Best financing route to take

[DxrkLucy]

Wow, you guys have a lot of knowledge whenever it comes to finacial advice and life plans. I was never taught anything so as of right now all ive been doing is this: i make about 3,000-3,500 every two weeks after taxes. Granted im working 150-170hrs every two weeks.. i only have 2,600$ in bills between me and my wife. I take care of everything. I see how much bills i owe for those two weeks and give myself $200/week so 400 on top. The rest goes into savings. And i just leave it there and repeat on next payday. Ive been doing this consistantly for about a year and before it was just whenever i could. Maybe every other check. However i would love to be more involved in learning how to grow my money better. I see you guys talking about "money market" or "CD" but i have absolutely no knowledge of what any of that is. It seems like no matter how many times someone breifly describes to me these things i cant really wrap my head around it all. But seeing all of you guys' post really insipres me to keep grinding and growing finacially. Really appreciate it! Would love the opportunity to be as well aware as you guys are lol if anybody has ant advice or maybe should i just keep doing what im doing? Idk lol im still learning how to manage better and better each year

Sponsored

 

[Skye]

i have absolutely no knowledge of what any of that is.

I'm going to preface everything that follows by saying I'm not a financial advisor. I'm not certified in any way. Just a general person with some life experience. You'll could get some good, general infromation from us today, but this is not the place to get financially savy. I'll offer some suggestions in the following:

If you have not done so already, create a budget. Most people use a spreadsheet. Some like an actual ledger. You need to account for your inflows and outflows in some fashion; this will give you insight as to how you're getting ahead (or not). It will also help you realize where you might be able to do better.

Always live within your means. It's the only way you're going to get ahead.

Good times, bad times, always set money aside for the future. Find an amount you can consistently save.

For now, at your level, it probably best to park everything in a checking account. General awareness and eduction is probably best for you right now. After you get some more insight, what you have saved you can then invest.

Probably a good time to head to the library/bookstore. Start pulling books and review topics. Stay away from anything exotic; it will be a turn-off and it's unnecessary. Stay away from anything with "rich" in the title. Anything that proposes you'll become a gazillionaire by next week.

Saving and investing is a long-term play. It's often like watching paint dry. It's boring. Yea, you need to watch your money, have good awareness. But if anyone proposes some scheme or how easy and quick it is to make a fortune, it's best to run.

If you don't understand it, if you cannot explain it, don't invest in it.

If you cannot explain why you should invest in something, don't.

A general rule of thumb is to have six to 12 months of monthly expenses parked somewhere. A checking account or Money Market account. Something you can have immediate access to which is safe.

Most checking accounts are insured, but the downside is many pay no interest. If you have $1 in your account and inflation is 5%, at the end of the year you effectively have .95 . Long-term, that's not good. Short-term, it gives you comfort to pay for your immediate needs.

A Money Market account is an interest-bearing account that invests in very short-term financial instruments. It is NOT FDIC insured. There is a risk, slight, it will lose money. The additional risk is compensated in that many Money Markets are paying 4+% right now. These accounts are liquid and you can often write checks against them.

Certificates of Deposits (CDs) are interest-bearing and insured.. They pay possibly a bit more interest than a Money Market. But the CD is a contract, a commitment, to lock those funds with the provider, for six months to five years.

Goals, needs and timelines. All the topics in this post relate to goals and timelines.

I'd like a new fridge. I need to replace it this Summer. Whatever money I can save in that is going into Checking. I'm going to retire some day, I've got some money for that. Those dollars are going into some of the more riskier and volatile things.

Most short-term needs, 1-3 years lets say, belong in short-term instruments (checking, Money Market, CDs). Further out, 3-5+ years, it allows one to ride out volatility. I need my fridge and we're in a recession. I've got that, in Checking. I'm saving for retirement, the economy and US market has been going way down the last several months. But I'm not going to retire for another 20 years. Whatever. If anything, it might be a great time to buy or invest in things at a discount. Everyone likes a sale.

Long timelines give people an advantage to invest in things which pay better (stocks and bonds). The risk with these instruments is they can be volatile and you can lose money, potentially all of it. Long-term, things tend to smooth out and net gains. Stocks and bonds are not insured.

The advantages of stocks and bonds is, while riskier, you're compensated for that risk. You invest $1. You earn .07, grossing $1.07. Inflation is a cost, currently 5%, or thereabouts, reducing purchasing power. $1 + .07 - .05 = $1.02. Now you've earned something, over and above what inflation has taken away. And compounding that over time can allow you to get much further ahead. In the Checking account mentioned earlier, you were short money.

This also ties into the notion of risk. Checking is boring, but that's your immediate needs, what you know is coming up. Stocks, bonds and other items often take years to work. You have good times, bad times, but in-general, overall, you net positive and gain, compounding all the way.

Stocks are shares in companies where the shareholder owns a piece of that company, the idea, the product and profits. As the company grows and makes money, so do the shareholders.

