Investing for those under 40 or so?

[daveswoodhauler]

At 21 I bought a farm. Cost me 200,000. Made 100,000 in equity when I bought it. Financed it for 30 years. Didn't have a dime to my name at that time. If I cash rented it out right now, I could make my payment, pay the taxes and put a couple thousand in my pocket. I'm looking at buying a Garn or Econoburn right now. It will give a rate of return as well.

Whay kind of farm do you have? (Crops? Beef?)
Also, able to buy at 21...good deal...where you get your down payment? (just curious)

 

[struggle]

I'm still paying for past mistakes managing my money.

I can't afford to invest anything until I get my debt taken care of. The cost of interest on the debt way outweighs the interest I would earn on any investments right now.

At least I'm learning this lesson now, and not 25 years from now.

-SF

That's the biggest thing most people don't ever learn. I see lots of people who rack up a big mortgage then play in the stock market hoping to make more money than the interest is costing them. Right now my main goal is to pay off debt rather than try to increase income. Nothing annoys me more than paying interest. It's absolutely wasted money.

For the past five years we have been aggressively paying off our mortgage. We as of this past spring paid our house off and are completely DEBT FREE.

It is a feeling that is hard to explain as so few people now days get to experience it. IT is worth all the struggle to become this way.

As for investing we are staying statues quo and maximize our IRA contributions for tax breaks. The left overs go into a account earning a big 2+%. When things start to swing back up then we might go back into some index stocks but me thinks the market is still headed down more for the next year or two.

 

[JustWood]

With record unemployment increasing weekly,mortgage failures increasing,bankruptcies of huge companies increasing,corporate fraud increasing, and almost new record lows on the market almost on a weekly basis for the last 6 months a person must be insane to invest now. I'm holding out putting any more money into the market until these type of indicators start to reverse.

 

[myzamboni]

I'm only 27 but I don't feel like that disqualifys me from this conversation.

I have never believed in owning paper. Like someone said above, if the house of cards falls, paper means NOTHING! I told my girlfriend a couple years back NOT to get involved in 401k. I begged my Mom a few years back to pull hers out and pay the tax. Hard earned money invested by someone else who knows no more about markets than you. WTF is an investment banker, anyway? Asking a magic 8 ball will get you just as close. I really believe we are FAR FAR FAR away from hitting bottom. I predict the Dow will be below 3000 by next winter. This whole banking/government fiasco goes much deeper than they let on. I saw this coming years back and I'm a dumb farmer. My heart goes out to you people who worked their whole lives for retirement to be robbed of it. I play on the commodity futures occassionally but I like physical ownership.

At 21 I bought a farm. Cost me 200,000. Made 100,000 in equity when I bought it. Financed it for 30 years. Didn't have a dime to my name at that time. If I cash rented it out right now, I could make my payment, pay the taxes and put a couple thousand in my pocket. I'm looking at buying a Garn or Econoburn right now. It will give a rate of return as well.

So how bout you older guys send me 800,000. I know of 230 acres for sale. Sell off the house/barn/bin can lower that to 700,000.You use your 401k to buy it. I'll write you a check for 31,000 every year for cash rent. Return on Investment EVERY YEAR. Plus it's something you can pass down to your children to generate income. It does require a little management, but with a good tenant (me) we both can make money.

Plus if inflationary times are coming land values increase, just like this past summer. Equity is power.

If I was to buy stocks I'd pick companies that actually produce a physical product. Fertilzer, Oil, Chemical, Tires etc. Alot of people are saying buy gold right now. Paper gold isn't the same thing as buying physical gold. At least if the market crashes you do have something of true tradeable value.

Just how I see it, no disrespect.

so instead of diversification you want to gamble on real estate values holding and the commodity market playing in your favor? Does not sound much safer than a 401K. The key is to invest in what you understand. I hope your mom moved her funds into the more conservative selections her 401K offers instead of pulling it out and getting nailed with the tax as it is a better approach.

 

[stee6043]

As for investing we are staying statues quo and maximize our IRA contributions for tax breaks. The left overs go into a account earning a big 2+%. When things start to swing back up then we might go back into some index stocks but me thinks the market is still headed down more for the next year or two.

