Ask MetaFilter questions tagged with Money and investments

Should my recession dollars go into my 401k, or my wallet?

logovisual — Tue, 17 Feb 2009 15:03:38 -0800

Where is my money doing me, and the world, the most good right now: going into a 401(k), or going into my wallet and getting spent? I'm in my mid-twenties, in a stable but low-paying job that I expect to be in for a while (he said, in a fashion that he hopes does not prove ironic). I am basically living paycheck to paycheck in NYC -- not starving, but not really saving in any meaningful way whatsoever beyond my company 401(k), which has quite a good matching program. For the last couple of years, I've been paying the maximum match into my account, and had built up a reasonable little stash (about a third of my annual salary) only to, of course, watch it take a 30%+ hit over the last few months. I only have a couple thousand dollars in credit card debt, which I would like to pay down/off, but the tight squeeze for what's left over from my paycheck doesn't really allow for that.

I was rebalancing my 401(k) into some less aggressive investments today -- I know that I am young, and there'll be plenty of time for a rebound, but there's no sense in wasting money when you know the market is probably still on its way down -- and began to wonder where my dollar is doing the most good for the economy: going into investments, or going into my wallet to be spent on consumer goods? And yes, that definitely is where it would go if I reduced the percentage of my paycheck that goes into my 401(k): food, home goods, etc.

Thoughts on this matter? I am obviously loath to give up much of the "free money" that comes from a company match, but I am also loath to watch every dollar I put into my 401(k) turn into sixty-five cents when it could turn into a dollar's worth of food, or furniture, or entertainment. And on the larger scale, do I help America more by buying a new couch instead of another share of a mutual fund? Should I reduce (not eliminate) my contribution to my 401(k)? Or stick to business as usual and try to make my budget work another way? I'd like to hear some thoughts that go beyond the conventional wisdom of "you should never ever stop paying into your 401(k)," unless you can make me see that argument in a whole other way.

How do I start investing my money?

curiouskitty — Sat, 31 Jan 2009 19:48:04 -0800

My New Year's resolution is to develop a grown-up financial plan for myself. What should I be doing in terms of investments? Please spare some financial advice for a total beginner. Some background info: I'm 29 years old, have a steady income and have managed (finally!) to amass some savings. Not a lot, but it's a start. For a number of reasons, I've never gotten financial advice from anyone. I bank almost exclusively via ATMs and online, and I now realize I don't know what I am supposed to be doing to make the most of my money. Beyond my savings accounts, right now my current "strategy" basically consists of a modest RRSP (I'm Canadian). My husband and I also own a condo (and have a sizable but manageable mortgage). He has a well-paying job but also quite a bit of debt, which we hope to finally clear off this year. I'm otherwise debt-free, and we have nobody to care for financially besides ourselves.

I have read that this current economic climate presents an opportunity for potential investors, in that there are some bargains to be had. Also, the Canadian government just introduced TFSAs (Tax-Free Savings Accounts), which allow people to invest in securities and the returns are never taxed. I am clueless about investments, but I've been thinking for a while that I should buy some stocks for the sake of diversifying and I'm young enough to tolerate some risk right now. I would be comfortably playing with $6,000, maybe a bit more. My questions:

- Is getting involved in the stock market a good idea right now, given our situation? Or should I be putting my savings into 1) a lump-sum mortgage payment, 2) against my husband's debt or 3) some other strategy I haven't thought of? I am very reluctant to pay off my husband's debt on his behalf, since he is prone to splurging on stuff and I don't want to "bail him out" and reinforce his bad spending habits. His parents have, in the past and on more than one occasion, paid off his debts, only to have him rack up more, hence my position on this.

- If buying stocks is a wise idea for me, how should I go about this? Can I trust the financial adviser at my local bank, or would I be getting better guidance from an independent adviser? Do these people have any kinds of biases that I should be aware of? What kind of fees should I expect to pay this person (i.e. what rate is reasonable and what is too much)?