Bonds often are loans a company seeks and secures with their physical assets. Plant, product, land, etc. Often because physical assets are involved, bonds are relatively safer than stocks. Bonds in-general pay less.

Asset allocation is how an investor divides and invests their funds. Short-term probably goes to checking, Money Market, CDs. Long-term, for retirement maybe, is often divided amongst stocks and bonds. Asset allocation can also involve overseas investing, maybe investing in an index fund that purchases only companies outside the US. Eighty percent of the global economy is outside the US.

Diversification. Stocks, bonds, US, overseas. Spreading your risk out over a variety of instruments often lessens risk while improoving returns. The US is going to have a recession. I can garauntee that. When, IDK. But when the US does, others countries might be doing very well. While you'll lose in the US, you could gain elsewhere.

Risk Tolerance. Everyone has a different amount risk they can tolerate. Age is often a big driver. There are questionnaires you can take on-line. Younger people can generally tolerate more risk. Older people, less. But a young single mother with a kid, younger. Maybe less still. Everyone is different. Only invest in what you can risk, what you're comfortable with. This can change over time, as you educate yourself more. Early on, it's probably more awareness and safety first.

I think maybe some good goals right now are:

1. Create and maintain a budget

2. Save and set aside six-12 months of expenses in a Checking or insured account. Something liquid

3. Consistently save something from every paycheck; consider this money spent or gone. It's for retirement or something else

4. Start reading, learning, educating yourself. You aren't sure what some of this stuff is. Dive in. Start Googling. Look in the library or book store

I understand you might be doing some of these things now. Great.

Over time your going to develop a foundation and you can explore other things (stocks, bonds, funds, etc.)

Once you have something committed for the long-term, something you can invest, seek out companies like Vanguard, Fidelity, Schwab and others. These companies will offer funds and instruments at very low rates you can invest in for the long haul.

* Disclosure: I have an active interest in Fidelity. I've been using them for years. They are a fine company, but not the only one offering financial products.

Index funds are often the best way for people to invest in for the long-term. Index funds invest in baskets of stocks and bonds, are not actively traded and cost very little in fees and commissions. You'll learn more about these as time goes on. Several out there are very simple and low cost, which is what most people need, myself included.

Commissions, fees, terms, etc. Pay attention to these. If you were to go to your bank and discuss this topic, they probably have a variety of items to invest your money in. Many could involve fees of different types. This will be disclosed in the applications. Many people invest in things they might have a relationship with or be familiar with. They're comfortable with their banker for example. But what they often don't realize are fees and commissions which might be costing them. You make 7%, but you lose some of that to fees and commissions and net 5%. Someone in an index fund: they net 6.9%. That's a huge difference over the long haul.

Real Estate. I own a house. That's my depth of real estate investing. I'm not a fan of real estate investing because it's a very illiquid instrument. I realize some have done very well in this area. Good on them.

Gold. If you buy a dollar's worth of gold, bury it in your backyard and dig it up 100 years from now, it will be worth $1, adjusted for inflation. That's cool. But you haven't made anything from it. You haven't earned anything. So, I don't invest in gold. Some do like putting a portion of their savings in gold to cushion against shocks and disruptions.

Insurance and annuities. Simple term life insurance is all anyone needs. Something that will pay off outstanding debt, cover the funeral, put kids through school, etc. Insurance can be complicated, but doesn't have to be. Annuities: don't. Annuities are a vehicle involving saving, investing and maybe insurance; they are often heavily laden with fees and commissions.

Crypto. No. And it's not a topic I'll be discussing further.

Options, futures, leverage, shorting, hedges and other exotic instruments are unnecessary in building savings for now and the future. If someone proposes you using these instruments, hard pass.

401(k)s and IRAs are vehicles that one can put money into towards retirement. All the things we've discussed thus far (cash, stocks, bonds) can be placed within these entities and dedicated to retirement. There are numerous tax advantages and they are a good thing. You can study these as you have time.

Getting rich. Anyone who chats something up involving getting rich quick, how easy it is, how they made truckloads of money: run from these people.

That's a lot. Could have been overwhelming. That's expected. Budget, park cash, educate. Those three things. There's never a bad time to save or invest. You're not going to miss out. Once you have some more insight, you can move to more long-term things for your future.

Not everyone is going to agree with my guidance. Others will be posting theirs'. I wish you all the best in this topic. Don't be concerned you're missing out and need to immediately jump into something. It's a long-term (probably used that too many times today) endeavor.

 

[S650 GT]

Debt free is the way too be.
Financing stuff is a culture in some countries. They grow up with that way of life and don't see why it is bad.

In my country we don't buy stuff we can't afford.

People here don't like this sentence and will tell me that they CAN afford it, but they choose to finance it anyway so that they still have that money for something else.

Well, that's exactly what I said. You can't afford it if you feel the need to use that money for something else.

