(There are also bond funds.) The funds that statistically offer the best gains at the lowest risk with the lowest cost are know as index funds these blindly invest in all shares meeting a given criteria, not trying to pick only "undervalued" stocks. We pay a fee to own shares of a fund that gains or loses value based on the stocks it owns. We reduce our risk of being wrong by investing in mutual funds. If you want to try your luck, do it with a small percentage (~5%) of your investments. But you probably won't be both over an extended period of time. You could be smart, or you could be lucky.
#Reddit personal finance investing professional#
Professional investors are not any better than average, either. Who's right? Statistically, most people are bad at buying and selling stocks. You buy and sell shares of stock from people who want to do the opposite transaction. Not everybody is happy seeing the value of their stocks go down 20% for a while, but it's part of the deal. Stocks historically provide better overall returns than bonds, at higher risk. Stocks are usually valued more for their future price growth, called capital gains, whereas bonds are valued for their income and stability. Bonds are more stable less than 10%/year is more typical. Stock prices changes up or down of 10% in a week and 50% in a year are common. Stocks and bonds pay current income, and have a resale value based on how the company is perceived for stocks, and what interest rates are doing for bonds bonds lose value when interest rates rise. Equities aka stocks give you an ownership share in a private company, providing current income from dividends as well as potential price appreciation.
Government and corporate bonds are loans that pay you interest and eventually return your principal, much like bank accounts or CDs. If you have different goals and assumptions, then your checkpoints would be different, and perhaps lower.Īs you start investing for shorter-term goals, you need to understand types of financial assets, types of income, and how they are taxed.
If you want that income but your savings are considerably lower, consider adjusting your retirement contributions before doing other types of investments. A checkpoint at age 40 is somewhere near $250,000. That's a lot for people who might have been in school longer, or had to repay loans. If at age 30 you (yourself, or household) have close to $100,000 in tax-advantaged retirement assets (401k, IRA, etc), you are on track for that $1M+. For example: to sustainably generate a median ~50k today's-dollars household income just from investments in your mid-60's, you'd need $1M+ in retirement assets. Let's first make sure your retirement funds are adequate. (You can put less to work it just won't get much done.) Without trying to replicate /r/financialindependence, your options include: If you have ~$50,000 or more in savings outside of retirement / house savings, put it to work for you. While you can use this info before or after 40, employment income growth often starts to taper off then. Advice for middle-aged adults | ages 45-65.Advice for older young adults | ages 25-35.Advice for high school students and teenagers | ages 15-20.Advice for mid-career adults | ages 35-45Īdvice for mid-career adults | ages 35-45.Here, please treat others with respect, stay on-topic, and avoid self-promotion.Īlways do your own research before acting on any information or advice that you read on Reddit.
#Reddit personal finance investing how to#
Get your financial house in order, learn how to better manage your money, and invest for your future.
0 kommentar(er)
