Financial Advice

[parkthebus]

I'm 20 YO and I've just started to get my finances in order. I'm looking at several ways to invest my money but it's not something I've ever done before and I'm not sure where to start. I can do all the research online, which I intend to do regardless, buy hopefully someone can streamline the process by pointing me in the right direction.

The first idea I have is property, buy-to-let. Has anyone got any experience in this and what advice would you give to someone looking into it?

Another route is stocks. It's such a broad subject that I really am lost as to what the best options are. Any personal experiences or book recommendations would be good.

Ive also been looking at peer to peer lending; is this too risky? Any other info would be appreciated. Thanks

 

[Bible_Belt]

Here's a stock thread:
http://www.sosuave.net/forum/index....esting-in-stock-any-tips-for-a-newbie.232925/

Maintenance is the killer in being a landlord, if you can't do most of it yourself. But you still need the right tools and experience.

 

[parkthebus]

Thanks for link. My grandad used to work for a maintenance company and I intend to get him to help me.

 

[BeExcellent]

Check out mrlandlord. com Q & A forum. You can read & research & ask & learn everything you can imagine there if you are US or Canada based. Less familiar with whether they are well versed in overseas (relative to US) but it is a great resource to get educated.

Kudos to you for thinking like this at a young age. That's how you start down the road to success.

 

[synergy1]

Real estate - from someone I know of who became profitable buying units and renting them, I can tell you this ; it takes a lot of time to get significant free cash flow. You'll be fixing the units, dealing with tenants, regulatory issues with repairs etc. Its a full time business as far as I am concerned.

Stocks - Same story. Read...a lot. Get ready to make mistakes. Understand business, how they work, who the players are, how to value them, and of course the macro view on where/when to invest. For a first book, its hard to say. I'd say One up and Wall street, the little book that beats the market or the one that got it started for me Buffetology ( posted on this forum over 10 years ago). As many will say, the game is rigged, and even smart people lose their shirts. Don't think of stocks as a half assed way to amass a fortune.

 

[Tenacity]

I'm 20 YO and I've just started to get my finances in order. I'm looking at several ways to invest my money but it's not something I've ever done before and I'm not sure where to start. I can do all the research online, which I intend to do regardless, buy hopefully someone can streamline the process by pointing me in the right direction.

The first idea I have is property, buy-to-let. Has anyone got any experience in this and what advice would you give to someone looking into it?

Another route is stocks. It's such a broad subject that I really am lost as to what the best options are. Any personal experiences or book recommendations would be good.

Ive also been looking at peer to peer lending; is this too risky? Any other info would be appreciated. Thanks

Well, you have active and passive investments.

Active - These are investments you will be more hands on with during the month. Such as businesses you operate, real estate you own that you will use for business purposes (such as renting out), or any active trading you will do with stocks, bonds, or particular funds.

Passive - These are investments you will do where you will be hands off, you will buy, hold, and watch them over a long period of time (10 - 30 years).

* For Active investment recommendations, I can't give you any "advice" per say because that is going to all be depended upon your talent, skills, level of capital, expertise, your network, the time you have involved, etc.

* For Passive, you should be looking at putting a portion into Equities and a portion into Fixed Income.

- For Passive Equities, I think Index Funds are the best because most other Mutual Funds with managers in them doing trades all day, don't usually beat the major S&P Index and plus the fees are lower. Note, a stock is when you own a very small piece of ownership in a company but said piece of ownership doesn't give you control over any day to day operations. You can choose the S&P Index Fund which the 500 largest companies are indexed, or you can use the Total Stock Market Index:

https://personal.vanguard.com/us/funds/snapshot?FundId=0040&FundIntExt=INT

https://personal.vanguard.com/us/funds/snapshot?FundId=0085&FundIntExt=INT

- For Passive Fixed Income, you can either buy a Bond Fund of the Total Bond Market (https://personal.vanguard.com/us/funds/snapshot?FundId=0084&FundIntExt=INT), or build a Bond ladder of Individual Bonds, CDs, Annuities, or P2P Loans from somewhere such as Lending Club. Note, a bond is when you are loaning money to either the Government (Treasury/Muni Bonds), a Corporation (Corporate Bond), a Bank (CD), an Insurance company (Annuity), or to Individual Consumers or Businesses (P2P Loans).

 

[Tenacity]

Stocks - Same story. Read...a lot. Get ready to make mistakes. Understand business, how they work, who the players are, how to value them, and of course the macro view on where/when to invest. For a first book, its hard to say. I'd say One up and Wall street, the little book that beats the market or the one that got it started for me Buffetology ( posted on this forum over 10 years ago). As many will say, the game is rigged, and even smart people lose their shirts. Don't think of stocks as a half assed way to amass a fortune.

I honestly don't think anybody from the general public who doesn't have some sort of inside information, better tools, networks, or something related to Wallstreet....should ever pick individual stocks. Indexing is the best way to invest in stocks in my opinion, pick either the S&P Index or the Total Stock Market Index, then call it a day. Also use Vanguard, they provide excellent service.

The reality is that stocks nor fixed income will be the SIGNIFICANT wealth builders they were in the Past, the Central Bankers screwed that up. The significant wealth builders going forward will be active investments that you own, control, and manage such as starting up a profitable business.

 

[BeExcellent]

he significant wealth builders going forward will be active investments that you own, control, and manage such as starting up a profitable business.

This ^ is absolutely true.

Do not be discouraged from doing rental property. It creates real wealth over time. Read on the forum link I noted - it's a gold mine - and understand that you get to control your real estate business, which is a great advantage. Anything successful requires effort, education, and persistence. If becoming successful were easy then everyone would already have done it. It can be simple, but it requires effort and dedication. It also requires self belief. Never quit on yourself no matter what, learn & make wise decisions, find others who are successful to learn from, and you will be on your way.

Never be bashful to ask a successful person to teach you what they know and how to think. Most are happy to share their knowledge and pleased to contribute to the success of someone else.

 

[Bible_Belt]

I agree that index funds are better than mutual funds.

The one idea that I always try to get across to people about the stock market, with rare success, is this - give up on the idea that you will ever know anything that everyone else doesn't already know. We have the most efficient stock market in the world. Information gets factored into stock price immediately. In fact, stock always move before the news. That's technically somebody doing something illegal, but since it is through a long rumor mill, it's impossible to catch people doing it. And as far as any sort of financial research you could possibly ever do - someone else has already done it, someone who is a lot better at accounting than you will ever be, and the stock price reflects that information already. If you think it doesn't, you're wrong. The market is always right.

So if price is everything, technical analysis of charts is the way to pick stocks. But there's a lot more to it than moving averages and all the price-based indicators that software companies tought. Guys who are really good at it will have chart patterns of their own off which they trade, not something they read in a book, and that comes from years of dedication to the trade.