But yeah. The land of the great. Where the banks are laughing their asses. Muricah

 

[javiviano]

As delivery gets closer, I would have the dealer give you a financing option (they'll give you their best option) and then also check with a local credit union for sure. Last vehicle I purchased in December, the dealer came up with an obscure credit union that was about 90 minutes away and saved me almost 2 full points vs my every day credit union.

 

[unfairslide]

I'm going to preface everything that follows by saying I'm not a financial advisor. I'm not certified in any way. Just a general person with some life experience. You'll could get some good, general infromation from us today, but this is not the place to get financially savy. I'll offer some suggestions in the following:

If you have not done so already, create a budget. Most people use a spreadsheet. Some like an actual ledger. You need to account for your inflows and outflows in some fashion; this will give you insight as to how you're getting ahead (or not). It will also help you realize where you might be able to do better.

Always live within your means. It's the only way you're going to get ahead.

Good times, bad times, always set money aside for the future. Find an amount you can consistently save.

For now, at your level, it probably best to park everything in a checking account. General awareness and eduction is probably best for you right now. After you get some more insight, what you have saved you can then invest.

Probably a good time to head to the library/bookstore. Start pulling books and review topics. Stay away from anything exotic; it will be a turn-off and it's unnecessary. Stay away from anything with "rich" in the title. Anything that proposes you'll become a gazillionaire by next week.

Saving and investing is a long-term play. It's often like watching paint dry. It's boring. Yea, you need to watch your money, have good awareness. But if anyone proposes some scheme or how easy and quick it is to make a fortune, it's best to run.

If you don't understand it, if you cannot explain it, don't invest in it.

If you cannot explain why you should invest in something, don't.

A general rule of thumb is to have six to 12 months of monthly expenses parked somewhere. A checking account or Money Market account. Something you can have immediate access to which is safe.

Most checking accounts are insured, but the downside is many pay no interest. If you have $1 in your account and inflation is 5%, at the end of the year you effectively have .95 . Long-term, that's not good. Short-term, it gives you comfort to pay for your immediate needs.

A Money Market account is an interest-bearing account that invests in very short-term financial instruments. It is NOT FDIC insured. There is a risk, slight, it will lose money. The additional risk is compensated in that many Money Markets are paying 4+% right now. These accounts are liquid and you can often write checks against them.

Certificates of Deposits (CDs) are interest-bearing and insured.. They pay possibly a bit more interest than a Money Market. But the CD is a contract, a commitment, to lock those funds with the provider, for six months to five years.

Goals, needs and timelines. All the topics in this post relate to goals and timelines.

I'd like a new fridge. I need to replace it this Summer. Whatever money I can save in that is going into Checking. I'm going to retire some day, I've got some money for that. Those dollars are going into some of the more riskier and volatile things.

Most short-term needs, 1-3 years lets say, belong in short-term instruments (checking, Money Market, CDs). Further out, 3-5+ years, it allows one to ride out volatility. I need my fridge and we're in a recession. I've got that, in Checking. I'm saving for retirement, the economy and US market has been going way down the last several months. But I'm not going to retire for another 20 years. Whatever. If anything, it might be a great time to buy or invest in things at a discount. Everyone likes a sale.

Long timelines give people an advantage to invest in things which pay better (stocks and bonds). The risk with these instruments is they can be volatile and you can lose money, potentially all of it. Long-term, things tend to smooth out and net gains. Stocks and bonds are not insured.

The advantages of stocks and bonds is, while riskier, you're compensated for that risk. You invest $1. You earn .07, grossing $1.07. Inflation is a cost, currently 5%, or thereabouts, reducing purchasing power. $1 + .07 - .05 = $1.02. Now you've earned something, over and above what inflation has taken away. And compounding that over time can allow you to get much further ahead. In the Checking account mentioned earlier, you were short money.

This also ties into the notion of risk. Checking is boring, but that's your immediate needs, what you know is coming up. Stocks, bonds and other items often take years to work. You have good times, bad times, but in-general, overall, you net positive and gain, compounding all the way.

Stocks are shares in companies where the shareholder owns a piece of that company, the idea, the product and profits. As the company grows and makes money, so do the shareholders.

Bonds often are loans a company seeks and secures with their physical assets. Plant, product, land, etc. Often because physical assets are involved, bonds are relatively safer than stocks. Bonds in-general pay less.

Asset allocation is how an investor divides and invests their funds. Short-term probably goes to checking, Money Market, CDs. Long-term, for retirement maybe, is often divided amongst stocks and bonds. Asset allocation can also involve overseas investing, maybe investing in an index fund that purchases only companies outside the US. Eighty percent of the global economy is outside the US.

Diversification. Stocks, bonds, US, overseas. Spreading your risk out over a variety of instruments often lessens risk while improoving returns. The US is going to have a recession. I can garauntee that. When, IDK. But when the US does, others countries might be doing very well. While you'll lose in the US, you could gain elsewhere.

