Investing

Discussion in 'Off Topic' started by flyersboy114, Mar 29, 2009.

  1. flyersboy114

    flyersboy114 USAFA Cadet

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    So I will be receiving a couple hundred dollars each month for quite sometime. I am not allowed to spend it. I need to invest it or put it in my savings account. Investing would obviously have better long term effects so thats what I plan on doing.

    Any ideas where I should invest this money?

    Thanks for all responses in advance :thumb:
     
  2. kp2001

    kp2001 USMMA Alumnus

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    A roth IRA would be a decent 'type' of investment to go with as the money you put into the fund is taxed; however, your return on that money is not (as long as you treat it as a retirement fund). Within the roth you could invest in any number of mutual funds. I think index funds are a good idea for long term investing as these follow the overall market.

    If you don't want to use the money for a retirement fund you could choose from any number of options, but you could really set yourself up well if you put this money directly into a retirement account and don't touch it.
     
  3. packermatt7

    packermatt7 USAFA Cadet

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    Yeah I've got a stash of money in the bank and was thinking of investing as well. I'm thinking of using it for retirement/distant future.
     
  4. RaptorDad2013

    RaptorDad2013 Member

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    Remember, a Roth needs earned income -- but a regular IRA may work. And you may need to be 18 in some jurisdictions or else have a "trustee" account of some sort -- but you are on the right track. Do your folks have a trusted financial adviser? There are so many opportunities right now. On the other hand, there are lots of considerations -- inflation coming? Some think so. Index funds? This might be the time. Even certain bonds are good.

    KP's got good advice -- there's an old saw about the person who invests $2000 only once in an IRA at age 21 -- and another who invests $2000 a year, year after year, starting at age 30 -- and which do you suppose has more (given similar interest rates over time) at age 65? The one who invested only $2K at the earlier age! (The "magic" of compounding!)

    Do your homework. There are lots of ways to do this but it is better if you learn while you are doing -- it will pay dividends -- literally -- down the road!
     
  5. kp2001

    kp2001 USMMA Alumnus

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    very good point....a cadet's income would count for this right? I forget if there is a minimum income needed.

    I think the best advice on this thread would be to find a trusted advisor who can help you through all the various possibilities as you may be in a very unique situation.

    Also, does anyone know if cadets are allowed to partake in the TSP? If so you would want to let your advisor know this as it may change things a little.
     
  6. Just_A_Mom

    Just_A_Mom Member

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    ^
    kp2001 - I believe you are right, a cadet's income would count for a ROTH Ira as it is earned income as reported on a W-2. (even if the "take home" is not = to $200/month).

    Of course, RaptorDad - I am not sure that old saw accounts for the market crashing twice betweein 18 and 65! (lol)

    I would contact a financial advisor.
     
  7. Luigi59

    Luigi59 Banned

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    Daily Racing Form

    #1 in short-term investments. :thumb:
     
  8. flyersboy114

    flyersboy114 USAFA Cadet

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    thanks kp! I didn't even think about this, sounds like a good plan :thumb:

    Thanks Raptor! I am already 18 so no worry over that. My parents are friends with a financial adviser, Ill tell my dad to ask him a few questions. Thanks again :thumb:

    Haha :yllol: Im not sure that would work for me :thumb: Thanks though, Luigi!

    Thanks TPG, that makes sense! Another point that I can bring up with my parents:thumb:

    Thanks for all the advice!
     
  9. Pima

    Pima Parent

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    One great point about a ROTH is that you do not get hit for purchasing your 1st home with those funds. Just b/c VA gies 100% funding dosn't mean you can't still put money down to lower the payment.

    One other thing you might think of for safety reasons is purchasing CDS. The rate is much lower, but easier access if you ever want/need to get at it quickly
     
  10. hornetguy

    hornetguy USAFA Cadet

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    We are not allowed to partake in the TSP yet.

    Our income is sufficient, I have a Roth IRA myself.

    Some good funds, IMO (not a financial adviser! beware!):
    USSPX
    MPGFX
    FCNTX
    And some good stocks (stable and pay DIVIDENDS!)
    MSFT (microsoft)
    XOM (exxon-mobil)
    JNJ (Johnson and Johnson)
    MMM (3M)
     
  11. flyersboy114

    flyersboy114 USAFA Cadet

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    Thanks hornet!
     
  12. Gen2

    Gen2 Member

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    I agree with the advice that fully adding these extra funds to a retirement based account would not help you prepare for what will happen in the meantime.

    www.ingdirect.com has money markets with a decent rate of return. This allows you to have the cash available without waiting or penalties.

    After you build up some cash, you can ladder CDs to mature each month to always have access to cash each month.

    The problem with taking funds from an IRA is you can't put them back! Know that there are ways to get cash out of a Roth IRA without penatly, but it should not be used as an investment vehicle for a house or education.

    www.vanguard.com has the lowest mutual fund fees around. Unfortunately, the entrance price if $3000 per account.

    Also understand the advantages to dollar-cost averaging when purchasing stock-based products. And know that buying a little stock here and there along the way doesn't make much sense if it costs you $8 to buy $100 worth of stock.

    Automatic Millionaire is a good book about the slow and steady method of growing wealthy.
     
  13. 2012Cadet

    2012Cadet Member

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    Wouldn't a Roth be better than a regular IRA since in a Roth you put in "taxed money", but earnings are tax-free, and in an IRA you pay tax when you take it out on both initial investment and the earnings?
     
  14. hornetguy

    hornetguy USAFA Cadet

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    You are correct. That's why I have a Roth and not a traditional!
     

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