Economy is doing great, Greece is doing better!

[MidnightSensi]

I walk into my office earlier today and see -800 and something on my stock ticker thing. News says the Dow reached almost 1000 points down closed at like 4% down. Some technical glitch I don't understand (buying delays or something?) along with the fact that Greece is going to like implode....and Europe has all their debt.

Every time I think about buying some stocks or buying indexes again, something like this happens. I got lucky with getting out before 2008, but, I know that at my age I should probably not just have money sitting in a bank either. :/

 

[jamie2112]

I know that at my age I should probably not just have money sitting in a bank either. :/

Buy stuff with it Sensi you only live once bro.............

 

[MidnightSensi]

Buy stuff with it Sensi you only live once bro.............

Haha, but if I invested I should be able to buy more stuff. Saving to a bank I basically lose money with inflation, or break even. Then again, I guess it is better than losing it in the stock market. But as soon as you talk to someone who is into financial ****, they talk about hedgefunds and indexes and stuff and other stuff and then you see days like this and go "wow, good thing I didn't listen to that financial guy"

 

[jostenmeat]

Haha, but if I invested I should be able to buy more stuff. Saving to a bank I basically lose money with inflation, or break even. Then again, I guess it is better than losing it in the stock market. But as soon as you talk to someone who is into financial ****, they talk about hedgefunds and indexes and stuff and other stuff and then you see days like this and go "wow, good thing I didn't listen to that financial guy"

Check out DRIP, if my impression is correct that you want something that is relatively lower in risk, and longer term. Whatever little I know about stocks is from my brother, who has taken this on obsessively as a new HOBBY. He's my younger brother, and doctor by trade. He trades way higher in frequency than someone like me, but he's given me a few good tips as someone who's scared of stocks.

Drip = dividend re investment plan. You'll find them with long standing blue chip stocks, not newer companies as they need to reinvest into themselves more. Companies like ATT and Verizon offer 6%, AFAIK. As a Drip, that 6% goes back into buying more of that stock (and with no transaction fee either).

So, he gave me a scenario, for instance. I know 12k is a lot of money, but you'll get the point. Say that you have 12k in IRA. Say you're stupid enough to put all of that into a Drip. Let's say you retire in 33 years. The IRA means 0% tax liability, ok.

Even assuming that the stock NEVER INCREASES IN VALUE (extremely unlikely), after 33 years, your 12k has now become 91.5k.

Well, I may look into throwing money into Drips soon, as I trust my brother. He did say it's key to start early with those.

 

[Tomorrow]

Here's what you do, midnight....

Save a couple hundred grand. Then start up a business and call it a bank. Banks borrow from the Federal Reserve Bank basically for free. Borrow a bunch. Then with that federal money in hand, go buy U.S. Treasury Notes. That's all there is to a secure future for you and yours. Repeat...borrow government money for nothing, and then sell it back to the government for a sizable profit (depending upon T-Bill maturation rate).

Nice, huh? And that's the way it's done in Wall Street banking, my friend. Risk free.

There's a cute alternative, too. Remember those stinky "derivatives"? Go find one that's betting that the interest rate will remain the relatively stable for U.S./international banks. Buy against that with as much as you can afford, because the interest rates in this country and the world will astound you in 5 years. (Pucker up. )

 

[jeffsg4mac]

I have a better idea. Start up a car company, build crap that nobody wants and pay all your workers twice what they are actually worth. Run the company into the ground and then ask this administration for a huge bailout. Take the money and move to Sweden or New Zealand. Or you could start a phony thug organization that fronts as a union and call it SCREUI. Get some more government money and leave. Or even better you could start the car company and bring in the the union get some oba er I mean government money for both and then leave the country

 

[MidnightSensi]

Check out DRIP, if my impression is correct that you want something that is relatively lower in risk, and longer term. Whatever little I know about stocks is from my brother, who has taken this on obsessively as a new HOBBY. He's my younger brother, and doctor by trade. He trades way higher in frequency than someone like me, but he's given me a few good tips as someone who's scared of stocks.