Risk Tolerance. Everyone has a different amount risk they can tolerate. Age is often a big driver. There are questionnaires you can take on-line. Younger people can generally tolerate more risk. Older people, less. But a young single mother with a kid, younger. Maybe less still. Everyone is different. Only invest in what you can risk, what you're comfortable with. This can change over time, as you educate yourself more. Early on, it's probably more awareness and safety first.

I think maybe some good goals right now are:

1. Create and maintain a budget

2. Save and set aside six-12 months of expenses in a Checking or insured account. Something liquid

3. Consistently save something from every paycheck; consider this money spent or gone. It's for retirement or something else

4. Start reading, learning, educating yourself. You aren't sure what some of this stuff is. Dive in. Start Googling. Look in the library or book store

I understand you might be doing some of these things now. Great.

Over time your going to develop a foundation and you can explore other things (stocks, bonds, funds, etc.)

Once you have something committed for the long-term, something you can invest, seek out companies like Vanguard, Fidelity, Schwab and others. These companies will offer funds and instruments at very low rates you can invest in for the long haul.

* Disclosure: I have an active interest in Fidelity. I've been using them for years. They are a fine company, but not the only one offering financial products.

Index funds are often the best way for people to invest in for the long-term. Index funds invest in baskets of stocks and bonds, are not actively traded and cost very little in fees and commissions. You'll learn more about these as time goes on. Several out there are very simple and low cost, which is what most people need, myself included.

Commissions, fees, terms, etc. Pay attention to these. If you were to go to your bank and discuss this topic, they probably have a variety of items to invest your money in. Many could involve fees of different types. This will be disclosed in the applications. Many people invest in things they might have a relationship with or be familiar with. They're comfortable with their banker for example. But what they often don't realize are fees and commissions which might be costing them. You make 7%, but you lose some of that to fees and commissions and net 5%. Someone in an index fund: they net 6.9%. That's a huge difference over the long haul.

Real Estate. I own a house. That's my depth of real estate investing. I'm not a fan of real estate investing because it's a very illiquid instrument. I realize some have done very well in this area. Good on them.

Gold. If you buy a dollar's worth of gold, bury it in your backyard and dig it up 100 years from now, it will be worth $1, adjusted for inflation. That's cool. But you haven't made anything from it. You haven't earned anything. So, I don't invest in gold. Some do like putting a portion of their savings in gold to cushion against shocks and disruptions.

Insurance and annuities. Simple term life insurance is all anyone needs. Something that will pay off outstanding debt, cover the funeral, put kids through school, etc. Insurance can be complicated, but doesn't have to be. Annuities: don't. Annuities are a vehicle involving saving, investing and maybe insurance; they are often heavily laden with fees and commissions.

Crypto. No. And it's not a topic I'll be discussing further.

Options, futures, leverage, shorting, hedges and other exotic instruments are unnecessary in building savings for now and the future. If someone proposes you using these instruments, hard pass.

401(k)s and IRAs are vehicles that one can put money into towards retirement. All the things we've discussed thus far (cash, stocks, bonds) can be placed within these entities and dedicated to retirement. There are numerous tax advantages and they are a good thing. You can study these as you have time.

Getting rich. Anyone who chats something up involving getting rich quick, how easy it is, how they made truckloads of money: run from these people.

That's a lot. Could have been overwhelming. That's expected. Budget, park cash, educate. Those three things. There's never a bad time to save or invest. You're not going to miss out. Once you have some more insight, you can move to more long-term things for your future.

Not everyone is going to agree with my guidance. Others will be posting theirs'. I wish you all the best in this topic. Don't be concerned you're missing out and need to immediately jump into something. It's a long-term (probably used that too many times today) endeavor.

Nothing to add just wanted to say this is a great write up!

 

[Rio Lobo]

Wow, you guys have a lot of knowledge whenever it comes to finacial advice and life plans. I was never taught anything so as of right now all ive been doing is this: i make about 3,000-3,500 every two weeks after taxes. Granted im working 150-170hrs every two weeks.. i only have 2,600$ in bills between me and my wife. I take care of everything. I see how much bills i owe for those two weeks and give myself $200/week so 400 on top. The rest goes into savings. And i just leave it there and repeat on next payday. Ive been doing this consistantly for about a year and before it was just whenever i could. Maybe every other check. However i would love to be more involved in learning how to grow my money better. I see you guys talking about "money market" or "CD" but i have absolutely no knowledge of what any of that is. It seems like no matter how many times someone breifly describes to me these things i cant really wrap my head around it all. But seeing all of you guys' post really insipres me to keep grinding and growing finacially. Really appreciate it! Would love the opportunity to be as well aware as you guys are lol if anybody has ant advice or maybe should i just keep doing what im doing? Idk lol im still learning how to manage better and better each year

Not to be the sky is falling guy, because I rarely ever am. But sounds like you're socking away really good chunks of money. Even if you're not investing in anything, I would at least be sure all your money is not in a single account, especially your general purpose checking account. If you get hacked or fraud, a good bit of it could be gone before you find out. And recovering it could be a bit tricky. This would be a good opportunity to open up the aforementioned money market savings and probably even a CD or 2.