- Would it be incredibly foolish of me, a total amateur, to just sign up with a discount online brokerage and pick my own stocks? I'm admittedly not good with numbers, but I am good with research and I'm reasonably bright. Since the market has been slumping, wouldn't it be good to just pick up some well-reputed stocks and wait for a few years? I know there are no guarantees, but again I can tolerate some risk and am looking for a long-term plan since I'm still young.

- What are some good resources for learning about investing (ideally, content in plain language that even math dunces can understand)?

Thanks in advance for your insights!

Credible returns on investment in virtual world finance?

vizsla — Tue, 12 Aug 2008 21:30:37 -0800

Anybody have experience in investing in virtual world banks/businesses/markets (such as those in SecondLife.com etc)? Do they provide a serious way of making a sensible risk/reward on five or six figure investments? I have found discussion of investing in virtual worlds in this article for example which concludes its very high risk but maybe someone has heard of a viable diversification strategy out there?

What is a fair price?

ubiquity — Wed, 11 Jun 2008 03:27:40 -0800

How do I assess the value of an offer I received for an investment I own? I own a tiny interest in some property which produces oil revenue — about $125 per quarter. I have been offered $2,140 for it. How can I assess the value of this offer? At 5% annually, the future value of $125 per quarter overtakes that of $2,140 in about five years, but I don't have a good feel for what that means in terms of the fairness of the offer. Obviously, if someone offered me more than $12,000 for the property, I'd take it, because the quarterly interest (again, at 5%) on $12,000 is $125. On the other hand, $125 is clearly too little, because I can get that much from my investment in a single quarter. So a good price is somewhere between $125 and $12,000. But where? If there are any good rules of thumb for dealing with this sort of problem, please tell me.

Please help me decide between Fidelity and Vanguard.

salvia — Sun, 06 Apr 2008 16:37:09 -0800

Questions about opening a Roth IRA -- particularly, does it matter where I open it? If so, Fidelity vs. Vanguard? I want to open my first Roth IRA. I've read past questions and some online resources, but I still have some questions.

- First, does it even matter where I open it? If I figure out I screwed up, how hard is it to switch from one of these to the other?

- I will (very soon) have a 403b with Vanguard through my employer. Does that tilt things in favor of Vanguard for an IRA? Would I be able to "pool" these funds? It sounds nice to make one phone call rather than two. But is there some reason that tilts things in favor of Fidelity? Would it be better to have them both as options? Then I could hold, say, some of both group's target retirement funds.

- To make a good decision, do I need to figure out where I would invest the money first? They have different expense ratios even for their S&P 500 index funds (VFINX is .15% vs. FSMKX is .10%). I realize this isn't much of a difference, but if they differ on the simplest index fund, they're going to differ by more in other things, right? (I'd be deciding between S&P 500 index funds, some index fund with non-US companies, or a target-date retirement fund.)

- If you do think I should decide where to put the money first by actually looking at fees, how do I find that out? There are these scare stories (eg) about hidden fees. Are they still hidden if I look at Morningstar's front load %, back load %, and expense ratio? Or is there a better place to find all this out?

- All over the web people are saying that Fidelity's customer service is better and more informed. This has me leaning toward Fidelity. Do you think this still holds true?

- Lastly, what does this comment from jak68 mean, "Also -- in case you didnt know -- there is a small difference between buying funds via a trading account at a brokerage house (as with fidelity, schwab, ameritrade etc), VS. buying the fund directly from the fund family's website (vanguard, etc)?" Should this influence me in some way?

Thanks for your help. I'm interested in learning more over the long term, but I also have the feeling that I'm making this too complicated and should find a way to make this simple.

Interesting investment strategy?

mateuslee — Tue, 13 Nov 2007 03:22:17 -0800

How can I wisely invest US$15k? I have an unconventional idea, but could use your advise: buy land in new EU countries. Of course the obvious safe-bet for an investment portfolia is a mix of C.D.s and mutual funds, right? I guess the return on mutual funds should be around 9%, depending.

However, my idea was this: land. What if I were to buy land in those countries on the verge of accepting the Euro - namely Poland/Romania, for example. These countries (esp Poland) seem pretty stable and the transition to the Euro should be straight-forward and easy (esp given the recent elections in Poland: pro-EU).

