They Say "Money Talks" So Let's Talk

[miksta]

Here is my question because I am honestly pretty clueless.

I am 36 and a high school teacher so I don't have much money to 'play around' with in terms of investment. I know I need to be starting more than just my ISTA Retirement and I am hopeful Social Security doesn't fall by the wayside for when I look to retire when I'm in my 60's.

Where do I need to start because I obviously don't have lots of money to start upfront with BUT I know its better to at least start with something rather than never starting at all. Would you recommend a 'simulation' of the market to gain practice before investing real funds or should I go with a broker/professional from the start? If anyone wants to shoot me a PM, I would love to chat and listen to advice because I feel overwhelmed by the idea of starting.

1) get your liquid savings to the point where you'd be able to survive 3-6 months without a job
2) contribute to tax-advantaged accounts as much as you can, beginning with any employer-sponsored matching accounts, then moving to something like a Roth IRA
3) if you're able to max out step 2, this is where you'll find differing opinions on here in terms of mutual funds, index funds, robo-advisor, etc...I'm inclined to recommend a fee-free S&P index fund but that's just me. You're also still fairly young, so a robo-tool where you can set the risk setting fairly high might also be advisable.

If you're looking for a tool to get acquainted with trading, I know E*TRADE and (I think) TD have "paper trading" platforms.

 

[TwinDegrees2]

Here is my question because I am honestly pretty clueless.

I am 36 and a high school teacher so I don't have much money to 'play around' with in terms of investment. I know I need to be starting more than just my ISTA Retirement and I am hopeful Social Security doesn't fall by the wayside for when I look to retire when I'm in my 60's.

Where do I need to start because I obviously don't have lots of money to start upfront with BUT I know its better to at least start with something rather than never starting at all. Would you recommend a 'simulation' of the market to gain practice before investing real funds or should I go with a broker/professional from the start? If anyone wants to shoot me a PM, I would love to chat and listen to advice because I feel overwhelmed by the idea of starting.

My recommendation.....my late wife was a teacher...Invest with the ISTA to start. Begin with as much as you can because you won't miss it as much coming out of your check.

Then, as your expenses decrease, start investing outside of the ISTA as well. I know a lot of teachers that have made pretty decent money doing that.

But the key is doing it NOW so it has time to grow. NOW.

 

[chiefboiler23]

Anyone have opinions/thoughts on benefit/risk of back door Roth conversions. My household income is over the threshold for any Roth contributions, so the back door conversion is our only option. It is almost impossible to know the tax rates when I retire, so have been gun-shy on converting thinking my income in retirement will be lower than now...so would fall into a lower bracket. Confront my logic!

 

[JohnnyDoeBoiler]

My recommendation.....my late wife was a teacher...Invest with the ISTA to start. Begin with as much as you can because you won't miss it as much coming out of your check.

Then, as your expenses decrease, start investing outside of the ISTA as well. I know a lot of teachers that have made pretty decent money doing that.

But the key is doing it NOW so it has time to grow. NOW.

Thanks Twin. I'd welcome a DM to speak a bit more in depth if possible.

 

[JohnnyDoeBoiler]

1) get your liquid savings to the point where you'd be able to survive 3-6 months without a job
2) contribute to tax-advantaged accounts as much as you can, beginning with any employer-sponsored matching accounts, then moving to something like a Roth IRA
3) if you're able to max out step 2, this is where you'll find differing opinions on here in terms of mutual funds, index funds, robo-advisor, etc...I'm inclined to recommend a fee-free S&P index fund but that's just me. You're also still fairly young, so a robo-tool where you can set the risk setting fairly high might also be advisable.

If you're looking for a tool to get acquainted with trading, I know E*TRADE and (I think) TD have "paper trading" platforms.

Thanks Miksta, I appreciate the response. Any possible way to shoot me a DM so we can chat a bit more? Always welcome tips from individuals like you and Twin that have experience rather than trying to figure it out on my own.

 

[70boiler]

That still was a horrible report on most every metric. I guess one needs to buy the stock as it seems impervious to bad news.

You will certainly get no disagreement from me about your first comment.
Lol...as to the second, I'm not at all sure that's where I am headed.

 

[M51]

Here is my question because I am honestly pretty clueless.

I am 36 and a high school teacher so I don't have much money to 'play around' with in terms of investment. I know I need to be starting more than just my ISTA Retirement and I am hopeful Social Security doesn't fall by the wayside for when I look to retire when I'm in my 60's.