 

[Coloradoeco]

Thankfully my house repairs have made purchasing a new car a pipe dream for the foreseeable future, I’ll keep my current one till the wheels fall off or when rates go back under 2%.

 

[Smaaron]

I'm going to preface everything that follows by saying I'm not a financial advisor. I'm not certified in any way. Just a general person with some life experience. You'll could get some good, general infromation from us today, but this is not the place to get financially savy. I'll offer some suggestions in the following:

If you have not done so already, create a budget. Most people use a spreadsheet. Some like an actual ledger. You need to account for your inflows and outflows in some fashion; this will give you insight as to how you're getting ahead (or not). It will also help you realize where you might be able to do better.

Always live within your means. It's the only way you're going to get ahead.

Good times, bad times, always set money aside for the future. Find an amount you can consistently save.

For now, at your level, it probably best to park everything in a checking account. General awareness and eduction is probably best for you right now. After you get some more insight, what you have saved you can then invest.

Probably a good time to head to the library/bookstore. Start pulling books and review topics. Stay away from anything exotic; it will be a turn-off and it's unnecessary. Stay away from anything with "rich" in the title. Anything that proposes you'll become a gazillionaire by next week.

Saving and investing is a long-term play. It's often like watching paint dry. It's boring. Yea, you need to watch your money, have good awareness. But if anyone proposes some scheme or how easy and quick it is to make a fortune, it's best to run.

If you don't understand it, if you cannot explain it, don't invest in it.

If you cannot explain why you should invest in something, don't.

A general rule of thumb is to have six to 12 months of monthly expenses parked somewhere. A checking account or Money Market account. Something you can have immediate access to which is safe.

Most checking accounts are insured, but the downside is many pay no interest. If you have $1 in your account and inflation is 5%, at the end of the year you effectively have .95 . Long-term, that's not good. Short-term, it gives you comfort to pay for your immediate needs.

A Money Market account is an interest-bearing account that invests in very short-term financial instruments. It is NOT FDIC insured. There is a risk, slight, it will lose money. The additional risk is compensated in that many Money Markets are paying 4+% right now. These accounts are liquid and you can often write checks against them.

Certificates of Deposits (CDs) are interest-bearing and insured.. They pay possibly a bit more interest than a Money Market. But the CD is a contract, a commitment, to lock those funds with the provider, for six months to five years.

Goals, needs and timelines. All the topics in this post relate to goals and timelines.

I'd like a new fridge. I need to replace it this Summer. Whatever money I can save in that is going into Checking. I'm going to retire some day, I've got some money for that. Those dollars are going into some of the more riskier and volatile things.

Most short-term needs, 1-3 years lets say, belong in short-term instruments (checking, Money Market, CDs). Further out, 3-5+ years, it allows one to ride out volatility. I need my fridge and we're in a recession. I've got that, in Checking. I'm saving for retirement, the economy and US market has been going way down the last several months. But I'm not going to retire for another 20 years. Whatever. If anything, it might be a great time to buy or invest in things at a discount. Everyone likes a sale.

Long timelines give people an advantage to invest in things which pay better (stocks and bonds). The risk with these instruments is they can be volatile and you can lose money, potentially all of it. Long-term, things tend to smooth out and net gains. Stocks and bonds are not insured.

The advantages of stocks and bonds is, while riskier, you're compensated for that risk. You invest $1. You earn .07, grossing $1.07. Inflation is a cost, currently 5%, or thereabouts, reducing purchasing power. $1 + .07 - .05 = $1.02. Now you've earned something, over and above what inflation has taken away. And compounding that over time can allow you to get much further ahead. In the Checking account mentioned earlier, you were short money.

This also ties into the notion of risk. Checking is boring, but that's your immediate needs, what you know is coming up. Stocks, bonds and other items often take years to work. You have good times, bad times, but in-general, overall, you net positive and gain, compounding all the way.

Stocks are shares in companies where the shareholder owns a piece of that company, the idea, the product and profits. As the company grows and makes money, so do the shareholders.

Bonds often are loans a company seeks and secures with their physical assets. Plant, product, land, etc. Often because physical assets are involved, bonds are relatively safer than stocks. Bonds in-general pay less.

Asset allocation is how an investor divides and invests their funds. Short-term probably goes to checking, Money Market, CDs. Long-term, for retirement maybe, is often divided amongst stocks and bonds. Asset allocation can also involve overseas investing, maybe investing in an index fund that purchases only companies outside the US. Eighty percent of the global economy is outside the US.

Diversification. Stocks, bonds, US, overseas. Spreading your risk out over a variety of instruments often lessens risk while improoving returns. The US is going to have a recession. I can garauntee that. When, IDK. But when the US does, others countries might be doing very well. While you'll lose in the US, you could gain elsewhere.