Surely after the switch from the zloty, the prices will rise as they did in most other countries, and there will always be a need for land, right?

OK, 12K can't buy much - but a few acres near the sea or outside some medium-sized city might prove lucrative one day... no?

Not sure if this is wise... Any other ideas for creative/non-conventional uses for this money are appreciated, so long as they are lucrative, practical and don't contribute to the military/industrial complex (sorry for sounding like a hippy).

Thanks!

Getting Started in Investing

blim8183 — Wed, 01 Nov 2006 18:43:02 -0800

I just got out of college and started my first job and am looking into investing some money and learning what the stock market is all about. What's the best way of going about doing this? To begin I'm looking at putting away around $500. Is that too little to begin with? What are my options?

I want to make some money duing the hours / day I spend on the internet.

dawdle — Sat, 14 Oct 2006 21:27:16 -0800

What's with these FOREIGN EXCHANGE programs / workshops that I've recently seen advertised in infomercials recently ? Can one really make money doing this ? Do I need a lot of capital ? Have any mefites any experience or insight ?

Investing for my daughters future

the_epicurean — Tue, 05 Sep 2006 07:14:46 -0800

A question for UK based Mefites... My girlfriend has recently given birth to our first child, and we've received our £250 surestart from the government. I'd like to invest this money sensibly, in an account that pays good interest, allows me to top up whenever I want, and restricts access until my daughter is 18. Does anyone have any experience and recommendations. Thanks in advance

Where do I find investors?

Galen — Thu, 13 Jul 2006 11:28:00 -0800

MoneyFilter: Where would a 21 year old college student look for investors willing to help said student get started building wealth? I'm 21 and I want to build houses on vacant lots in cities near where I live. I am fairly sure (though I have excellent credit) I can't qualify for a $200,000 construction loan (even interest only).

So, I need people with money to help me through the first two or three projects. How do I meet these people? Where do I find an investor? What companies that make their business investing in upstarts like me? Are there parties I should be crashing?

I just want a boost into the investing world. I don't want to wait till I'm 30 to start building wealth and cashflow. I have the vision now. Please point me in the right direction.

How to invest against bad times?

Anonymous — Thu, 09 Mar 2006 08:05:22 -0800

I have recently had a windfall and have come into some money. I'd like to invest this in an ethical and profitable fashion without assuming a huge amount of risk. Unfortunately, I am of the opinion that there's going to be some sort of economic collapse fairly soon. What should I do? I feel bad posting this when I know many people here are suffering financially. On the other hand, you're smart and many of you will probably get pleasure from free-associating on this problem.

It's not so much in the scale of things, but it's a couple of hundred thousand dollars and it's probably more than I'll ever see again. I once got a rather smaller windfall and frittered most of it away.

I don't have the time to actively manage this investment on a day-to-day basis, and nor do I wish to do so, thus real estate is probably out of the question -- there are also ethical questions, and practical questions regarding the long-term viability of stratospheric real-estate prices in a post-crash economy.

I already have about a third of it in a bank in Canada (that's where it started, I didn't move it there) and am prepared to deal with the tax implications of this so ideas involving Canadian investments are solicited.

And above all, I won't invest in anything unethically questionable. I'd rather give the money away.

Regarding the perhaps-impending collapse, I see the immediate issues as the massive looting of the US Treasury by the Government, on top of huge financial burdens like Iraq and New Orleans, and an over-inflated housing market; and medium-term, I see serious, permanent energy shortages that will damage the economy for many years to come.

Beginner information on real estate.

JokingClown — Wed, 16 Nov 2005 02:12:24 -0800

I want as many links as can be given for real estate websites. Actually its a little more specific than that. I dont know much about real estate, and its something I would like to know much more about. I dont want any websites that are real estate directories, only websites that have articles about real estate. preferably beginner articles, but thats not necessary. I would also appreciate similar links to articles about other types of investment. Also, any good real estate forums would be helpful. Thanks.