Where do I need to start because I obviously don't have lots of money to start upfront with BUT I know its better to at least start with something rather than never starting at all. Would you recommend a 'simulation' of the market to gain practice before investing real funds or should I go with a broker/professional from the start? If anyone wants to shoot me a PM, I would love to chat and listen to advice because I feel overwhelmed by the idea of starting.

I agree with miksta for the most part, especially having an emergency fund.

It is not easy to provide specific recommendations without knowing a person’s risk tolerance to market fluctuations. That is something you need to determine. Low then you are looking at a much higher percentage invested in fixed assets and lower percentage in equity assets. Higher risk tolerance would be just the inverse.

So maybe start by creating a plan over the next week or two. Identify your risk tolerance to market fluctuations- low, medium, high. Maybe there are areas to educate yourself - a little research. Determine amount you can invest. Use dollar cost averaging. Where to invest and what? Mutual Funds, ETF’s, etc.

Look at the Bogleheads forum. Forum for Vanguard. There may be some threads that can help. I’m not directing you towards Vanguard, just providing more information overload!

I was in the same boat in my early thirties and just decided to expand my investments beyond a 401k and IRA. Decided to start investing in individual stocks outside of a retirement plan and expand my retirement funds beyond a 500 Index fund in my IRA and a bond fund in my 401k.

So maybe take a week or two, plan a few things and maybe elicit comments from us.

 

[70boiler]

Here is my question because I am honestly pretty clueless.

I am 36 and a high school teacher so I don't have much money to 'play around' with in terms of investment. I know I need to be starting more than just my ISTA Retirement and I am hopeful Social Security doesn't fall by the wayside for when I look to retire when I'm in my 60's.

Where do I need to start because I obviously don't have lots of money to start upfront with BUT I know its better to at least start with something rather than never starting at all. Would you recommend a 'simulation' of the market to gain practice before investing real funds or should I go with a broker/professional from the start? If anyone wants to shoot me a PM, I would love to chat and listen to advice because I feel overwhelmed by the idea of starting.

I would echo what others have suggested.
Additionally, I would either locate an in person class dealing with markets and investments or, imho far easier and as effective, search online for either a free or lower cost one.
The area is conducted in essentially a foreign language. It is also very beneficial to become conversant with the methods and meanings of business financial records in the same way.
As mentioned by others as well, one of the best ways to move into markets is to get some understanding as to what mutual funds and indices are and how they operate. Those vehicles will insulate you from virtually all of the technicals and to very significant degrees follow the market ups and downs in a reasonable way given the quality of most of the major group managers.

 

[70boiler]

Sorry, I have been a bit dilatory in posting this.
Kudos to all posting for making the efforts you have to really try to keep this thread as non-poltical and non-adversarial as you have.
I certainly had hoped for such and felt I should, at the very least, thank everyone.

 

[TwinDegrees2]

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Thanks Twin. I'd welcome a DM to speak a bit more in depth if possible.

Shoot me a DM Johnny.

One of the things that has helped me most, and it's only been the past 15 years of so that I did this, but find a FA you trust, based on recommendations and your own research.

What area of the state are you in?

 

[TwinDegrees2]

Anyone have opinions/thoughts on benefit/risk of back door Roth conversions. My household income is over the threshold for any Roth contributions, so the back door conversion is our only option. It is almost impossible to know the tax rates when I retire, so have been gun-shy on converting thinking my income in retirement will be lower than now...so would fall into a lower bracket. Confront my logic!

Chief, how many years to retirement?

 

[TwinDegrees2]

1) get your liquid savings to the point where you'd be able to survive 3-6 months without a job
2) contribute to tax-advantaged accounts as much as you can, beginning with any employer-sponsored matching accounts, then moving to something like a Roth IRA
3) if you're able to max out step 2, this is where you'll find differing opinions on here in terms of mutual funds, index funds, robo-advisor, etc...I'm inclined to recommend a fee-free S&P index fund but that's just me. You're also still fairly young, so a robo-tool where you can set the risk setting fairly high might also be advisable.

If you're looking for a tool to get acquainted with trading, I know E*TRADE and (I think) TD have "paper trading" platforms.

I certainly agree about the liquid savings part Miksta. My bad for not thinking to include it.

 

[bonefish1]

Thanks Miksta, I appreciate the response. Any possible way to shoot me a DM so we can chat a bit more? Always welcome tips from individuals like you and Twin that have experience rather than trying to figure it out on my own.

another recommendation and something I’ve done in the past, is to utilize a “fee only” advisor. Google them in your area, look at their bios and meet with a couple who appeal to you.
With a FO advisor, you’re essentially paying them for their time and expertise. I think it’s a great way to get started and pointed in the right direction instead of trying to figure it out on your own, getting confused and frustrated.

