Nothing much, just boring financial stuff: we've entered a recession, stocks are dropping, and I'm not worrying about it because history strongly suggests that everything will turn around in time.
Moreover, "dollar cost averaging" means that I invest that same amount of $ with every paycheck, so that when share prices are low I buy more shares than when prices are high. This, of course, follows the old "buy low" adage and helps my long-term returns.
Now if I was planning on retiring in the next five years, I might be getting edgy. Unfortunately, I won't have the funds quite that quickly. :)
Since getting my first credit card and considering someday buying a home and the inevitable retirement I have become much more interested in "boring financial stuff." Unfortunately I still haven't started investing in a 401K - haven't quite wrapped my head around it all yet and then the deadlines always sneak up to fast for me to sit down and take a serious look.
Regardless of that I am interested in what other people are doing w/ their finances. I always assumed I had poor credit but it turns out mine is great to excellent depending on which agency I'm looking at. Last winter I bought a finance book and started to teach myself the terms and all that about the credit agencies and what the difference between fixed and adjustable APRs are, etc.. pulled all three of my reports, you know the drill.
I wholeheartedly agree, and even have a few suggestions. Please forgive me if this is old news to you:
If your employer does any kind of match, I would recommend investing to the maximum match (ex: my employer matches 100% of my contributions up to 5% of my salary. So the minimum I should invest is 5%).
Start NOW, or as close to now as possible. If you were to invest $2,500 every year at a 10% rate of return for the next 30 years, you would have just shy of $500,000. If, however, you were to wait 5 years and then invest $2,500 every year for the next 25 years, you would have less than $300,000. Wait 10 years and it's $175,000. (And the total difference in your contributions is only $12,500 or $25,000.)
An easy rule of thumb for deciding how risky your portfolio should be is to subtract your age from 120. The result is the percent of your assets that should typically be in stocks/stock mutual funds; the rest should be in guaranteed-return investments like bonds. BUT if you're trying to make up for lost time and/or you're okay with the risk, you may want to keep a higher percentage in stocks, because they tend toward higher yields.
I personally never keep more than 10% of my portfolio in my employer's stock, even though it has been outperforming the market like crazy. I would feel too stupid if it tanked one day and I lost everything.
I liked David Bach's book "Smart Couples Finish Rich." It's basic but thorough, and it's written in plain english.
Good luck! I'm just a layperson, but I'd be happy to chat with you about this stuff anytime.
I've been listening to a lot of NPR recently, so I'm getting more financial news than I'm accustomed to. I don't know if this would've even been a blip on my radar otherwise.
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Moreover, "dollar cost averaging" means that I invest that same amount of $ with every paycheck, so that when share prices are low I buy more shares than when prices are high. This, of course, follows the old "buy low" adage and helps my long-term returns.
Now if I was planning on retiring in the next five years, I might be getting edgy. Unfortunately, I won't have the funds quite that quickly. :)
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Regardless of that I am interested in what other people are doing w/ their finances. I always assumed I had poor credit but it turns out mine is great to excellent depending on which agency I'm looking at. Last winter I bought a finance book and started to teach myself the terms and all that about the credit agencies and what the difference between fixed and adjustable APRs are, etc.. pulled all three of my reports, you know the drill.
So yeah, just curious what my friends are doing.
Re: 401(k)
Avoid, if you can, investing any of your own contributions into your employers stock.
Diversity is your friend.
Re: 401(k)
If your employer does any kind of match, I would recommend investing to the maximum match (ex: my employer matches 100% of my contributions up to 5% of my salary. So the minimum I should invest is 5%).
Start NOW, or as close to now as possible. If you were to invest $2,500 every year at a 10% rate of return for the next 30 years, you would have just shy of $500,000. If, however, you were to wait 5 years and then invest $2,500 every year for the next 25 years, you would have less than $300,000. Wait 10 years and it's $175,000. (And the total difference in your contributions is only $12,500 or $25,000.)
An easy rule of thumb for deciding how risky your portfolio should be is to subtract your age from 120. The result is the percent of your assets that should typically be in stocks/stock mutual funds; the rest should be in guaranteed-return investments like bonds. BUT if you're trying to make up for lost time and/or you're okay with the risk, you may want to keep a higher percentage in stocks, because they tend toward higher yields.
I personally never keep more than 10% of my portfolio in my employer's stock, even though it has been outperforming the market like crazy. I would feel too stupid if it tanked one day and I lost everything.
I liked David Bach's book "Smart Couples Finish Rich." It's basic but thorough, and it's written in plain english.
Good luck! I'm just a layperson, but I'd be happy to chat with you about this stuff anytime.
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Me, I'm happy with my strategy of not obsessively tracking how my investments are doing on a daily basis...
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