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denmarker

what u do for retirement?

9 posts in this topic

hi guys, been thinking of my own finances.

not very savvy here, so been putting most of my money in the bank. earning pathetic interest rate.

wary of stocks after 2008. of course with hindsight, now i realised it was stupid, should have kept all money in stocks and be happy now in 2017.

so decided to look at some long term investing and see what i can do to plan for my retirement (hey, i cannot be a baby forever right haha)

 

was looking at value investing and dividend stocks investing

http://thenewsavvy.com/invest/equities/dividend-investing-101/

saw this article that gives a simple idea on what is dividend investing.

 

u guys have any experience or ideas? I know AAPL because Apple is everywhere, but i don't know what other stocks are good for dividends. i can only google and read but i have a nasty feeling most guys just want me to sign up newsletter and sell me stuff. lol. any help would be appreciated.

thanks!

8 minutes ago, denmarker said:

hi guys, been thinking of my own finances.

not very savvy here, so been putting most of my money in the bank. earning pathetic interest rate.

wary of stocks after 2008. of course with hindsight, now i realised it was stupid, should have kept all money in stocks and be happy now in 2017.

so decided to look at some long term investing and see what i can do to plan for my retirement (hey, i cannot be a baby forever right haha)

 

was looking at value investing and dividend stocks investing

http://thenewsavvy.com/invest/equities/dividend-investing-101/

saw this article that gives a simple idea on what is dividend investing.

 

u guys have any experience or ideas? I know AAPL because Apple is everywhere, but i don't know what other stocks are good for dividends. i can only google and read but i have a nasty feeling most guys just want me to sign up newsletter and sell me stuff. lol. any help would be appreciated.

thanks!

 

 

beside value investing and dividends investing, what are the other investing styles?

Investing though, not trading nor speculation, i am not good at such stuff, so would not touch penny stocks at all

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An IRA or a Roth IRA might be a good choice if you're looking to put money aside, rather than just simply trading in the stock market. Dividend will still rely on how well the stock market does, so there is a connected risk factor. With (roth) IRAs you just basically rat hole a little bit of money away each year. They're basically the same but there are some minor rule differences on when you can touch the money you've put into the account and if it's tax free when you put it in, or when you take it out. 

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Let me expand a bit on what Wakko had to say.

Okay let's see if I can be of any help. I'm retired with assets that most would consider quite adequate. The usual declaimers – do your own research and your results may very.

Usually when you begin investing it's hard to create a diversified portfolio, so you will need to use mutual funds, but watch out for cost. Vanguard has worked for our family, low transaction costs and low expense ratios on funds. Dividend oriented mutual funds are available, but you likely will do better with individual stocks. Don't look at the divided alone when making a purchase, many stocks have a record of increasing dividends over time. Also high dividend may mean the stock value has dropped and there is danger the dividend will be discontinued (look at the history of Seadrill stock). Trying to time the market as to when to purchase rarely works, so dollar cost average by making purchases in a disciplined manner over time.

Use ROTH IRAs to build assets. As someone who used Traditional IRA thinking I would be in a lower tax situation when I retired that just may not be the case if your investments do well. With the Traditional IRA you will be required to withdraw funds when you are 70 1\2 (Required Minimum Distribution or RMD). Yes it's tax free going in, but taxed as ordinary income coming out, the reverse of the ROTH IRA.

By far the most important thing is to SAVE. The more you can put away early in your life the more will be there when you retire. You don't have to live as a miser, but think about purchases in terms of durability and usefulness. Oh, and buy your diapers by the case – they are cheaper that way.

This is way over simplified

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My recommendation is to save money to a Roth IRA.  Have the money deducted from your pay automatically and sent directly to Vanguard or whatever financial institution you prefer.  Vanguard does have the lowest expense ratios, so that's where my IRA is located.  I'd recommend starting with the S&P 500 Fund as your starting core investment. Once you build up a substantial investment there, you can add another fund to your IRA and have any new money deposited there.

In my experience, picking individual stocks is a losing proposition unless you're willing to do a lot of serious research.  Mutual funds are the better way to go as long as you're careful to pick good funds with low expense ratios and managers with good reputations.

Trying to time the market and investing when you think you're getting a bargain on a stock or a mutual fund is also a losing proposition. You're far better off with dollar cost averaging; investing regularly on a fixed schedule with a set amount of money.

Above all, live within your income and don't build up any long term credit card debt.  Maintain a ready cash reserve in a savings account or money market account for unexpected major expenses like car repairs, house repairs (if you own one), medical deductibles, etc. 

The newsletters are a waste of money.  They will tell you how much their investments make.  What they don't say is that you have to buy ALL the stocks they recommend to get those numbers. If you pick and choose from their list, your actual performance will be wildly different; most often, worse.  

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I had a job with a guaranteed pension.  Been retired 15 years.

The best for retirement is to learn to live within your means.

 

 

 

happiness is wearing cotton diapers

 

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It is proven that to make money on the stock market requires you to be invested long term , the 40 best days on the stock market happened randomly and you profited, whereas those who try and time it and guesstimate have lost money, so just like the lottery you have tk be in it to win it!

Sent from my SM-T810 using Tapatalk

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I had a job with a guaranteed pension - I retired from that 5 years ago and stayed working full-time.  Now that pension goes toward paying off my mortgage as quickly as possible.  I also started putting 10-15% of my pay into IRAs when I was 30.  It was a late start, but built up very quickly.  I've never messed around with stocks, only mutual fund IRAs.  The returns weren't very high, but much better than any bank - I think I averaged 5% per year.

Now my plan is to fully retire, or at least drop down to part time work at 55.

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I made sure all major bills (the house and cars) were paid off before I retired.  I also maxed out contributions to my IRA, 401k, and company employee stock purchase plan.  All totaled, I was saving about 25% of my earnings. 

'When you're first starting out, there is no way (unless you have a large amount of money) to sufficiently diversify when buying individual stocks.  So, mutual funds are the best way to go.  If you listen to John Bogle (the retired head of Vanguard) or Warren Buffett (the head of Berkshire Hathaway), they both recommend investing in index funds like the Vanguard S&P 500 fund.  They have lower expense ratios than managed funds.  In addition, managed funds seldom out perform index funds over the long term.

I'd also recommend planning as if you were going to retire by the time you're 55.  Keep working as long as you can (or want to), but plan for 55.  If you lose your job after turning 50, getting rehired with an equally good paying job is not guaranteed. Age discrimination is illegal, but it happens.  Unless you've kept up on technology and made yourself a valuable asset to your employer, it's frequently more cost effective for the company to hire someone right out of school than to continue paying you the much higher wages you're earning. 

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wow! so many good advice. have a look through all the postings.

will take time to read later today after dinner and google those words that i am not familiar with.

thanks so much!

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