 

[bonefish1]

But most importantly, don’t put off investing. Compounding interest is your most powerful asset and tool in having some influence over building your financial future.

 

[chiefboiler23]

Chief, how many years to retirement?

Best case, 20 years.

 

[M51]

Anyone have opinions/thoughts on benefit/risk of back door Roth conversions. My household income is over the threshold for any Roth contributions, so the back door conversion is our only option. It is almost impossible to know the tax rates when I retire, so have been gun-shy on converting thinking my income in retirement will be lower than now...so would fall into a lower bracket. Confront my logic!

No experience with a Roth conversion. Drawback is paying tax on the amount converted. And pretty sure that conversions now are non-reversible. Think there is also a 5 yr exclusion on converted amount, cannot take withdrawals on the converted principle.

Benefit is not having RMD for a Roth. And once past 5 yr restriction, age limitations, withdrawals are tax free.

 

[TwinDegrees2]

Best case, 20 years.

You've got a great chance to do some serious financial gains. Again, I'd recommend a FA.

 

[miksta]

I certainly agree about the liquid savings part Miksta. My bad for not thinking to include it.

I left out step 0) pay down all of your debt aggressively, even if it seems like you can get a higher return in the market and come out ahead on the margins.

 

[miksta]

Thanks Miksta, I appreciate the response. Any possible way to shoot me a DM so we can chat a bit more? Always welcome tips from individuals like you and Twin that have experience rather than trying to figure it out on my own.

Sure thing...if I can figure out how to do that. Lol is there a way on mobile?

 

[M51]

Yeh, stupid coronavirus scare. I do think it’s a buying opportunity because once this blows over (I’m not a dooms day, world is ending type), and especially if Trump is acquitted, I think we see the market rocket up, Dow hitting 30,000 by May. The question is, when to get in if you’ve got money on the sideline.
Market timing is hard, if not impossible.

I never was a market timer. When I was doing a lot more investing new money, used dollar cost averaging and made a half dozen or so buys each month. Not huge amounts of money. “Stay in the game” approach. Did not wait months to make a purchase. Did buy into dips. Bought heavily into the huge dips during the 2008-09 recession.

 

[hunkgolden]

TwinDegrees2 said:

↑



I certainly agree about the liquid savings part Miksta. My bad for not thinking to include it.

I left out step 0) pay down all of your debt aggressively, even if it seems like you can get a higher return in the market and come out ahead on the margins.
[/quote]
Agree with this. We have zero debt - everything is paid including house and cars. Family doesn’t have to worry about mortgage or car payments if I were to lose my job or have some sort of medical event. Great peace of mind.

 

[TwinDegrees2]

I left out step 0) pay down all of your debt aggressively, even if it seems like you can get a higher return in the market and come out ahead on the margins.

Agree with this. We have zero debt - everything is paid including house and cars. Family doesn’t have to worry about mortgage or car payments if I were to lose my job or have some sort of medical event. Great peace of mind.[/QUOTE]
Like wise. My dad taught me to pay for it when you buy it. He never had a credit card. Great way to be.

 

[glidresquirrel]

Agree with this. We have zero debt - everything is paid including house and cars. Family doesn’t have to worry about mortgage or car payments if I were to lose my job or have some sort of medical event. Great peace of mind.

Like wise. My dad taught me to pay for it when you buy it. He never had a credit card. Great way to be.[/QUOTE]
I use a CC for ease but pay it off every month and no interest

 

[hunkgolden]

TwinDegrees2 said:

↑



Agree with this. We have zero debt - everything is paid including house and cars. Family doesn’t have to worry about mortgage or car payments if I were to lose my job or have some sort of medical event. Great peace of mind.

Like wise. My dad taught me to pay for it when you buy it. He never had a credit card. Great way to be.[/QUOTE]
I use a CC for ease but pay it off every month and no interest
[/quote]
Same. Use a Fidelity Visa card with no annual fee and 2% cash paid into my Fidelity account.

 

[BoilerJS]

Like wise. My dad taught me to pay for it when you buy it. He never had a credit card. Great way to be.

I use a CC for ease but pay it off every month and no interest
[/quote]
Same. Use a Fidelity Visa card with no annual fee and 2% cash paid into my Fidelity account.[/QUOTE]
I wouldn't have one either except try to rent a car with a debit card!

