[oicdn]

Ahh...so Vangaurd DOES have different entry points. But like you said, the star fund is a bit conservative. I want to lean more on the aggressive side, while still staying conservative for market and economy changes, where I'm not COMPLETELY stressing market fluctuations...I'm not THAT conservative, and I feel if you're gonna go, you mineas well give it a good go.

Yeah, I knew it was a mathematics trick, just like the rule of 144, etc, but it was a good basis to go by, atleast, it's what I was introduced to and was fairly simple to do in my head for SIMPLE computations. Obviously the compounded intrest makes thinks all whacked out, but it's what I was using a basis on.

The 529 plan...I just looked that up and it's a good tax break...but Florida doesn't have a State Tax....so I don't reap as many of the bennies as most other states residents do

Hmm...good options though. I'm hoping (that's all you can do right) that my kid gets a scholarship like I did. The difference between me and my kid is, he's going to take it, and not join the military instead like me, lol.

 

[fordgtlover]

Quote:

Originally Posted by oicdn /img/forum/go_quote.gif ... Yeah, I knew it was a mathematics trick, just like the rule of 144, etc, but it was a good basis to go by, atleast, it's what I was introduced to and was fairly simple to do in my head for SIMPLE computations. Obviously the compounded intrest makes thinks all whacked out, but it's what I was using a basis on. ...

The previous poster told you what the rule of 72 is for. The rule assumes two things: a fixed interest rate, and a fixed principal amount. It works on compound interest.

I have never seen it applied (any input welcome here) where you have an ongoing investment regime. You'd be better of using a compund interest calculator.

 

[oicdn]

Wierd, wonder why they make it like that compound interest calculator then...meh, in anycase, that one you showed was better than the ones I found as it give you more options for compounding monthy, weekly, bi-weekly, etc.

Once it reaches a certain point, you can essentially live off the interest, and still dump money into it with the interest you're making...

 

[Stephonovich]

I'm going to be coming into a decent sum of money soon. (Reenlistment bonus; about $22K up front after taxes, and the remaining $22K spread evenly out over the next 6 years)

Now, about $8-10K of that is going into a car restoration for me. 1972/3 Datsun 240Z with an LS1/T56 swap. Something I've wanted for a long time, and has been settled with the missus. So subtracting that, I'll have about $12K left over.

My initial thought is that I might want to buy a house in a year or so, after the market has maybe settled down a little. Not so sure about that anymore. The economy seems shaky at best, and the sub-prime foreclosurers haven't seem to hit CT yet. I'm not sure if people here are wealthier/not stupid, or it's just more delayed. In any case, I really don't want to lock myself into a situation that rocky.

So, my other thought was to fully fund a Roth IRA for myself and my wife. In '08 $6K is the max, so that'd do it. Every year thereafter, we could give them a boost with the remainder.

My wife has about $4K in stocks (Duke and Spectra energy) that she was given by her grandmother. Her grandmother, who with her late husband held large numbers of Duke and Spectra, thinks we should sell the Duke (we were going to re-invest it in VFINX, Vanguard's S&P 500-esque Index Fund) and keep the Spectra. Now, Spectra is entirely natural gas, from what I can see, whereas Duke is more diversified. I may be a bit biased, being a nuclear operator, but I like the future of nuclear power. Quite a bit. So in my mind, the Duke would be better to keep. Any thoughts on this?

Also, what about short-term investments? Are they really just an educated crapshoot, or can you actually make decent returns on a regular basis?

EDIT: Current financial status is good. No credit card debt, two car loans (~$400/month combined), with one of them to be sold soon, and the other to be paid off in a year or so. Have about $1000 in savings, and would like to get that up to about $5000. So some of the money might also go towards that goal.

 

[1911]

Quote:

Originally Posted by Stephonovich /img/forum/go_quote.gif I'm going to be coming into a decent sum of money soon. (Reenlistment bonus; about $22K up front after taxes, and the remaining $22K spread evenly out over the next 6 years) Now, about $8-10K of that is going into a car restoration for me. 1972/3 Datsun 240Z with an LS1/T56 swap. Something I've wanted for a long time, and has been settled with the missus. So subtracting that, I'll have about $12K left over. My initial thought is that I might want to buy a house in a year or so, after the market has maybe settled down a little. Not so sure about that anymore. The economy seems shaky at best, and the sub-prime foreclosurers haven't seem to hit CT yet. I'm not sure if people here are wealthier/not stupid, or it's just more delayed. In any case, I really don't want to lock myself into a situation that rocky. So, my other thought was to fully fund a Roth IRA for myself and my wife. In '08 $6K is the max, so that'd do it. Every year thereafter, we could give them a boost with the remainder. My wife has about $4K in stocks (Duke and Spectra energy) that she was given by her grandmother. Her grandmother, who with her late husband held large numbers of Duke and Spectra, thinks we should sell the Duke (we were going to re-invest it in VFINX, Vanguard's S&P 500-esque Index Fund) and keep the Spectra. Now, Spectra is entirely natural gas, from what I can see, whereas Duke is more diversified. I may be a bit biased, being a nuclear operator, but I like the future of nuclear power. Quite a bit. So in my mind, the Duke would be better to keep. Any thoughts on this? Also, what about short-term investments? Are they really just an educated crapshoot, or can you actually make decent returns on a regular basis? EDIT: Current financial status is good. No credit card debt, two car loans (~$400/month combined), with one of them to be sold soon, and the other to be paid off in a year or so. Have about $1000 in savings, and would like to get that up to about $5000. So some of the money might also go towards that goal.