Risk Tolerance. Everyone has a different amount risk they can tolerate. Age is often a big driver. There are questionnaires you can take on-line. Younger people can generally tolerate more risk. Older people, less. But a young single mother with a kid, younger. Maybe less still. Everyone is different. Only invest in what you can risk, what you're comfortable with. This can change over time, as you educate yourself more. Early on, it's probably more awareness and safety first.

I think maybe some good goals right now are:

1. Create and maintain a budget

2. Save and set aside six-12 months of expenses in a Checking or insured account. Something liquid

3. Consistently save something from every paycheck; consider this money spent or gone. It's for retirement or something else

4. Start reading, learning, educating yourself. You aren't sure what some of this stuff is. Dive in. Start Googling. Look in the library or book store

I understand you might be doing some of these things now. Great.

Over time your going to develop a foundation and you can explore other things (stocks, bonds, funds, etc.)

Once you have something committed for the long-term, something you can invest, seek out companies like Vanguard, Fidelity, Schwab and others. These companies will offer funds and instruments at very low rates you can invest in for the long haul.

* Disclosure: I have an active interest in Fidelity. I've been using them for years. They are a fine company, but not the only one offering financial products.

Index funds are often the best way for people to invest in for the long-term. Index funds invest in baskets of stocks and bonds, are not actively traded and cost very little in fees and commissions. You'll learn more about these as time goes on. Several out there are very simple and low cost, which is what most people need, myself included.

Commissions, fees, terms, etc. Pay attention to these. If you were to go to your bank and discuss this topic, they probably have a variety of items to invest your money in. Many could involve fees of different types. This will be disclosed in the applications. Many people invest in things they might have a relationship with or be familiar with. They're comfortable with their banker for example. But what they often don't realize are fees and commissions which might be costing them. You make 7%, but you lose some of that to fees and commissions and net 5%. Someone in an index fund: they net 6.9%. That's a huge difference over the long haul.

Real Estate. I own a house. That's my depth of real estate investing. I'm not a fan of real estate investing because it's a very illiquid instrument. I realize some have done very well in this area. Good on them.

Gold. If you buy a dollar's worth of gold, bury it in your backyard and dig it up 100 years from now, it will be worth $1, adjusted for inflation. That's cool. But you haven't made anything from it. You haven't earned anything. So, I don't invest in gold. Some do like putting a portion of their savings in gold to cushion against shocks and disruptions.

Insurance and annuities. Simple term life insurance is all anyone needs. Something that will pay off outstanding debt, cover the funeral, put kids through school, etc. Insurance can be complicated, but doesn't have to be. Annuities: don't. Annuities are a vehicle involving saving, investing and maybe insurance; they are often heavily laden with fees and commissions.

Crypto. No. And it's not a topic I'll be discussing further.

Options, futures, leverage, shorting, hedges and other exotic instruments are unnecessary in building savings for now and the future. If someone proposes you using these instruments, hard pass.

401(k)s and IRAs are vehicles that one can put money into towards retirement. All the things we've discussed thus far (cash, stocks, bonds) can be placed within these entities and dedicated to retirement. There are numerous tax advantages and they are a good thing. You can study these as you have time.

Getting rich. Anyone who chats something up involving getting rich quick, how easy it is, how they made truckloads of money: run from these people.

That's a lot. Could have been overwhelming. That's expected. Budget, park cash, educate. Those three things. There's never a bad time to save or invest. You're not going to miss out. Once you have some more insight, you can move to more long-term things for your future.

Not everyone is going to agree with my guidance. Others will be posting theirs'. I wish you all the best in this topic. Don't be concerned you're missing out and need to immediately jump into something. It's a long-term (probably used that too many times today) endeavor.

This is all great advice!

 

[DxrkLucy]

Not to be the sky is falling guy, because I rarely ever am. But sounds like you're socking away really good chunks of money. Even if you're not investing in anything, I would at least be sure all your money is not in a single account, especially your general purpose checking account. If you get hacked or fraud, a good bit of it could be gone before you find out. And recovering it could be a bit tricky. This would be a good opportunity to open up the aforementioned money market savings and probably even a CD or 2.

What should i do in order to open up an aforementioned money market savings? I have most of my money saved away in my savings account. But whats the difference between this and mt savings account already and would this affect me saving up for my s650? Whats step 1

 

[DxrkLucy]

I'm going to preface everything that follows by saying I'm not a financial advisor. I'm not certified in any way. Just a general person with some life experience. You'll could get some good, general infromation from us today, but this is not the place to get financially savy. I'll offer some suggestions in the following:

If you have not done so already, create a budget. Most people use a spreadsheet. Some like an actual ledger. You need to account for your inflows and outflows in some fashion; this will give you insight as to how you're getting ahead (or not). It will also help you realize where you might be able to do better.

