Personal finances:
 

I have been wanting to do something with the money in my savings for a while, but am very unsure as to what. So I'm going to ask you random group of strangers for some advice!

Here is the information:
Savings account is 0.10% interest rate
(Interest is compounded and credited monthly, based on the daily collected balance. Interest rates are variable and determined daily at Chase's discretion.)
I have $5,200 and add $100 every 2weeks.
I add to it randomly whenever I feel like also.
I figure at least $2,000 (to start) of it can be safely unavailable for awhile.

Here is what I want:
flexibility (I can at least add to the amount)
fixed interest rate (none of this "subject to change" bullshit)
earns more than a regular savings account

Here are my goals:
money for retirement
more money for investing

Simple? Maybe, but I've always been overwhelmed by all the different financial choices, and get scared about trusting companies on their promises. I'd really appreciate some sound, experienced advice.

Or I really need a dog:
http://ihasahotdog.files.wordpress.c...-retriever.jpg

1 year CD rates are around 1 to 1.5 percent. On $2000, that means you would make around $20 or maybe $30 in interest over the course of a year. If you lock into a 3 year CD or a 5 year CD, you will get higher rates, but my gut tells me that interest rates are going to go up in the next year, so you would be foolish to lock in to a long term CD right now when interest rates are at historical lows. You would be kicking yourself in a year or so when the rates are higher and you are locked into a low rate of return.

Is it worth it to you to take an hour or two to drive down to a bank to fill out the paperwork so that you make $20 in interest?

To make real money, you need to invest in the stock market, but there is substantial risk there, and you could lose money too.

I wish I had a good answer. It's a bad time to be shopping for CDs.

I think the best you can do right now is move it into an online savings account, like HSBC or ING. You really need a retirement account too. Read The Simple Dollar.com

mtp, I know you don't want risk, but at your age, the stock market is the way to go if you are looking at retirement. Over the very long run, it's historically been pretty safe. My own retirement savings are in the stock market, and they have fluctuated wildly over the last two years, but they are still there and doing ok. It's when you are the youngest that you can tolerate the most risk with retirement funds. It isn't until you get close to retirement age that you should start moving out of the risky market and into lower fixed rate safe funds.

If you are serious about retirement, I'd encourage you to look closely at a Roth IRA and put your money into a couple of mutual funds in a Roth IRA.

If this is money you want to keep access to now and want to be able to get at it when you want, I'd leave it in a savings account.

HSBC rates have steadily dropped for 2 years - they are not much more than 1% at this point. There was a nice personal finance link I was looking at not too long ago that was addressing just this issue.. Can't seem to find it now... Will look more later.

I think you should buy shares in The Cellar -it's the next big internet success story. It's going to be bigger than Google. Think about it, not only do we answer any question asked, we answer some not asked either. And we don't always ask if you spelled your search term incorrectly -sometimes we just correct it for you. We give advice, we ensure rule 34 is enforced and we have recipes for everything. Google and Wikipedia have got nothing on us!

Here's the thing, mtp. The answers to these questions are so complicated, there are people who make legitimate full time careers just helping other people do the right things with their money.

When I was younger, I got my feet wet in the market by opening an account with Charles Schwab, whom I chose because they were big and online and I figured they weren't going under anytime soon. I did as much research as I could stomach, chose a handful of no-fee mutual funds (the no-fee part is important,) a couple stocks that I was pretty sure were going to be solid, and bought in. I ended up making a small amount of money on everything except one stock, which lost big enough to cancel out all my other gains. The moral of the story is, if you want to really learn about the market and get involved, then start researching--but be prepared to lose some money, and maybe even a lot of it, as you learn. If you just want steady, higher-than-a-savings-account-growth, that you don't have to do much with... hire a financial advisor. They will save you money in the long run unless you're really prepared to do all their work yourself.

What if I move some of it into an MMA? I can still withdraw, but not often, and supposedly it has a higher interest rate than a savings account...

Sorry glatt, I'm kinda lost on the Roth IRA and mutual funds thing. Do I have to choose the companies to buy the stock in, and if so how the hell do I do that?

I've thought about doing that too clod, but that's another: how the hell do I choose? problem. I don't think I know anyone (here) that can recommend a financial adviser. How do I know they would be trustworthy, ect? In, addition to that, I don't know if I have enough money for them to take me seriously.

Well if you're looking for local Dwellar talent, lookout123 is a professional financial advisor. He seems like a straight up dude to me, but YMMV. If you're looking for truly local talent, you should ask your boss's boss at work. Or maybe his boss. Someone high enough up the chain that they make a lot of money. They might have an answer, and even if they don't, they'll be impressed that you're asking for that kind of responsible adult advice.