imho,
i would fund the roth's as you mentioned. since you just missed the 2007 cutoff i would fund 2008. since your investments are entirely in 2 stocks i actually would sell both and buy a diverisified mutual fund to mitigate the risk. you never know when a stock is gonna get hit. you have my gratitude for serving our country and it pains me to say this..but...you really cant afford to sink 8-10k into a car restoration. you have 2 cars now. honestly you would be better off investing that into fully funding your 2009 roth. but hey no one knows what life is and that is your choice..

 

[funniecow]

Roth IRA, watch Suze Orman on CNBC.

If I were you, I'd stop buying headphones and things of entertainment for a while.

Remember entertainment is the final tier in life's pyramid. You don't essentially need it, it's just nice to have it.

edit: please don't kill me for saying this.

 

[rgs9200m]

These are my favorite funds. Open an account with each of these fund companies and put $2500 in each of the funds shown (the minimum initial investment) as soon as you can:
Fairhome fund (FAIRX),
Dodge and Cox Balanced fund (DODBX),
Dodge and Cox International fund (DODFX),
Janus Balanced fund (JABAX),
Fidelity Balanced fund(FBALX).
Keep adding to them each time you get money. They are all a nice balance of return, moderate volatility, and expenses
(and no loads on any).
Since they are balanced, you wont get
spooked when the market swoons.
Try to use Roth IRAs for this if you can,
or deductible IRAs if you are eligible.
(Check your eligiblity on the web at Morningstar, Fidelity, Vanguard or a million other sites.)
The market is kind of low now so it's a great time to build money.
Avoid financial advisors and do it yourself.
There is no reason to pay them 1-3% a year and pay commissions/loads for useless handholding.
I went from almost nothing to 7 figures in
15 years in my IRAs and 401K and now I can afford R10s and a B52.
I am happy to help a fellow head-fi'er.
Good luck!

 

[frozenice]

Here is a chart comparing the differences between a resource fund from Canada and U.S. Treasury Bills. Just in case you are wondering why Canadians have been buying your headphones and stuff.

 

[frozenice]

Here is another chart this time comparing precious metals to the S&P 500 - which pony would you rather be riding.

 

[Roam]

Quote:

Originally Posted by Stephonovich /img/forum/go_quote.gif My initial thought is that I might want to buy a house in a year or so, after the market has maybe settled down a little. Not so sure about that anymore. The economy seems shaky at best, and the sub-prime foreclosurers haven't seem to hit CT yet. I'm not sure if people here are wealthier/not stupid, or it's just more delayed. In any case, I really don't want to lock myself into a situation that rocky.

It's delayed a bit since CT didn't have as much of a housing bubble as some other areas, plus it's a wealthy old money state. However, keep in mind that banks have drastically tightened up their lending since the start of the subprime and Alt-A mess, the exotic interest only ARM's and other such mortgages are gone, we are now back to the historic 10, 15, and 30 year fixed mortgage with 20% down and 35%-40% debt to income ratio. In other words, depending on what the interest rate is, if the price of the home is worth more than 3.5 times or so of your household income you can't afford it. Wait for prices to fall to around that level before buying. If you buy earlier you're just blowing your money since if any similar homes in a 1-2 mile radius default & foreclose the banks will dump them back on the market at 25-50% off, and that will instantly revalue every similar home in the area to the bank auction price. In which case you've just lost all the equity in your home and your own mortgage is now upside-down, you now owe more, far more than your home is worth.

Quote:

My wife has about $4K in stocks (Duke and Spectra energy) that she was given by her grandmother. Her grandmother, who with her late husband held large numbers of Duke and Spectra, thinks we should sell the Duke (we were going to re-invest it in VFINX, Vanguard's S&P 500-esque Index Fund) and keep the Spectra. Now, Spectra is entirely natural gas, from what I can see, whereas Duke is more diversified. I may be a bit biased, being a nuclear operator, but I like the future of nuclear power. Quite a bit. So in my mind, the Duke would be better to keep. Any thoughts on this?

The future of nuclear power is still up in the air at the moment, I believe new site permits have been issued but construction, if any, is still uncertain and well off in the future. Natural gas will be quite profitable in the near future for the same reason oil is today; it's a finite resource which we're burning up and there's no real substitutes on the horizon. Furthermore, an increasing percentage of our generating stations now use natural gas, consumption is going up and will soon outstrip supply, I don't think I have to tell you what that's going to do to the price.