Always live within your means. It's the only way you're going to get ahead.

Good times, bad times, always set money aside for the future. Find an amount you can consistently save.

For now, at your level, it probably best to park everything in a checking account. General awareness and eduction is probably best for you right now. After you get some more insight, what you have saved you can then invest.

Probably a good time to head to the library/bookstore. Start pulling books and review topics. Stay away from anything exotic; it will be a turn-off and it's unnecessary. Stay away from anything with "rich" in the title. Anything that proposes you'll become a gazillionaire by next week.

Saving and investing is a long-term play. It's often like watching paint dry. It's boring. Yea, you need to watch your money, have good awareness. But if anyone proposes some scheme or how easy and quick it is to make a fortune, it's best to run.

If you don't understand it, if you cannot explain it, don't invest in it.

If you cannot explain why you should invest in something, don't.

A general rule of thumb is to have six to 12 months of monthly expenses parked somewhere. A checking account or Money Market account. Something you can have immediate access to which is safe.

Most checking accounts are insured, but the downside is many pay no interest. If you have $1 in your account and inflation is 5%, at the end of the year you effectively have .95 . Long-term, that's not good. Short-term, it gives you comfort to pay for your immediate needs.

A Money Market account is an interest-bearing account that invests in very short-term financial instruments. It is NOT FDIC insured. There is a risk, slight, it will lose money. The additional risk is compensated in that many Money Markets are paying 4+% right now. These accounts are liquid and you can often write checks against them.

Certificates of Deposits (CDs) are interest-bearing and insured.. They pay possibly a bit more interest than a Money Market. But the CD is a contract, a commitment, to lock those funds with the provider, for six months to five years.

Goals, needs and timelines. All the topics in this post relate to goals and timelines.

I'd like a new fridge. I need to replace it this Summer. Whatever money I can save in that is going into Checking. I'm going to retire some day, I've got some money for that. Those dollars are going into some of the more riskier and volatile things.

Most short-term needs, 1-3 years lets say, belong in short-term instruments (checking, Money Market, CDs). Further out, 3-5+ years, it allows one to ride out volatility. I need my fridge and we're in a recession. I've got that, in Checking. I'm saving for retirement, the economy and US market has been going way down the last several months. But I'm not going to retire for another 20 years. Whatever. If anything, it might be a great time to buy or invest in things at a discount. Everyone likes a sale.

Long timelines give people an advantage to invest in things which pay better (stocks and bonds). The risk with these instruments is they can be volatile and you can lose money, potentially all of it. Long-term, things tend to smooth out and net gains. Stocks and bonds are not insured.

The advantages of stocks and bonds is, while riskier, you're compensated for that risk. You invest $1. You earn .07, grossing $1.07. Inflation is a cost, currently 5%, or thereabouts, reducing purchasing power. $1 + .07 - .05 = $1.02. Now you've earned something, over and above what inflation has taken away. And compounding that over time can allow you to get much further ahead. In the Checking account mentioned earlier, you were short money.

This also ties into the notion of risk. Checking is boring, but that's your immediate needs, what you know is coming up. Stocks, bonds and other items often take years to work. You have good times, bad times, but in-general, overall, you net positive and gain, compounding all the way.

Stocks are shares in companies where the shareholder owns a piece of that company, the idea, the product and profits. As the company grows and makes money, so do the shareholders.

Bonds often are loans a company seeks and secures with their physical assets. Plant, product, land, etc. Often because physical assets are involved, bonds are relatively safer than stocks. Bonds in-general pay less.

Asset allocation is how an investor divides and invests their funds. Short-term probably goes to checking, Money Market, CDs. Long-term, for retirement maybe, is often divided amongst stocks and bonds. Asset allocation can also involve overseas investing, maybe investing in an index fund that purchases only companies outside the US. Eighty percent of the global economy is outside the US.

Diversification. Stocks, bonds, US, overseas. Spreading your risk out over a variety of instruments often lessens risk while improoving returns. The US is going to have a recession. I can garauntee that. When, IDK. But when the US does, others countries might be doing very well. While you'll lose in the US, you could gain elsewhere.

Risk Tolerance. Everyone has a different amount risk they can tolerate. Age is often a big driver. There are questionnaires you can take on-line. Younger people can generally tolerate more risk. Older people, less. But a young single mother with a kid, younger. Maybe less still. Everyone is different. Only invest in what you can risk, what you're comfortable with. This can change over time, as you educate yourself more. Early on, it's probably more awareness and safety first.

I think maybe some good goals right now are:

1. Create and maintain a budget

2. Save and set aside six-12 months of expenses in a Checking or insured account. Something liquid

3. Consistently save something from every paycheck; consider this money spent or gone. It's for retirement or something else

4. Start reading, learning, educating yourself. You aren't sure what some of this stuff is. Dive in. Start Googling. Look in the library or book store

I understand you might be doing some of these things now. Great.