Drip = dividend re investment plan. You'll find them with long standing blue chip stocks, not newer companies as they need to reinvest into themselves more. Companies like ATT and Verizon offer 6%, AFAIK. As a Drip, that 6% goes back into buying more of that stock (and with no transaction fee either).

So, he gave me a scenario, for instance. I know 12k is a lot of money, but you'll get the point. Say that you have 12k in IRA. Say you're stupid enough to put all of that into a Drip. Let's say you retire in 33 years. The IRA means 0% tax liability, ok.

Even assuming that the stock NEVER INCREASES IN VALUE (extremely unlikely), after 33 years, your 12k has now become 91.5k.

Well, I may look into throwing money into Drips soon, as I trust my brother. He did say it's key to start early with those.

Cheers man, those look like the type of thing I'd want.

Can you cash out whenever you want?

Also, I don't understand the tax part of it though, how does the government tax you on the 91.5k?

 

[jostenmeat]

Cheers man, those look like the type of thing I'd want.

Can you cash out whenever you want?

Also, I don't understand the tax part of it though, how does the government tax you on the 91.5k?

Yes, AFAIK. With a Roth IRA, you never pay tax, even upon withdrawal. The money that went into the account are post-tax dollars to begin with.

You would be well advised to put as much money as you can, up to the yearly limit (5k for you and me), into a Roth account, even if it sits there for a while as cash.

Regarding the whole "even if it never increased in value", I should have said more specifically: if it maintained the exact same value. Still, you can look up the history way back, over 10 years, and you will see that you are fine, historically speaking.

You can play with this calculator to see how much you might make in the long haul.
http://www.hughchou.org/calc/drip.php

 

[Seth=L]

I have a better idea. Start up a car company, build crap that nobody wants and pay all your workers twice what they are actually worth. Run the company into the ground and then ask this administration for a huge bailout. Take the money and move to Sweden or New Zealand. Or you could start a phony thug organization that fronts as a union and call it SCREUI. Get some more government money and leave. Or even better you could start the car company and bring in the the union get some oba er I mean government money for both and then leave the country

Dude, I'm so amped to do this.

 

[NicolasKL]

I have a better idea. Start up a car company, build crap that nobody wants and pay all your workers twice what they are actually worth. Run the company into the ground and then ask this administration for a huge bailout. Take the money and move to Sweden or New Zealand. Or you could start a phony thug organization that fronts as a union and call it SCREUI. Get some more government money and leave. Or even better you could start the car company and bring in the the union get some oba er I mean government money for both and then leave the country

How much did Bush bail out the auto industry to the tune of?

Pro-tip: the answer isn't zero.

 

[Chu Gai]

How much did Bush bail out the auto industry to the tune of?

Pro-tip: the answer isn't zero.

That's true, but I think it didn't matter which political party held the presidency.

 

[lsiberian]

I walk into my office earlier today and see -800 and something on my stock ticker thing. News says the Dow reached almost 1000 points down closed at like 4% down. Some technical glitch I don't understand (buying delays or something?) along with the fact that Greece is going to like implode....and Europe has all their debt.

Every time I think about buying some stocks or buying indexes again, something like this happens. I got lucky with getting out before 2008, but, I know that at my age I should probably not just have money sitting in a bank either. :/

It's called dollar cost averaging.

If you buy 100 dollars of stock every month even if it goes down you can still end up gaining. Besides if the stock market doesn't go soaring up then you won't need the greater amount anyway. If you want a yield based investment. My brother(the financial genius in our family) suggests a good high yield bond fund with a long history. They average around 9.5 percent over time. It's much better choice than a dividend large stock. Remember you are young so every 7 or 8 years you wait to start investing forfeits half your retirement. It takes about 8 years for a 9.5 yield fund to double your money.

Wealth is built little by little not overnight. Invest 10 percent, give 10 percent to charity, blow 10 percent.

 

[jeffsg4mac]

How much did Bush bail out the auto industry to the tune of?

Pro-tip: the answer isn't zero.

Another reason I didn't like him either.