Do any of you buy stocks/mutual funds?

[roz]

The Pension Protection Act addressed the 529 plans and also made permanent the increased contribution limits for 401(k) plans and continued the catch-up provisions. Without it, all would have expired on 12/31/2009.

Yes the non-qualified withdrawals from a 529 Plan to buy a Porshe are subject to the 10% penalty, just as early withdrawals from IRA's and 401(k)'s.

I know there are special limits if the working spouse is also active in a company retirement plan. Each spouse can contribute $4000 and with income below $75,000 it is deductible. From $75-under 85M it's partially deductible and over $85 is not.

[flygirl813126]

Wow, this thread makes me feel like I know nothing about the future. I am kinda obsessive about planning with money. I currently have money deducted every check (not much, I am on a teacher's salary.) I just went with the representative that many of the other teachers use, since I know absolutely nothing about it. I would love to learn about stuff as we now have 2 salaries.

[Amanda]

Originally Posted by flygirl813126

Wow, this thread makes me feel like I know nothing about the future. I am kinda obsessive about planning with money. I currently have money deducted every check (not much, I am on a teacher's salary.) I just went with the representative that many of the other teachers use, since I know absolutely nothing about it. I would love to learn about stuff as we now have 2 salaries.

That's great that you are contributing to your retirement plan. You probably use TIAA-CREF,right?

My best advise is to learn the basics. I am biased but vanguard is known for educating people on investing and using "plain talk"- no fancy lingo! That's what I love about them. It is the first company to explain investing to me where I could understancd things!

It is a good idea to decide what mutual funds are right for you. Too many invest in what their friend, parent, co-worker, etc does which may not be right for their specific financial situation.

Generally, historical data (1926-present) has shown that money markets return 5% over time, bond funds 6-7%, and stock funds 10% (with investing at least 5 years). Money markets are good if you want to keep the money liquid but they are horrible for long term retirement plans (inflation eats up most of your returns). Keep in mind that the average inflation rate is about 4% so deduct that from the figures above.

[sfblue]

I am sure you have read that diverfication is very important in investing. Also like Amanda said, it is important to have your personal goal and risk level tolerance in consideration. At Fidelity and Vanguard (and other sites), you can take a "test" to see what's your tolerance level.

My own example, I am a big risk taker. So I put almost 100% in stock. Since I was born in another country and not afraid of investing in foreign stocks/fund, I have 35-40% of my IRA/401K in foreign funds esp. emerging market like Indian and China. Emerging markets have been doing well in the past several years. But before that, those market under-performed developed stock markets.

I also diverfy in terms of sectors, small vs. large. So I have defense, energy, REIT, healthcare, multinational, micro growth, etc. I also invest in alternative energy and social responsible funds as I believe in the pricinple behind them. They may not return as high as other funds, but it makes me feel better.

Net net, I totally second what Amanda recommended. Decide what's good for you in terms of goal, risk level and amount of $ you can put away (however small is better than nothing!). Review those factors maybe once a year to see if they have changed. Of course, if you have life change events (marriage, kids, etc.), review those factors as well.

Good luck!

[flygirl813126]

The company my shcool uses is AXA and the program is Equi-Vest. I really don't know much about it. They had me take a survey about risk, and I fell into the high category considering age and such. I know that the money ends up in multiple categories, I get a statement every month, but it really means nothing ot me. I just did it becasue I figured it makes more sense to put it into there then to spend it on McDonald's every month.

[Kristie]

I've learned to accept risk myself...It took awhile but i realized i'm too young to be so conservative and let it slowly build...but then again, i also saw my parents lose a lot of money during the whole down market time so i always thought it was safer to be conservative...

now, i'm pretty darn agressive and i've learned you NEVER put all your eggs in one basket.

Doug and I are doing so well with it all, we're practically millionaires (all assets combined)....and i do have a rainy day fund that is all mutual funds and i'm able to take it out whenever i need it without penalty. So far, in less than 2-3 years i've been able to save up as much as a new cars worth of cash... altho i also put in *a lot* on a monthly basis to help it build as well. Michelle, that might be something you want to look into. you'll gain a lot more with mutual funds than you will with any ol' savings account. but it does need to be at least a 5 yr investment, i think.

and you can get a financial planner involved as most don't charge anything (they get paid by the funds)...you just have to make sure they're on the up and up as far as *what* funds they use. just don't let them sell you whole life insurance! term is always best...

we use AG Edwards to manage our accounts for us. they do a pretty darn good job. but i definitely wouldn't mind learning more on my own as i still, to this day, don't understand all the mumbo jumbo that comes with talking finances (it just goes right over my head!).

one of these days, i'd like to dabble in stocks... my first pick: apple....

[Amanda]

I'm all about low expenses/no loads and will never use a financial adviser. Why should I have somebody taking some of MY money when I can manage it myself?! It is also not a good argument that he's being paid by the fund. That means less of your money is in the market working for you.

I look for mutual funds with low expense ratios. The expense ratios of my funds average .25%; the average in the industry is 1.34% (the last I checked).

[lucky81698]

Originally Posted by Amanda

I'm all about low expenses/no loads and will never use a financial adviser. Why should I have somebody taking some of MY money when I can manage it myself?! It is also not a good argument that he's being paid by the fund. That means less of your money is in the market working for you.

I look for mutual funds with low expense ratios. The expense ratios of my funds average .25%; the average in the industry is 1.34% (the last I checked).

My FIL was paying $10,000/year in "management" fees to Fidelity! You think someone would have told him to list individual names as the beneficiary instead of "estate"! Duuuhhh!

I learned a few things by watching that Suze Orman show. Not what particular funds to invest in, but stuff like, loads, dividends and expense ratios. You can pick up things like that watching those types of shows. That is one reason why I like Vanguard funds so much, no loads and low expense ratios.

[Kristie]

Originally Posted by Amanda

I'm all about low expenses/no loads and will never use a financial adviser. Why should I have somebody taking some of MY money when I can manage it myself?! It is also not a good argument that he's being paid by the fund. That means less of your money is in the market working for you.

I look for mutual funds with low expense ratios. The expense ratios of my funds average .25%; the average in the industry is 1.34% (the last I checked).

how do you figure?

[roz]

I agree with Amanda that there is enough information out there to manage the funds yourself. A planner is getting paid by the funds. So the planner has a vested interest in putting you in funds that pay more. Plus that money which is going to the planner is not staying in your portfolio.