get it done, and soon! |
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trentr |
posted 03-03-2000 11:16 AM
rattboy, I agree that the roth IRA is better in most cases, but lets say runninhorn made more than $4000 in the past two years and plans to put it away, and that he/she has to pay taxes on it of course. Depending on the tax bracket he/she may only be able to put away a little over $3000 of it into a Roth IRA because of the taxes due on the income. It might be better to put it all in a traditional IRA (tax deductible) and then convert it in a few years when he/she can take the tax hit. In almost all your cases you'd be right. I have a ROTH myself, but i didn't want to make that reccomendation before knowing the full situation. Any more info on the feds increasing the allowable contribution from $2000 a year? I'd jump at that chance if they do! |
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tuhunglo |
posted 03-03-2000 09:59 AM
I am happy to hear someone your age talking about investing for the future. You will be successful in life. I strongly recommend putting money in mutual funds. I just got a tip that Strong Funds recently opened a new internet fund, and a new technology fund. Getting in on the ground floor is a great advantage. They have a 2500.00 min. per fund, but waive it if you have them automatically take so much a month out of your bank account. Ihave invested in mutual funds for about 10 years, and have made alot of money. I wish my children had your good sense. I'm working on them! Michigan Mom |
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rattboy |
posted 03-03-2000 02:00 AM
Oops, I meant to say that you will have deposited $80,000 over the years, not $72,000. That's $4,000 now, and $2,000 a year for the next 38 years. Of course, if you get married, your spouse can also contribute $2,000 per year and then you'll really have it made. |
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rattboy |
posted 03-02-2000 01:52 PM
I'm going to both agree and disagree with trentr. Mutual funds and IRAs I think are both the right idea. However, I would HIGHLY recommend a Roth over a traditional IRA, for someone in your age range. Right now you can deposit $2,000 for 1999 and the other $2,000 for the tax-year 2000. Continue to deposit $2,000 for each tax-year for the next ... let's say 38 years (you'll only be 59.5 years old, and able to start taking withdrawals from your IRA). Let's say that the mutual funds you choose return an average of 12% annually. The long-term stock market average is approx. 11%, so you just barely beat that. You will have put in $72,000 over the years, but your account balance will be over one and one-half million dollars, and it is TOTALLY TAX FREE!! Older people don't get as much benefit from a Roth as younger people do, but this is huge for you. Also, Congress is seriously looking at raising the maximum annual contribution (which they should do), which means that you'll be able to earn much more money over the years. One more note, you wil be able to withdraw the amounts you have contributed (again, no taxes) if you need to pay college expenses for children or to buy a house. There are a few details that I'm leaving out, but you can check them out on your own. The Roth IRA is quite possibly the best thing that the feds have ever given us, you must take advantage of it. |
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trentr |
posted 03-02-2000 09:31 AM
Mutual Funds are a good idea, especially for the long haul. If you are working you should invest in an IRA, roth or normal. You can invest up to $2000, or the amount of income you had during the calendar year. In this case if you made $2000 in 1999 you can invest it up until tax day this year. As far as which Mutual fund to invest in, you'll want to do some research yourself. |
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runninhorn |
posted 03-01-2000 08:27 PM
I am a 21 yr old college student, that would like to start investing my money now, so that when i get older, i will have funds to live nicely. The thing is, i dont know where to start?? I know about the NYSE and stocks, but which ones do i buy for the long haul?? I want something that i can just keep putting money into that will yield a return on down the road. Im not looking for a get rich quick scheme, just something that will have made money over the years. so should i look into Mututal funds?? what are they and how do they work?? Also, i only have 4 grand to invest, that being said, in your opinion, if you were in my shoes, what would you do to invest it?? thanks for everything... |
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