Investing

[Asel.mike]

I want to learn about investing, and start a portfolio in the next few months. I'm not trying to get rich quick. I want to learn about types of investments, long term goals... things like that. Additionally I'm not interested in letting someone else do it for me, I'm fine with seeking advice or consult, but I would like to be the one in control of it.

So my big question to you all is, do you have any books or articles you would recommend?
My level of knowledge on the topic is quite low, so I'd be starting from scratch, reading whatever literature I can find, be it books, the internet, etc.
Thank you all for taking the time to read. I look forward to your responses.

 

[LarryH]

I would suggest some of the Rich Dad (Robert Kiyosaki) books. You can usually get them used from Amazon for cheap. There are also some websites with pretty good free lessons that will cover the stock investing basics and more. I've been working on learning ForEx (Foreign Exchange) trading for a while now on a site called baby pips. They have a really extensive "school" on the subject. I know there was one I used for stock options training in the past but I can't find a bookmark. There are also a lot of online brokers that offer free paper money accounts to practice with. They hope to get you comfortable with their platform so you'll set up a real money account.

One thing I wish I had not done is paid for investment courses/seminars. Although I did learn some stuff from them the price/benefit just wasn't there for me. I wish I had saved the money and put it in my brokerage account, especially my self directed ROTH. I don't even like to think about how much better off I'd be. :blush:

Of course you'll have to figure out what works best for you.

Larry

 

[chiefmd]

Try share builder. That's the website I use. It's great for someone who is young and with not a lot of disposable income. You can deposit a certain amount a month and buy partial shares vs buying full shares elsewhere.

 

[Asel.mike]

Thanks you guys, I'll take a look into all those suggestions. I definitely have some learning to do before I jump in.

 

[Setharsis]

I would suggest some of the Rich Dad (Robert Kiyosaki) books. You can usually get them used from Amazon for cheap. There are also some websites with pretty good free lessons that will cover the stock investing basics and more. I've been working on learning ForEx (Foreign Exchange) trading for a while now on a site called baby pips. They have a really extensive "school" on the subject. I know there was one I used for stock options training in the past but I can't find a bookmark. There are also a lot of online brokers that offer free paper money accounts to practice with. They hope to get you comfortable with their platform so you'll set up a real money account.

One thing I wish I had not done is paid for investment courses/seminars. Although I did learn some stuff from them the price/benefit just wasn't there for me. I wish I had saved the money and put it in my brokerage account, especially my self directed ROTH. I don't even like to think about how much better off I'd be. :blush:

Of course you'll have to figure out what works best for you.

Larry

I think he (Robert Kiyosaki) declared bankruptcy, and uses it to offset his millionaire income. That's where u need to be at.

http://www.nbr.co.nz/article/rich-dad-authors-advice-falls-flat-he-hits-financial-trouble-dw-131803

But seriously, a lot of brokerage companies have investing tools that they have online. They're mostly pretty safe bets and go with market trends. I'd start there till you get a better feel and then move up.

 

[LarryH]

I would suggest some of the Rich Dad (Robert Kiyosaki) books. You can usually get them used from Amazon for cheap. There are also some websites with pretty good free lessons that will cover the stock investing basics and more. I've been working on learning ForEx (Foreign Exchange) trading for a while now on a site called baby pips. They have a really extensive "school" on the subject. I know there was one I used for stock options training in the past but I can't find a bookmark. There are also a lot of online brokers that offer free paper money accounts to practice with. They hope to get you comfortable with their platform so you'll set up a real money account.

One thing I wish I had not done is paid for investment courses/seminars. Although I did learn some stuff from them the price/benefit just wasn't there for me. I wish I had saved the money and put it in my brokerage account, especially my self directed ROTH. I don't even like to think about how much better off I'd be. :blush:

Of course you'll have to figure out what works best for you.

Larry

I think he (Robert Kiyosaki) declared bankruptcy, and uses it to offset his millionaire income. That's where u need to be at.

http://www.nbr.co.nz...ouble-dw-131803

But seriously, a lot of brokerage companies have investing tools that they have online. They're mostly pretty safe bets and go with market trends. I'd start there till you get a better feel and then move up.