In the past 25 years 95% of the accumulated wealth made by stock market investments (whether they are stocks, bonds, mutual funds, etc) have been made on 1% of the trading days. Waiting for things to swing back up is pretty much a loosing proposition. You gotta get in and stay in!

 

[Shipper50]

I have one bit of advice for younger investors. Start now, don't look at it everyday, diversify, live a long life and when you get old enough,have a cold one and think of me. ;-)

Shipper

 

[daveswoodhauler]

I have one bit of advice for younger investors. Start now, don't look at it everyday, diversify, live a long life and when you get old enough,have a cold one and think of me. ;-)

Shipper

I'll have the buddy to the left have a cold one for you too

 

[mainstation]

I am done with letting others manage my retirement fund a.k.a RRSP's and Mutual funds. My advice is fix your house up, it is your greatest investment(probably). My next move would be to invest any extra $$ and buy a rental house. Bricks and Mortar, safe as houses and all that. At least with House insurance, if it burns down, you are still covered for the amount you want to insure it for and pick your premiums.

 

[ROYJ24]

I invested in 401K, then borrowed from it before market plunged. Now I'm paying it back & getting shares cheaper.
Used loan for buying home. Sometimes it's better to be lucky than good.

 

[SolarAndWood]

Take a good hard look at the options in your retirement plan and find the cheapest way to buy the market. This will be in the fine print of the fees for each of the funds you have access to. Most plans now have an inexpensive way to buy the S&P;or QQQ if you have access to ETFs. No one beats the market in the long run except the guy who whacks your retirement account for fees. Outside of your retirement, the population grows and there is only so much land and so much energy, choose wisely.

 

[mn_jon]

there are two schools of thought on this :

1. keep investing the same all of the time, only changing the risk level as your retirement is near (7 years or less away)

2. sell off everything and prepare for total collapse of society (like in Mad Max !)


I guess I am somewhere in between, i've developed an emergency fund (thanks suzie orman), don't carry any debt except the mortgage, and most importatly CONTROL MY SPENDING. Geez, advertisers would have you spend your last dime on worthless crap you don't need !

 

[boostnut]

If you're between the ages of 20 and 50 and not currently taking advantage of an employer match with your retirement plan I'd say your f'n crazy. You're giving yourself a raise, its that simple. Say your employer agrees to match 5%, take it, its a 5% raise. No, you dont see it on your paycheck but it'll be there in the end (we hope). The 50 cent gas example back a couple pages is right on. There are bargains out there now, some risky some not. My goal has always been to not work for my money but to have my money working for me. At the ripe ol age of 32 I'm starting to see some serious results. The only debt the wife and I have is less than 100k on a house. No credit card balances carried over, school debt paid for..... Seriously, if you can't afford to invest 5% or so of your income you aren't likely livin right. Yeah, I understand there are a variety of exceptions. People are laid off, hours are cut back at work, etc. but if you're working full time about 5% shouldn't change your lifestyle. The best advise I've ever been given is this: The best time to invest is whenever you have the income to do so. Dont know about ya'll but I'm not working thru my 60's.

 

[jklingel]

Yes, everything is on sale now. Buy what you can afford. Buy WHAT? I spent many years, like many of us, reading, thinking, reading more, investing in "quality" mutual funds, some stocks, etc, and have come to this conclusion: The S&P;500 is where "it" is at. Find me a fund that has beaten the S&P;500 for many years, and I'll show you a fund (that one) that will soon tank and trail it. Many years have I looked at XXXX Magazine's (money guru types) hot funds, and then looked at their long term records; ho hum. Then watch them for a while; they all fall. Index funds are cheap to manage, too, which puts more money into your pocket. CHALLENGE: If anyone knows any mutual fund manager(s) who will GUARANTEE that they will beat the S&P;500 for the next 20 yrs, I'd like to give them all my money. They can have their usual management fees PLUS 50% of the difference between their fund's earnings ("in my pocket" earnings) and the S&P;500. It would be a win-win for both of us, but you ain't gonna find anyone who will take up my challenge. Sermon ended. Good luck w/ your investing, and hang in there. If you have sound managers who look for slow, steady growth, you'll be fine. The folks who get their cookies crumbled are the fast-money gamblers. j