As for index funds, yeah, good luck. Look at the S&P 500, DOW, Russell, TSX, and every other market index, the PE ratios are absurd and unsustainable, many companies are moving against the fundamentals (ie. XYZ inc. misses earnings estimate, loses $10 billion in a quarter, lays off half its workers, and somehow its shares go up 30%), and they're getting hit with bad debt all over the place. This cannot continue, eventually the market will come to its senses and crash every single index through the floor. When the Bonds market completely locks up and suffers a dislocution, that's the panic signal for the markets to crash. The bonds market is in the process of locking up as we speak.

Quote:

Also, what about short-term investments? Are they really just an educated crapshoot, or can you actually make decent returns on a regular basis?

If you really know what you're doing and you have enough money & time to play the market, then you can make a decent return. If not, it's a very quick way to go broke given the volatility of today's markets.

 

[dbfreak]

I got in early with gold and Euros. I'll be dumping the Euros soon. This summer, you will see the Euro drop.

 

[classicalguy]

It's amazing how the conventional wisdom changes. When real estate was hot, houses were the best thing in the world to buy at any price. Now, the conventional wisdom is that houses just go down in value. No one can predict when markets are going to turn around, but buying a house that you can afford is a good idea when sentiment is so negative. You can get a good price, have a nice place to live in and improve, get wonderful tax advantages, and build equity when prices recover. It's a long term investment. Much smarter investment to buy a house than dumping half your wealth into a car, IMO.

Suze Orman. Urghh. I can't stand her. She's not very knowledgeable either. I like Andrew Tobias's book "the only investment guide you'll ever need" quite a bit for beginners. He does a good job of explaining the philosophy of saving and investing in a simple way.

I would characterize myself as a contrarian. I buy when things are out of favor and oversold and wait until rationality returns. Think long term and look for real value.

 

[riceboy]

Quote:

Originally Posted by dbfreak /img/forum/go_quote.gif I got in early with gold and Euros. I'll be dumping the Euros soon. This summer, you will see the Euro drop.

Good move on the Euros and Gold. I know a few that went that direction and they are quite happy with the results.

 

[Stephonovich]

I would feel better about selling the stocks as well, but there is somewhat of a sentimental value attached to them - my wife's grandmother gave them to her, and would probably be a little miffed if we sold them. They've done quite well for her and her husband over the past years.

As to the car, it probably is stupid, but not one of the worst things one could do. At least I'm not buying a brand spanking new car that depreciates by 30+% as soon as you drive it away. And I won't have any extra car payments.

I'm still unsure about natural gas. I've heard rumblings about it, but not enough to convince me it'll take off. Yes, Honda has the Civic GX, but there doesn't seem to be a ton of demand for it. There's far more coal power plans than NG, and more electric, fuel oil, or propane than NG heating.

As to houses, I'm thinking more and more I probably can't afford/shouldn't risk buying a house right now. May move into government housing when my lease is up, though. They take all your BAH (housing allowance - right now, mine's about $1350/month, tax free), but give you a brand new house, usually 3 Bed/2.5 Bath, all utilities included. Not a shabby deal.

I would like to save some money for a house in the future, though. If I were to fully fund said IRAs, I wouldn't have much left over for the house. I guess I could take every annuity I get and dump that into something. What's a decent yield fund for something in a timeline of about 6 years?

 

[Suntory_Times]

Quote:

Originally Posted by oicdn /img/forum/go_quote.gif I have about $3K I want to invest for the future, on top of monthly payments recurring monthly. I've read that dropping $300-400 a month into a Mutual fund through Vangaurd, I can be a millionaire by the time I'm 50 and retire. I don't care about being a millionaire(I think if you dump that amount of money into anything, you'll be fairly well off in that time frame regardless, I think that's just a glamorous way of putting it, lol), I just want to invest some money for both my future and so my kid(s) will have a better life than I, and obviously, so I can fully RETIRE by 50. My friend and his dad has a bunch of money tied into Dow and Nasdaq ( I can't remember what, but I know it's spread out thin, so it's minimal loss, not just a crapshoot into ONE company), and while we were eating lunch, he was telling me with every 50 points, he averages around $3-6K. He told me when he was younger he wish he woulda known so he could retire. he said because the intrest is compounding intrest, it makes money on top of money, and with continual deposits, it just increases exponentially. So what do you guys recommend? I'm wanting to get a feel of more information on what the general population does, but the amount of info on investments is just overwhelming, and I'de rather not go to a broker and have them tell me where I should go, I'de like to be somewhat familiar or educated on it all...

Well no matter what anyone says, if you're asking here, you're not going to beat the market. You're only be able to at best get what anyone else can in what are considered 'risk free investements'. Plus if I knew the answer to this (remember that no one does), I sure as hell wouldn't be telling you. Please don't take offense, it's just the way of the world. But 3k isn't much in terms of investements, I would look into property trusts though. There reasonably low risk. Don't be folled by people claiming to give you 16% interest, if it's that high you're risk is massive, and you're likely not only to not get the interest, but to not get back any of your money whatsoever.

Hope that helped a bit.

In the meantime just lie back and listen to the beatifull music streaming through your music set-up.

[edit] I might add compund interest is not money on money, rather it's interest on the original amount plus on the interest itself. Just because it's compound though doesn't mean it's better. Make sure you do the math and figure out which one is best for you.