If the amount of money you have is too little for a personal agent to bother with you (admittedly, I don't know the answer to that,) then just go with one of the really big companies, because they usually have 24-hour financial help lines for any member to use. It won't be as personal, but the few times I've used them they've been extremely helpful and knowledgable.

I have this friend in Nigeria who was the personal secretary to.... :haha:

A quick search of the net yielded only one decent high return investment option:

1. High Pressure Sodium Lamp (600 watt is the most efficient but a 400 watt may suit a smaller space).
2. Fan running 24 hours a day if possible and oscillating.
3. NFT tank with pump and spreader mat (these come with the tank), Rockwool cubes.
4. 24 hour timer to control light periods. This should be used with a high power switch known as a contactor or relay switch as grow lamps can easily burn out regular timers used on their own.
5. A pH tester to test water and nutrient feed solutions.
6. pH adjuster such as phosphoric acid to adjust water and feed solution to around pH 5.2 - 6.0.
7. Nutrients, ones aimed at growing the plant you want to cultivate are best.
8. Matt white paint or white plastic to cover the walls of the grow space.

huh...

i was just going to suggest that she invest in w33d.

We want her investment to grow.

Have you considered a Peppermint Pig?

First you must decide whether the money is in for retirement. Or for investment that you will use before retirement.

Retirement accounts mean if you change the investment, you do not pay taxes. And if you withdrawal money early, then you pay a penalty.

Once you decide which account, then move on to what that account will invest in. glatt has the best answer. The best long term investment for the minimum risk as cited repeatedly by so many of the world's most successful investors including Warren Buffet and Peter Lynch.

They also note what to invest in. Companies that you first understand the products. For example, if you understand fashion businesses, then you know which ones are truly in the rising tide. Nothing in the financials can report a good investment. Financials can only flag an impending disaster or identify good suspects. But the product is where decisions are made.

Many do not understand these businesses. So invest in mutual funds where brokers take a fee regardless of performance. If your fund is doing 8% and the broker takes his 1% or 2%, then appreciate how much you have really lost.

Some invest index funds where the broker need not choose what to invest in. These also have service charges - only less.

The informed investor that fears to select obviously profitable investment then buys SPDRs. These are baskets of securities where the broker only takes a commission - just like buying any other stock. For example, some SPDRs include the QQQs which is a basket of high tech stocks. IOW you have all the advantages of an index mutual fund without the broker who is always the problem.

Another is SPY which is (if I remember) every stock in the S&P 500.

SPDRs will always outperform the index mutual funds by eliminating the biggest problem in a mutual fund – broker’s service charges. A service charge is a tax that provides you nothing useful. Remember, brokers get paid excessively because Wall Street ‘deserves’ it.

Successful investors saw and see Apple and Google as viable investments. Among other promising investments is Ford for obvious reasons. Even Toyota did a surprise turnaround faster than expected. Industries that probably will not do well are big pharma and (as usual) airlines. But then exceptions always exist. Exceptions you cannot see without years of experience understanding those industry products. SouthWest Airlines a good investment? Maybe. But I do not understand airlines sufficiently.

Warren Buffet is quite blunt about this. His close friend Bill Gates constantly makes recommendations. Buffet does not understand computer. He understands Dairy Queen, MacDonalds, and trains. Like any good investor, he only invests in industries he has long understood.

However if you have not watched and understood businesses in any one industry, then best is to invest in the SPDRs (pronounced Spiders). But first decide if this is a retirement account or something you will cash in before retirement.

So, basically I should hire a financial adviser who is paid by fee-only.

I do want to save for retirement, so I guess that means stock-market, but I don't have much confidence in my ability to choose stock.

This group looks good (to me)
http://keenerfinancial.com/

Their offices aren't all that close, but close enough...

Any red flags?

You mean apart from you handing over your hard earned cash to someone else to invest in the stock market? The STOCK MARKET?

Put your money in a coffee can under your bed and when it fills up, get another coffee can.

Did you not hear about what happened to everyone a couple of years ago? Let's say everything goes according to plan for the next 40 or 60 years and you hit retirement age with a big wad of cash and then there is another "correction" and your big wad of cash puts you in the place where a number of my friends and friend's parents are: SOL and living at a subsistence level having lost 50 to 75% of their money.

Invest in rental properties if you have to invest in something.

Listed was how you do not choose any company. You buy the SPDR for an entire industry or for the entire S&P 500, etc. Unlike index mutual funds that routinely underperform the market (due to service charges), your returns are almost same as the industry average. With SPDRs, you are actually buying stocks - not a mutual fund manager.

