[Rock&Roll Ninja]

Hi, I'm poor

But I'd like to change that.

Can anbody explain how I would go about building a (small) portfolio with a limited initial investment (maybe $500), followed by small monthly amounts (say $100).

I know its not much, but I assume anything is better than nothing, especially after a few years.

 

[Konig]

i will say forget it....

 

[Konig]

i will say forget it....
did u consider joining the army for a few years?
u really save quite an amount after that

 

[Rock&Roll Ninja]

Quote:

Originally Posted by Konig /img/forum/go_quote.gif i will say forget it.... did u consider joining the army for a few years? u really save quite an amount after that

I'd be losing money joing the ARMY. Even if I did, I'd still want to invest those paychecks somewhere.

 

[Konig]

my dad does fireworks business and a being a chinese helps me to get some handsome red packets every year from his partners (google chinese new year to
find out about red packets).

At that time however, I seriously do not have any hobby to start with and I put everything in the bank until i became 14. I started investing after seeing my mum making some money from equity funds and i put everything into aberdeens global tech fund at that time. That purchase was probably my best move so far bcoz of the tech boom 6 months latter. I dumped them after making a 60% profit (could have made 80% but u never know these things).

My next move was buying japanese funds after reading all the hype about japan.
it returned me a 20% profit 2 years latter.

As you can see, i dont diversify (very bad) but when im confident abt something i go for it and the price of funds dont go to zero overnight.

Being in the army also help me save up a sum of $. until i found up abt head-fi and stax and singlepower. that took a large chunk of my savings away.

Right now being in college i dont have much time following financial news and i gave everything to my mum, so she or our private banker manage them for me until i graduate.

 

[ls20]

hey! thats how i started when i was 18! with 500 initial and 100$/month

what you want is a safe, low-risk, low management cost account: an index fund... its a fund that mimics a major US index (S&P 500, in my case)... so one that mimics the economy, in essence.

i went with Transamerica because they fit my requirements--didnt require lots of initial investment. however, theyve since scrapped their index (and i blew the money last year of college...).... though they do have other funds, too

request a prospectus and other literatures on the website or give them a call

 

[will75]

Quote:

Originally Posted by Konig /img/forum/go_quote.gif i will say forget it....

Awful advice.

To the original poster, how old are you???

My anwser is the same regardless but the younger you are the better.

COMPOUNDING INTEREST is the best thing in the world! The problem is nost of us never take advantage when we are young which is when it offers the most advantage.

For example: (google a compound interest calculator to do this yourself with different figures).

If you are 20 now, and you put in your $500 with an extra $100 every month from now on and get 6% interest, you will have over $200,000 in the bank when you turn 60.

Now, if you are 30 and do the same thing, you only get a little over $100,000. Still worth it but not as fun as the 200K.

The key of course is to let the interest compound in there rather than drawing it out. Huge mistake!

If you are 20 and you just put away that money in the bank you would only have $48,500 when you are 60.

This is all based on 6% interest. You can get less if you want to be conservative or a lot more if you are aggressive. A balanced mutual fund has shown to be around 10% over time.


The moral: put money away now you young people!!!

 

[450]

So if I put away 4-5k for 30-40 years I'll have a millions dollars?

 

[JahJahBinks]

It's true but also the younger the poorer you are. It's like audio, the best time you have good hearing is also when you are poorest.

 

[will75]

Quote:

Originally Posted by 450 /img/forum/go_quote.gif So if I put away 4-5k for 30-40 years I'll have a millions dollars?

Let's say 7% interest. Put $5000 away a year and let the interest compound. You will have over a $1,000,000 after 40 years. Now, a million won't be as impressive in 40 years but it's still great. If you can do without that money now, it will more than pay off in the end.

Put that same amount in a checking account and you only have $200,000 after 40 years.

 

[JahJahBinks]

Also don't forget inflation.

 

[Konig]

i didnt quite read the $100/month part.

a lot of insurance companies have this kind of policies so check them out. (remember that u have to fight for rebates. insurance agents have tough competition these days and im surprised a lot of them are willing to break the rule and offer rebates)

 

[Rock&Roll Ninja]

Quote:

Originally Posted by Konig /img/forum/go_quote.gif (remember that u have to fight for rebates. insurance agents have tough competition these days and im surprised a lot of them are willing to break the rule and offer rebates)

I'm going to reinvest any rebates/dividends back into the fund company. I'd like to be able to buy a real nice house by age 40.

In addition to the $100/month, I'm also planning on Christams bonuses, tax returns, and my settlement from my motorcycle accident. So it'll be 100/month minimum after the inital buy-in.

 

[will75]

Quote:

Originally Posted by Rock&Roll Ninja /img/forum/go_quote.gif I'm going to reinvest any rebates/dividends back into the fund company. I'd like to be able to buy a real nice house by age 40.

How old are you now?

Another piece of advice for the 22 year olds. Don't rent! Buy a small house in a decent area instead. Build equity early, make simple repairs, and flip that house every 2-3 years. This allows you to upgrade every time you flip using the profits. You won't pay more and you get a basically free house after a while.

 

[Rock&Roll Ninja]

Quote:

Originally Posted by will75 /img/forum/go_quote.gif How old are you now?

Mid 20's