Past Time to do some Investing..ILM huddlers heyoo

[Creep59]

My basics:

Make sure you use all your tax vehicles to their extent.

Make sure you use all employee matching programs to their extent.

With stocks, almost no one out picks an index fund over time.

Be mindful of your costs (especially with funds). Hidden fees can eat up any gains you make.

Never mistake a bull market for intelligence.

 

 

Most informed and intelligent answer here.

[Squirrel]

Delhommey hit on the matching part if your company matches you in the 401k you would be a idiot not to put atleast the minimium in it. 

 

 

Also if you are looking at stocks.  Dont fall in love with one you will get burned. I would suggest 1 stock to you right now and alot of people will tell you dont do it.  But airline stocks are going to comeback with all these mergers.  Delta Airlines DAL is cash flow positive and has little debt.  Would be a good stock to buy and hold the next 3 years.  

 

current price is 18.13  for reference in 6 months

 

[TheJason]

Saucy, this is some of the most inaccurate investing advice that one could ever post on several levels. 

 

 

I'm doing fine, thanks.

 

 

 

But please do tell me how one makes sustainable and livable income off only the stock prices going up. I'm all ears. And having millions of shares in order to achieve that isn't an option.

 

 

 

 

 

 

FYI, I'm no expert by any standards. I understand dividend yields, and jumped all over the banks about a year or so ago. Love me some Bank of America and JPM. ;-)

[R0CKnR0LLA]

I'm in the process of starting my own business. Give me 6k to help with startup costs and I'll cut you in.

[pstall]

If you have little knowledge of the market then stock picking is the worst thing you could do.

Build your knowledge base as you dollar cost avg and ladder up from there.

Then for larger hits for giant things you can think about 1031 exchanges to get to the property you want.

Son of boss programs might still be under the radar but I suggest crawling before doing triple jumps.

[Hawk]

I got a guy!

 

the fees are very small and he does great work and best of all, I do nothing!!!

[Happy Panther]

I'm doing fine, thanks.

 

But please do tell me how one makes sustainable and livable income off only the stock prices going up. I'm all ears. And having millions of shares in order to achieve that isn't an option.

 

I don't know why you are referencing millions of shares. It has no relation to growth vs dividend stocks.

 

I would read some basic articles on this as your premise is simply way off. It's econ 101 stuff. But I will try to give you a clear example below that will help.

 

There is a time and place for both and people will argue ad naseum about this but the fact is that the economics of a dividend stock and a growth stock should be nearly identical. 

 

Let's say there are two identical companies, A & B. This is a very simplified scenario.

 

Both run coffee shops and are valued at $100 today and both make 7% compared to stock price per year as of today.

 

A is a growth stock which I invest in. B is a dividend stock which you invest in.

 

At the end of the first year company A takes it's $7 and opens up a bunch of new stores. New stores mean more overall profit and the stock price goes up to $107.  At the end of year 2 the company makes a profit of $7.50 (7% of $107) and plows it back into the business. Now the stock price is $114.50. I have $114.50 all in a stock

 

At the end of the first year company B takes it's $7 and gives it to you. You invest that $7 on your own. At the end of the second year you get another $7 but you also earn $.50 on your investment. So you have $100 in stock and $14.50 elsewhere. You have the same as me just in different vehicles

 

That's how it would work if there were no taxes. Unfortunately when you got your $7 you paid tax on it. The rate depends on what kind of dividend it was. So right now you actually have around $112. But don't worry, I will pay tax on mine later when i cash out.

 

So yeah you can make great returns in both types and you should have both in your portfolio. Depending on age, tax statues and economic climate, one type of stock may be more favorable. The dow has gone up over 100% in the last 4 years and earnings continue to be strong. I'm pretty happy with the performance of my growth stocks but I have moved some money into dividend stocks because of the runup.

[TheJason]

Makes sense. Maybe I'm too impatient. Like I said, I'm no expert, just know that dividend yields was easy for me to understand is all. 

 

Thanks for the breakdown, always love to learn more.

[Happy Panther]

Makes sense. Maybe I'm too impatient. Like I said, I'm no expert, just know that dividend yields was easy for me to understand is all. 

 

Thanks for the breakdown, always love to learn more.

 

Good deal. But I have to ask...you mentioned Bofa as a dividend stock. 

 

Aren't the yields on this tiny right now?

 

http://ycharts.com/companies/BAC/dividend_yield

[PhillyB]

so how would you guys suggest actually getting started on this? do the legwork yourself researching these things? find an advisor of some sort? i'm really completely clueless in this realm

[Happy Panther]

so how would you guys suggest actually getting started on this? do the legwork yourself researching these things? find an advisor of some sort? i'm really completely clueless in this realm

 

 

Assuming you have a rainy day/emergency fund already and assuming you are young:

 

 

I would open an investment account and invest whatever money you have for investing in a large cap mutual fund with low fees.

 

Here is one. 

 

 http://money.usnews.com/funds/mutual-funds/large-growth/vanguard-primecap-fund/vpmcx

 

If you did nothing but put some money each month in this fund for the next decade you would be a better investor than 90% of the world. 

 

Investing can be as easy as that.

 

If you would like to branch out there is tons you can do and learn.

[pstall]

Read the book I posted and open a trade king or etrade acct.

For now set up a small amount to be swept from checking to your brokerage acct. Maybe 50 a month. Buy some index funds and just track individual stocks until you get better. You can do this w/out buying stocks.

If you get a broker vet them. With your line of work you prob have some that come by reg and pick their brains some.

[TheJason]

Good deal. But I have to ask...you mentioned Bofa as a dividend stock. 

 

Aren't the yields on this tiny right now?

 

http://ycharts.com/companies/BAC/dividend_yield

 

 

 

No, sorry, that was meant as a lump with my bank investments. Them, JP Morgan and Morgan Stanley I had a gut feeling about exactly a year ago, that either the banks were going to bounce back, or our country was going to poo. I bet on 'Merica. :)

[mmmbeans]

VTI to start.

 

 

not flashy, 2% yield, diversified as f*ck, low fees.