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I know I am about to open a huge can of worms. With replies from, "Invest with my 95 t-bird" or "I got a bridge I can sell you" either one is not really what I had in mind. I am looking for long term retirement investing, maybe 5-20% of my pay for the rest of my working years. I have read in to several different things from the Navy/Marine corps TSP plan to Roth IRA. All of which seem good and solid investment ideas. I just figured that this site has wide range financial and educational backgrounds. Most of the advice and or opinions are relatively sound and once you get past the hilarity the suggestions are often not too far off the mark.

So, my question to my fellow TCCOAers is, if you had 2000$ initial investment with 50-200$ monthly ad vestment what would you consider a good way to go?

I have heard that gold is a decent way to go…
 

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i put $50 per paycheck into a 401k and i get about 2-5% profit.... it's a risk though, as is anything
 

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In regards to your question there are obviously factors that lead to the best answer.

1. You age now and time to retirement.
2. Amount of income you can put towards retirement and is it pre-tax or after-tax
3. Do you have an emergency fund already in place
4. Risk tolerance.
5. Married?, Kids, Spousal Retirement fund? Education Fund?

All these matter. The best advice I can give you (an mind you I'm am a financial advisor) is find someone local to you and sit down with them and go over you situation and let them advise you on what they think you should do. I would also suggest you find a smaller firm that will be more willing to deal with you. Unfortunately, the large Morgan-Keegan, Merril-Lynch type firms tend to only want to deal with individuals with $200,000 or more in investable assets. They really aren't who you want to talk to about STARTING to invest.

That being said you will problably be told to start off in a stable fund for long term as you "anchor" and then as you continue to contribute add more aggressive funds to be able to get more growth and keep you money growing more than inflation does during the time you are investing.

If you would like to discuss this:
Paul Cromley
William E. Hopkins & Associates, Inc.
Jackson, TN
800 610 6869
 

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If you're investing through your company's 401(k) program and your company offers matching funds, then you definitely have to invest through the company's 401(k) and get the match at least. That's free money and giving that up deserves a bonk on the head.

Otherwise, if you're doing it on your own, I've heard good things about the Roth IRA. But personally, I haven't had any experience with personal investing. Everything I've done is through the 401(k).

A primary difference between the 401(k) and the Roth IRA is that the 401(k) is typically funded with pre-tax money and the Roth IRA with post-tax money. (Though you can fund the 401(k) with post-tax money.) Likewise, all money growth that accrues over the years is taxable with the 401(k) and non-taxable in the Roth IRA. Finally, at retirement, when you withdraw money from your funds, it is taxed at withdrawal in the 401(k) plan and not taxed at all with the Roth IRA. Some people believe that this lends an advantage to the Roth IRA because we are currently experiencing record-low income tax rates, and that it stands to reason that when we go to retire, income tax rates will be higher than today. I'm on the fence on that idea because as I see it, after I retire and am pulling money out of my funds, I'll probably be in a much lower tax bracket than when I was working. Also note that putting pre-tax money into a 401(k) will reduce your total taxable income and therefore reduce your income taxes. Let's say for example that someone makes $50k in one year and set aside $5k into a 401(k). Well, this person's taxable income is now no higher than $45k.

Generally, the funds to invest in depend on one's age. The younger one is, the more risk he can take, and his fund choices should therefore be more "stock-heavy". This is higher risk with a greater chance of higher reward. As one gets older, he should move over to funds that are more "bond-heavy": not very risky, but not much for growth either.

When I started at Lockheed Martin several years ago, the company stock was at an abysmal $15/share after that Mars Observer disaster. (Remember that one -- where one group thought some units were in meters and the other group thought they were in feet? Brilliant!) Well everyone thought I was nuts for dumping all of my 401(k) investing into the company stock. Sure enough, slowly but steadily she began ticking upwards. The last I checked, LMT was trading in the low 90s. I got out long before it hit the 90s and diversified my portfolio big-time, but I did make a pretty penny on that scenario. Am I saying you should put all your eggs in one basket? Definitely not. And especially not in one company stock! (Remember Enron?) The key is to diversify. But my main point is, when you're young like I was, you can take special risks like that.

Ohhh... and one of the oft-overlooked things about investing in mutual funds and all that stuff are the fees. There are always fees. Those wonderful people that put together those funds for you and move stocks and bonds in and out of those funds so you can make a buck? They all have salaries. They have to eat too. So always always always look at the total fees for owning a particular fund. You'll probably have to dig up the prospectus to find out what they are. Honestly? I wouldn't do a fund that has a fee higher than 1%. Think about how much 1% compounds over the lifetime of a retirement fund. It's a crapload!!! Generally, when it comes to avoiding high fees, the funds offered by Vanguard Windsor tend to get high marks.

Now I probably haven't given you enough specifics to get started, and primarily because, like I said, I don't have much experience doing the personal investing thing. But maybe there's some info. there that will come into play somewhere down the road.

Happy investing!
John
 

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Max whatever your employer might match on the 401k as mentioned, and have that doing whatever risk you are willing to do, depending on how long you have and how long you need money and how much.

Other types of investments that are good are 529 plans for school for your kids, if you have a significant other than isn't working (and I don't know for sure so just throwing this out there) start a Roth for them.

Even through the big dump the market took this year, my 401k is rocking at around 19%, the stuff adds up, I was light in it when I started out, and still only doing what my employer will match, which will probably be a disadvantange later on.

I went with a financial advisor, be honest with what you want, what you can put away, and what your expenses are. I have my money spread across 8 or 9 different funds, and have it with different fund managers. Since I have some time and want to be agressive, I have a bunch of it in stock funds only, no bonds, or anything like that. It is tough to see it take a huge hit but in the end it if you have the stomach for that sort of thing, it looks pretty good. He has invested my money in a number of different things, and so far so good, I want to retire when I am around 50/55 (when my youngest son should be leavig the nest, man that is sad) and I am focusing on that more than having money now (I mean, I drive a 10 year old car, an 18 year old car, my house payment is less than most peoples car payment, etc).

So I would say go with a pro, think about what you want and when, how much risk you can deal with, the best way to pay for it (class A, B or C funds for example), and more than likely let it do its thing and not try to out guess it unless you want ulcers.
 
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