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I'm making this thread because I hear many people complain about not having enough money. For example, at work, almost every co-worker shows me their frustration that the money the company pays them is not enough, like if getting a raise would make them rich.
Since my idea of investing is based on property and stocks, I'd like to hear more ideas and different ways to invest. What are your ideas/strategies for becoming rich or how will you invest your money? Any other contribution is welcome as well, I’d just like this thread to be a discussion about money.
Edit: Since most people already seem to know about investments I took away the intoduction.
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When I turned 18 I started an IRA. Each year i have invested $1k into it, which usually gets me a few hundred back on my tax return. It's not a lot but with compounding interest over the course of 30yrs, i might have a nice nest egg to look forward to.
I think a good rule to follow when investing, is to not keep all your eggs in one basket. Diversify.
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But what small-scale investments are they for those who can't put more than 3000€ on the table? : )
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"Don't give your money for others to invest for you." You might want some clarification on this, since 401k plans, hedge funds, and banks do just that. Unless you're saying not to invest in those?
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@serpent- I'm not saying not to invest in those, I meant people who offer you 25% interest a month if you wire your money to xyz corporation, things that seem to good to be true.
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If you're under $10,000 just buy some mutual funds, you can't be cost effective without a decent amount of money. Those can still return good amounts, then later on do more with it.
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United States24342 Posts
Your 'buy a house and rent it out' example seems a little out of place.
First of all you didn't mention property taxes which would make it less favorable than your example sounds (not that it's a deal breaker).
Second of all, how can you, in your lower 20s, get a mortgage on a house, pay it (plus taxes), and also afford your own living expenses? Maybe if you lived in you parents' house and they cosigned?
There is also work/aggravation associated with being the landlord... so I wouldn't say you 'did nothing to acquire it'.
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Korea (South)11558 Posts
A very simple tool to gauge to see if something is worth it, is to figure out the time value of money (i.e. present value / future value of the dollar, then determine the opportunity cost of each option you are deciding on, note this is extremely elementary and basic, as there are many other variables, but it should get you on the right path).
Also, http://www.wallstreetoasis.com/ is the best site for learning about trading and investing in my opinion.
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I happen to manage an investment fund which gains 105% every year (500% return during the GFC), pm me your account number and password if you want to be a part of my loss-proof fund!
+ Show Spoiler +If you think that was forreal you should just invest in a pension fund.
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It was an example for concept purposes. I know the total interest you pay on a mortgage is going to be a large sum, that you have to pay property taxes at the end of the year, and other costs that are associated with owning a home. I labeled the 6 steps "introduction to investing." That part was directed at people who don't know much about investing.
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Might want to narrow this topic a little bit, on the one hand you're talking about stocks and small investments, but on the other hand you're talking about huge capital investments and project valuation.
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I suggest anyone seriously interested in investing read this book.
It's kind of technical but it's worth the effort if you're going to be investing tens of thousands of dollars over your life.
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With investing you need monney to make monney Lots of monney actually if you want a substantial return. If you are a top notch investor you can maybe make 15% on a year basis over the long term though 10% would already be realy good, Odds are though that we are not top notch stock pickers and investors so we have to be conservative. Most people trading dont like to be conservative/realistic. If you have only 10.000$ to trade with and want to make a living from it you might be tempted to go for a much higher %profit This i feel is a "mistake" wich is often made , its not realistic and it often results in terrible terrible losses.
The by far safest way to "invest" your monney is buy a house and live in it. Safing you the rent while apreciating in value over the mid-long term with at least the anual inflation and possibly more. No other investment has a risk reward ratio even close to owning a house though you need to have a 10 year horizon for this.
Well if you lend monney to buy a house then thats different. Then you are not investing since you have nothing to invest , you are loaning monney and then buying a house. wich can still be a smart decission btw, but it is different. Houses had their bad times but if i look at the housing prices in my country over the past 100 years,then they have been the by far most safe asset to put your monney in.
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Houses are not good investments For starters you need lots of money and a realiable source of income, then you have to get a loan and pay taxes (depends on country) only to own a property 10-20 years later. You can start renting that property only then. Considering money has value in time, it takes so much fucking time to get your money back on a house that it isn't as profitable as people like to make it seem (obv, there has to be a case by case analisis).
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Open a ROTH IRA and max it out every year. just do it.
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There is no "secret" to investing - it's about leading a prudent life (don't overspend) and not taking huge risks. There are many techniques that work and it would also depend on the country that you're living in. Another important thing is to diversify as much as possible.
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United States24342 Posts
On February 14 2012 14:00 Tiamat wrote: Open a ROTH IRA and max it out every year. just do it. I strongly suggest against this for 99% of tl. Putting your money somewhere you can't get access to it at our age (average tl user age) is a big mistake....
Not saying you shouldn't invest for retirement... just that the advice is overkill and should not be listened to by new young/new investors.
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Passive investment approach via a diversified set of index funds. Set it up automatically, check in every once in a while, and stop worrying.
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The guy above me is right. Unless you want to get REALLY serious about investing there is no reason to do anything other than buy index funds and check them minimally.
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There are three steps to becoming financially solvent:
1. Pay down your debts.
2. Spend within your means.
3. Save responsibly for retirement.
In any case, there's no surefire method to get "rich" from investing. You can invest intelligently, but there will always be that seesaw relation between risk and reward in investment. You see people recommending this way or that, but invariably many of the get-rich-quick methods leverage a huge amount of risk.
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