Unloading a loaded mutual fund

acoutu — Tue, 25 Oct 2005 12:03:16 -0800

FinancialFilter: Should I sell my DSC mutual funds now or later? I have some mutual funds that have deferred sales charges. About half of them will be free of the 3% DSC at the end of 2006. The remainder expire in 2007 (those carry 4.5% blended rate DSC right now).

I've held these funds since 2000. They haven't gained at all since then, since some sustained enormous drops in the post-9/11, post-Nortel world, offsetting everything else. A CFA I know recently suggested I sell my funds and put them into ETF. I had been planning to put my funds into ETF when all the DSC expire. However, this guy (who has only a casual acquaintance and nothing to sell me) said that, if I sell and lose the DSC, I'll make it back on the ETF returns, since they have no MER (management expenses).

I know it was stupid to buy funds with DSC. But the financial planner who originally sold these funds was a close friend who convinced me these funds would provide higher returns than the no-load funds at my bank. He also provided incorrect information about when the DSCs would expire. I recognize all this as a mistake now, and so please don't feel a need to lecture me on my stupidity.

What I really need is to know whether I should sell now or wait till some or all of the DSC expires. It's not a small sum of money, so I'm not dickering over $25.

How do I choose a bank for my IRA?

scazza — Wed, 22 Jun 2005 07:05:14 -0800

I want to open a Roth IRA account. How do I choose the bank? These threads have been helpful, but I'm still wondering about the IRA specifically. I've been wondering about this a long time, so any feedback, experiences would be helpful. What banks have mefites had good experiences with their IRAs? Should I just stick with the bank that has my checking account and have it all in one place? Or is investigating other bank's track records with investments imperative? Are there resources for comparing banks' IRA packages other than just visiting their websites and comparing? Why doesn't ING offer IRAs?

Please help this financially ignorant person, and be easy with the snarkiness, I'm an easy target.

A loud flushing sound...

aramaic — Tue, 23 Nov 2004 11:27:23 -0800

FinancialFilter: let's temporarily assume that Stephen Roach is correct, and the US economy is going to collapse. If I have zero debt, but significant dollar-denominated assets, what's my best strategy for handling my affairs? Should I be bulking up on foreign investments, or would they just be dragged down too? Ideas? I'm not a finance wizard, so when someone says "people with debt will be destroyed" it doesn't mean much to me, since I have no debt and don't understand how things ripple throughout the economy.

Investing Online

adrober — Tue, 11 May 2004 22:39:53 -0800

I just graduated law school and have received a significant amount of money in graduation gifts. I'd like to "invest" the money in the market but I have no idea how to do that. I'd like to use online investment software that is very intuitive. Any suggestions?

What Is the Most Financially Profitable Way of Investing $5,000?

geoff. — Wed, 03 Mar 2004 18:19:04 -0800

What is the best thing to do with a small amount of money, around $5,000? Savings interest is almost a joke, CDs look attractive or maybe even mutual funds. Preferably the safer the better, as in investing it all in a high-risk mutual fund and losing it would make me cry. I've checked out "Investment FAQ" and it seems as if CDs are the best. I know little about investing but making money doing nothing intrigues me. What would be an expected return on such an investment? Is it even worth locking the money up for something like $10 a month? This is just out of curiosity really. If I was really serious about this I'd be talking to a paid professional. I was just seeing if $5,000 was really enough to invest in or was it more of a "ha ha ha, investing is only for RICH people". All advice given will be seen as for educational purposes only.

How do I find a financial advisor?

jacquilynne — Sat, 17 Jan 2004 13:35:35 -0800

How do I find a financial advisor? [more inside] Here are the basics of the situation. I live in Toronto. I am trying to save the money to buy a house or condo in 2-3 years, while still putting my money into my RRSP. I'd prefer an advisor who is more interested in advising me on how to balance decisions like "RRSP v. House fund" than on selling me whatever mutual fund he's getting the best commission on, and I'd be willing to pay upfront in order to get that.

Do such advisors exist? How much should I expect to pay them for their services? Would it make sense to then go and buy actual investment products somewhere else, to avoid the commission conflict of interest? How do I know if they're good or bad?