Wow! I had no idea. It's been years since I've used any of his material. I still think his books are usefull but definitely shouldn't be a sole source of learning.

 

[likescarsz28]

Start with The Richest Man in Babylon

Seriously

 

[Nihon_Ni]

Start with The Richest Man in Babylon

Seriously

That's a really great book!

 

[BSchmidt1981]

I agree with Nihon and Scarz comments. It got me thinking about reading it again. Grab a good stick and have a read. http://www.ccsales.com/the_richest_man_in_babylon.pdf

 

[likescarsz28]

BSchmidt1981 - Good show for finding that for Mike.

Mike, when you wrote "so I'd be starting from scratch", my best advice for you is to start with this book. There are only five principles that I have followed to pull myself out of the governments definition of poverty.

1) Work harder and smarter than your employer expects; all the while letting them know that you are ambitious and that you understand that making profit for the company is your job, no matter what your title is.

2) Never, ever tell a lie.

3) Like Dave Ramsey said, "today, live like no one else so later in life, you can live like no one else". Although I followed this principal from a you age, I think he put it best. Do not do the same things that your friends do, ipods, night clubs, expensive clothing, gamining systems, trips, cars, etc. Live within your means and save. Most of my friends were doing these things and thought I was fool for missing on some things. Well, how much good would that lazer disc player be doing me now? How about the Beta Max, the martini's in the warehouse district, the walkman? They are living pay check to pay check with a negative net worth even though their salaries are more than mine. One friend, sho proports to be a millionaire, mooches beers off of me at the bowling alley league night because he doesn't have a nickel to his name. Again, negative net worth, a house of cards, in debt up to his eye balls.

4) As a young man, time is on your side. Understand the power of compounding (THE YING) . Understand the power of ammortization (THE YANG). Do NOT borrow money on things, you will be on the wrong side of the interest calculation and become a servant to the lender. The only thing you should ever consider borrowing money for is a house. Save a 25% down payment and find a house that you can finance for 15 years for less than 25% of your income.

5) Remain disciplined. When one half of your brain says, "come on, buy that widget, you deserve it", the other half needs to tell it to fuck off.

There are no give me's, no gimicks, no schemes and certainly no trickery involved in getting Rich. Self discipline and time are key.

 

[thechenman]

I've been working in investment banking/sales/research professionally for over 15 years. I'm on the institutional side rather than the private wealth management side, but the basics are the same. My personal opinion is that the "How To" books while offering a guideline, do not necessarily offer the right approach for every type of investor...otherwise there wouldn't be so many of them. My experience over the years has taught me that investment styles can be learned, but not always executed well/properly. The reason being is that investors are influenced by greed and fear more than anything else. The key is being able to spot it in yourself. I say this because finding a stock/bond/ETF/currency/etc. to buy that can make you money isn't difficult. The difficulty is knowing when to buy it and when to sell it...that requires a lot of self control and patience. You won't catch every winner, but it can save you from devastating losses. My recommendation for the best book to read would be "Reminiscences of a Stock Operator" by Edwin Lefevre. This work was first published in 1923 and it is still as relevant today as it was back then. Markets change, new products and trading methods/methodology are developed, but market psychology remains the same...meaning human nature hasn't changed. The more you understand it, and the better you see it in yourself...the more effective money manager/trader you will be. It's an ongoing process...even the Oracle of Omaha hasn't mastered it, but it can go a long way towards making fewer mistakes if you can learn the lesson being taught.

 

[BSchmidt1981]

Hey Scarz...good show on the Dave Ramsey quote.

 

[Breedy]

Dave Ramsey has some good advice, but IMO he is selling a product/system. Credit Cards aren't the problem, lack of self control is. I get a check back from my CC every year, others get reward points... Things paying cash doesn't get you. It's been sometime since I read one of his books, but they always struck me as being geared towards someone trying to climb out of debt, not necessarily someone getting started investing.