Many friends who do well at this do not trust a broker to make decisions. Brokers traditionally underperform the market. They are salesman. Are taught the rules. Really know little about companies or their products. Know more about manipulating you.

One friend, instead, hires a financial advisor paid only to make recommendations. He chooses from their recommendations. As a result, his wife's credit cards are now larger than the mortgage payments.

A full service broker is paid big fees as someone who will advise you. These 'service charges' tend to average a poorer performance. Many instead buy through discount brokers (Charles Schwab, E-Trade, Ameritrade, etc). Why pay big service charges to one whose history is to underperform the market? Especially when buying a SPDR is a 'no-brainer'.

You are strongly recommended to do something fast with a small amount of money. Every day you delay is that many days less that you learn. Many will incur a loss on their first investment. But the resulting knowledge and 'feel' for the whole concept more than covers that loss.

I usually take at least a year to finally appreciate the value of an investment. But you need to get your feet wet ASAP. Set up a small account most anywhere (ie a discount brokerage) to start learning what nobody can teach you. Then in a year you may appreciate some key investments.

Understand the difference between a retirement accounts (for all investments) verses a regular account (which is also for all types of investments). Those accounts can invest in anything (depending on the broker who holds those accounts).

You will not do the necessary one or two minutes every day keying on new details (information) if you do not have something invested. For example, 100 shares of Ford at $1300 means you will learn quickly the how much valuable information was always around you only because you now key in on the word 'Ford'. Once you have something invested, then lessons will come paying attention to any story only about your one tiny investment. Ie what that bystander thought about the product. That is how you learn investing. Something that nobody can teach you. How to really appreciate the value and massive rewards when investing. And how much valuable information was always around you - but you had no previous reason to pay attention.

Even purchasing 100 shares of SPY - a SPDR - means you are now paying attention for one minute every day. Therefore learning more than you thought possible. Do a tiny investment somewhere ASAP so that you will start learning things nobody can teach you. You cannot learn (appreciate) anything significant without at least some wet toes.

One friend learned to be a financial advisor. His training at night classes took three months. Then he was a fully trained financial advisor.

He is taught what to tell you. And what he cannot legally tell you. So he recommended leasing a car rather than buying it so that you can have a new car every three years. That is not prudent investement advise. But that is what the company taught him to tell you.

IOW he was educated to be a salesman. There were things to learn from him. And other things he said that only enriched the firm.

But you do need to get your feet wet. That means starting ASAP with something tiny. It will take you at least a year of wet feet to better appreciate, for example, what I am saying.

That's what a mutual fund does: the manager of the fund chooses the stocks for you. When you buy shares in a mutual fund, you are really buying shares in two dozen or so stocks. Within that, you can find mutual funds that specialize in certain industries, like real estate, utility companies, small startups, large retailers, etc. Most people I know don't invest in very many individual stocks, unless it's something like an employee stock purchase plan at the company they work for. But then again, like tw said, if there's an idustry that you personally know very well, it may be worth it to stick to choosing your own stocks within that industry. I dabbled in videogame companies for awhile, back when I was close to the industry news and could tell when a company's upcoming release had any substance behind it or was going to flop. But I'm not up-to-date on that stuff anymore, so I don't mess with it.

where is lookout123?

Where is Lookout123?
He's a pro, no advice free
If you want to pick good brains
Pay the dues, enjoy the gains

@ Griff: Ha!

Just pop out a bunch of kids... who will be fighting each other for the privilege of taking care of you in your old age. :haha:

My advice is to buy a bunch of stocks about a year ago.

I have never invested in stock except thru a life insurance annuity. All my money went into farm ground. It was the only thing that gained in value in the recent years.

Hahahhaha!

Yeah. His name rhymes with wiener. He sounds like a dick. :p:

Good idea.

OK, forget retirement and stockmarket. I'm too confused on all that.
Although its a decent idea Nirvana, I don't want to buy anything that can't be moved with me.

This sucks.

Why is it complex? Retirement account. You make changes. Government takes no money. Those taxes instead remain invested in your account. That simple. Conventional account. You make changes. Government takes money in taxes. You have less invested. Why is this complex?

Open a bank account, money market, buy a bond, or invest in stocks. Every one equally complex. Why is it confusing? If you fear stocks, then you must fear banks and something even more complex - credit cards.

thats right, i don't own a single credit card.

Same here. Angry props to you! Comrade.

Pah! Don't be "too confused." Learn!

By not paying attention and taking the time to learn about basic financing, you are opening the door for exploitation by a financial advisor or someone else (like 'Net friends/strangers). Take it one step at a time, learn for yourself, and take charge of your money. It's really not that complicated, unless you have zillions of dollars.