Current Events > How does one even get started in investing money?

(+) Yeah! (+)

This one guy in my FB is all preaching about investing your money in low cost index funds, stocks, etc.

He criticizes people for spending their money left and right and not investing any of it into their future. He is right on this one though that more people should think of their future and their long term prosperity.

How would one even get started in investing? Not everyone can roll into Vanguard or Charles Schwab and ask these Qs to a financial advisor because I doubt most of them have your best interests in mind.

If a person wants to invest and has no idea whatsoever what theyre doing, they can end up like the broke pro athletes (for example) who went broke because they have zero idea of how to invest their money and they trusted a financial advisor to do it for them

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Crono99 posted...

I guess the very first thing is to get a brokerage account

Check with your bank

Will the bank tell me the truth about this though? Thats what im worried about

I dont wanna go into this and lose all my money because of bad advice

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AzNDarkSamurai posted...

Not everyone can roll into Vanguard or Charles Schwab

You shouldn't need to, you can just make an account on their website. If your employer doesn't offer a 401k then look into opening a Roth or Traditional IRA depending on your income.

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Find one of the many free investing platforms. An easy one to use is M1 Finance. Requires $100 to open an account.

Then you pick your stocks. On M1 your portfolio is in a "pie" where you pick what percentage of your money goes to each stock. So you could pick 10 stocks and tell it to put 10% of that $100 opening deposit in each one and you'll have $10 in each stock.

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1. open a brokerage account
2. add funds
3. buy spy, voo or vti

there, youre done.

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Buy (physical) precious metals. Not as big gains as stock but the constant overall trend is up, plan on keeping it for at least 5-10 years and you wont lose, and unless an emergency hits you're not gonna spend it.

Plus it's shiny and heavy and makes me feel like a pirate

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I invest in Pokemon cards.

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John_Galt posted...

1. open a brokerage account
2. add funds
3. buy spy, voo or vti

there, youre done.

wow its that easy? lol

You dont gotta do anything after that?

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AzNDarkSamurai posted...

wow its that easy? lol

You dont gotta do anything after that?

Pretty much just keep dumping money into any of those and in 30 or so years you'll be rich

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Financial advisors arent out to get you, and there are a lot of rules about their advice. They can be really helpful for talking through goals, assessing risk tolerance, and picking a decent fund.

that said most financial advisors arent worth it unless you have a lot of money and/or complex finances. They will charge you, and frankly if you dont plan on needing the money soon you can pick whatever arbitrary index tracker.

The FAs that do futz around with low balance clients probably wont know much more than an amateur investment enthusiast. The Series exams really arent that hard.

The FAs who really know their shit are probably only dealing with folks investing big bucks
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Isn't vti and vtsax the same?

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Crono99 posted...

Start small then. You don't have to invest all your money.

This. Dont think you have to put in a ton of money to make good on investing.

Every little bit helps, and its possible to grow a little money into a lot relatively quickly.

If you put in a little and lose it, it wont be so hard to swallow the loss. But youll gain experience in watching the market and knowing what does, and doesnt, work for you.

Once you gain experience and confidence, you can build up to larger things.

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AzNDarkSamurai posted...

wow its that easy? lol

You dont gotta do anything after that?

if your time frame is long then its really that simple

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John_Galt posted...

if your time frame is long then its really that simple

Yep. Buy and hold is the laziest yet ultimately most profitable strategy.

Its also way more advantageous from a tax standpoint. Selling an asset after holding onto it for at least a year results in capital gains taxes, which are lower than if you sell within a year.

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It's easy to invest if you want to just treat it like a high interest rate savings account and focus on ETF's and big companies. That's mostly what I do.

Hard part is filing the taxes for everything at the end of the year. Especially when you didn't know the difference between royalties and dividends. Thankfully whatever funds that do pay out royalties provide an annual tax statement that explains exactly how to calculate everything.

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AzNDarkSamurai posted...

Will the bank tell me the truth about this though? Thats what im worried about

It's a major major major crime to lie about financial investment if you're a broker.

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Also if you're thinking about it at all I recommend starting sooner rather than later. I had been playing with the idea for years and the finally last year started. Then I started looking at the historical charts for things and realized I missed out on a ton of gains.

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Tyranthraxus posted...

It's a major major major crime to lie about financial investment if you're a broker.

there's also regulations in place (that are newer, bafflingly) that stipulate the broker HAS TO operate in the best interests of their client

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You need to confirm with your financial advisor you're considering that he/she is a fiduciary. If they aren't you need to run for the hills because they don't have your best interests at heart

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^good to know. I never knew to ask this.

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bump

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Like mostly everyone else said, the typically long term, low-risk investments are safest.

Leaving your money in savings account is essentially wasteful (outside of an emergency fund or saving for particular object in near future) since in long term inflation will likely outgrow the fraction of growth most savings accounts earn.

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