Over time your going to develop a foundation and you can explore other things (stocks, bonds, funds, etc.)

Once you have something committed for the long-term, something you can invest, seek out companies like Vanguard, Fidelity, Schwab and others. These companies will offer funds and instruments at very low rates you can invest in for the long haul.

* Disclosure: I have an active interest in Fidelity. I've been using them for years. They are a fine company, but not the only one offering financial products.

Index funds are often the best way for people to invest in for the long-term. Index funds invest in baskets of stocks and bonds, are not actively traded and cost very little in fees and commissions. You'll learn more about these as time goes on. Several out there are very simple and low cost, which is what most people need, myself included.

Commissions, fees, terms, etc. Pay attention to these. If you were to go to your bank and discuss this topic, they probably have a variety of items to invest your money in. Many could involve fees of different types. This will be disclosed in the applications. Many people invest in things they might have a relationship with or be familiar with. They're comfortable with their banker for example. But what they often don't realize are fees and commissions which might be costing them. You make 7%, but you lose some of that to fees and commissions and net 5%. Someone in an index fund: they net 6.9%. That's a huge difference over the long haul.

Real Estate. I own a house. That's my depth of real estate investing. I'm not a fan of real estate investing because it's a very illiquid instrument. I realize some have done very well in this area. Good on them.

Gold. If you buy a dollar's worth of gold, bury it in your backyard and dig it up 100 years from now, it will be worth $1, adjusted for inflation. That's cool. But you haven't made anything from it. You haven't earned anything. So, I don't invest in gold. Some do like putting a portion of their savings in gold to cushion against shocks and disruptions.

Insurance and annuities. Simple term life insurance is all anyone needs. Something that will pay off outstanding debt, cover the funeral, put kids through school, etc. Insurance can be complicated, but doesn't have to be. Annuities: don't. Annuities are a vehicle involving saving, investing and maybe insurance; they are often heavily laden with fees and commissions.

Crypto. No. And it's not a topic I'll be discussing further.

Options, futures, leverage, shorting, hedges and other exotic instruments are unnecessary in building savings for now and the future. If someone proposes you using these instruments, hard pass.

401(k)s and IRAs are vehicles that one can put money into towards retirement. All the things we've discussed thus far (cash, stocks, bonds) can be placed within these entities and dedicated to retirement. There are numerous tax advantages and they are a good thing. You can study these as you have time.

Getting rich. Anyone who chats something up involving getting rich quick, how easy it is, how they made truckloads of money: run from these people.

That's a lot. Could have been overwhelming. That's expected. Budget, park cash, educate. Those three things. There's never a bad time to save or invest. You're not going to miss out. Once you have some more insight, you can move to more long-term things for your future.

Not everyone is going to agree with my guidance. Others will be posting theirs'. I wish you all the best in this topic. Don't be concerned you're missing out and need to immediately jump into something. It's a long-term (probably used that too many times today) endeavor.

Im so glad i joined this website haha thank you so much. Very informative(: it is a lot of stuff but atleast i can always go back and re-read this!

 

[sir5574]

Wow, you guys have a lot of knowledge whenever it comes to finacial advice and life plans. I was never taught anything so as of right now all ive been doing is this: i make about 3,000-3,500 every two weeks after taxes. Granted im working 150-170hrs every two weeks.. i only have 2,600$ in bills between me and my wife. I take care of everything. I see how much bills i owe for those two weeks and give myself $200/week so 400 on top. The rest goes into savings. And i just leave it there and repeat on next payday. Ive been doing this consistantly for about a year and before it was just whenever i could. Maybe every other check. However i would love to be more involved in learning how to grow my money better. I see you guys talking about "money market" or "CD" but i have absolutely no knowledge of what any of that is. It seems like no matter how many times someone breifly describes to me these things i cant really wrap my head around it all. But seeing all of you guys' post really insipres me to keep grinding and growing finacially. Really appreciate it! Would love the opportunity to be as well aware as you guys are lol if anybody has ant advice or maybe should i just keep doing what im doing? Idk lol im still learning how to manage better and better each year

Everything Skye said is spot on. If you want a safe liquid way to store some cash while you wait. I just opened up this account today and funded it with the cash I'm using to buy the mustang. Might as well get a few hundred a month while I wait.

https://www.cit.com/cit-bank/platinum-savings

 

[dollybud]

This is the way

Is it true mortgage rates in the US don’t have a tax when buying a home?

 

[sir5574]

Is it true mortgage rates in the US don’t have a tax when buying a home?

theres no sales tax like when buying a car, but there is property tax that you pay yearly.

 

[Interstellar]

For those that have picked up their cars, has anyone entertained rates from Ford financing? I'm assuming no incentives either bu curious to hear if there is!

 

[Tommy Nokes]

Avoiding financing, just going to proceed with cash.

Bad decision, but you do you. I prefer to have my money working for me and earning more than I am paying in interest. Plus a car is a depreciable asset.

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