 

[BSchmidt1981]

Very true Breedy. He rarely offers any solid investment advice other than long term growth stock mutual funds with a prospectus that shows a history of 11-12% returns. And while I agree he does "sell" a system his advice for those trying to dig themselves out of a hole is solid. I listen to the radio show on my way to work. It's a good reminder for me to be thankful of the problems I face as many other are fsr worse off. Sometimes we just need some perspective.

 

[Pugman1943]

A different spin on deversification. First, money in the bank is useless. The 1% ( if that ) you are making is not doing anything for you. If you do due diligence and find stocks or bonds that are good buy and have great dividends you will make money. The ugly side to that is the government sees every move and in the end you will pay tax on what can be seen and is reported.

Have you given any thought to items you could purchase and sell outright? Two simple examples are gold and silver. When you buy them it is a simple transaction as in a food store purchase. When you sell them, you go to a exchange, or the web, sell them, get a check. The profit is yours. No paperwork, no tax. My point is, what do YOU know that you are comfortable with, computers, tooling , used cars etc. Right now cash is king and if you can find what you know is a heck of a deal, you could get that and flip it and make some nice change on the side with no paperwork or taxes.

Don't get me wrong, I'm not trying to cheat the government but I am tired of paying tax on what I already paid tax on. I believe the term is called double dipping.

Do buy some stocks, bonds etc with 20% of your disposable income but find some other venues when you can make a profit and keep that profit.

 

[Breedy]

It's a good reminder for me to be thankful of the problems I face as many other are fsr worse off. Sometimes we just need some perspective.

Could not agree more!

A different spin on deversification. First, money in the bank is useless. The 1% ( if that ) you are making is not doing anything for you. If you do due diligence and find stocks or bonds that are good buy and have great dividends you will make money. The ugly side to that is the government sees every move and in the end you will pay tax on what can be seen and is reported.

Two simple examples are gold and silver.

Couldn't agree less!!!

Take the term "Savings account", what does it actually mean? Is it just were you park your money to sit? The benefit from Savings accounts is derived from the fact that you can forgo credit and loans. Look, money is super cheap right now but that doesn't mean you should go crazy. Say your car dies. The following is just an example, say a used car that you want will be in the neighborhood of $15,000 and you can get a 4.9% interest rate. Financing the whole amount will get you monthly payments of ~$282, putting down $5,000 lowers your payments to $188. There are lots of "what ifs" in the world, forgoing savings and only investing in things "that make money" is foolish.

I am a 31 year old married guy with a stable job, a wife, two kids, a mortage and one car payment. We spread our money around, invest in different vechiles, but also stock away into savings each month. Extra money like tax returns go into savings...this years christmas presents are/will be paid off and I get some kick backs from the credit card company. While your local savings account might not get you a high rate of return, it allows you to keep your money liquid and to take advantge of deals and other savings.

 

[Nihon_Ni]

Have you given any thought to items you could purchase and sell outright? Two simple examples are gold and silver. When you buy them it is a simple transaction as in a food store purchase. When you sell them, you go to a exchange, or the web, sell them, get a check. The profit is yours. No paperwork, no tax.

Not true. Depending on the volume, there may or may not be paperwork; but there is always tax, either due (on a profit) or credit (on a loss). Gold, silver and other physical metals (along with vintage wines, stamps, artworks and antiques) are classified by the IRS as “collectibles”. When you sell an investment in collectibles that you held for more than a year, your gains are taxed at a higher rate than the capital gains rate that applies to stocks, bonds or mutual funds.

My point is, what do YOU know that you are comfortable with, computers, tooling , used cars etc.

This part is great advice. I don't personally invest in anything I can't explain to my wife.

Right now cash is king and if you can find what you know is a heck of a deal, you could get that and flip it and make some nice change on the side with no paperwork or taxes.

I would never encourage anyone to make deals under the table. I don't appreciate the way Congress spends my tax dollars, but the law of the land is to pay taxes on all income, not just what is traceable. Tax evasion is a felony -- just ask Al Capone.