 

[bonefish1]

I left out step 0) pay down all of your debt aggressively, even if it seems like you can get a higher return in the market and come out ahead on the margins.

Agree with this. We have zero debt - everything is paid including house and cars. Family doesn’t have to worry about mortgage or car payments if I were to lose my job or have some sort of medical event. Great peace of mind.[/QUOTE]

not giving an opinion one way or the other, but was paying off the mortgage just a peace of mind thing or was there a financial reason for doing so. I know not having debt is great and is advocated by people like Dave Ramsey, but not all debt is necessarily bad debt.

 

[hunkgolden]

not giving an opinion one way or the other, but was paying off the mortgage just a peace of mind thing or was there a financial reason for doing so. I know not having debt is great and is advocated by people like Dave Ramsey, but not all debt is necessarily bad debt.

Both

 

[bonefish1]

Both

So, just for discussion: let’s say you have a $300k montage at 4%.
With real estate mortgage tax deductions, let’s call that 3.5%.
Now, instead of paying off that 300k and getting a guaranteed 3.5% return, why not invest that money in the market and conservatively, make double that return? Obviously that return isn’t guaranteed, but it could also be 4-5X that return like we’ve seen in the current bull market.
I’m not questioning your decision because having a financial peace of mind is huge and whatever makes you sleep well at night. Just curious as to how you weighed the options?

 

[M51]

Brutal day for the markets. Mostly due to the corona virus issue and some not so good earnings. Exxon and Chevron both reported poor earnings, driving down both stocks and the energy sector. Cat not so good. Downbeat outlook for 2020. On the good side, Amazon and IBM both had great days.

The DOW is down about 1100 since the Jan 17 high. Think that is about 4%. About midpoint of a 10% correction.

Outlook for next week. Corona virus issue will continue to put enormous pressure on the markets. When will company inventory and production become an issue? Shipping and China meeting production.

Earnings - Google, GM, MRK, QCOM, CMI just a few of many companies reporting. CINF - Stock on my watchlist reports Wed.

Fixed assets are providing a little counter balance to the fall in equities.

 

[bonefish1]

Brutal day for the markets. Mostly due to the corona virus issue and some not so good earnings. Exxon and Chevron both reported poor earnings, driving down both stocks and the energy sector. Cat not so good. Downbeat outlook for 2020. On the good side, Amazon and IBM both had great days.

The DOW is down about 1100 since the Jan 17 high. Think that is about 4%. About midpoint of a 10% correction.

Outlook for next week. Corona virus issue will continue to put enormous pressure on the markets. When will company inventory and production become an issue? Shipping and China meeting production.

Earnings - Google, GM, MRK, QCOM, CMI just a few of many companies reporting. CINF - Stock on my watchlist reports Wed.

Fixed assets are providing a little counter balance to the fall in equities.

i think this is a buying opportunity. There’s been no negative impact to the fundamentals. Once this coronvirus scare is over, it’s go time.

 

[M51]

i think this is a buying opportunity. There’s been no negative impact to the fundamentals. Once this coronvirus scare is over, it’s go time.

If this downturn does result in a 10% or more correction, historically it is not bad. Since 1950 every correction of 10% or more has been followed by a bull market rally that wiped out the correction and drove the market higher.

 

[M51]

Markets rebound from Friday sell off. DOW up 300+ points. S&P and Nasdaq both up over 1%.

DIS is another stock to report earnings this week. Be interesting to hear what they say about the corona virus.

 

[bonefish1]

Markets rebound from Friday sell off. DOW up 300+ points. S&P and Nasdaq both up over 1%.

DIS is another stock to report earnings this week. Be interesting to hear what they say about the corona virus.

I've been a long time DIS holder. I believe in that brand. It's going to help pay some of my daughters college tuition.

 

[bonefish1]

Good day today boys. I hope none of you panicked last week.
Go VERU, AGRX, OCGN, BDSI, GERN.

 

[TwinDegrees2]

Good day today boys. I hope none of you panicked last week.
Go VERU, AGRX, OCGN, BDSI, GERN.

It's going to be another very good year Bone. A very good year and the Dow hits 35 K

 

[M51]

Market futures are up this morning. Maybe in for another strong day.

 

[bonefish1]

It's going to be another very good year Bone. A very good year and the Dow hits 35 K

Trump lining everything up nicely. This economy and market are something the dems cannot overcome.

 

[M51]

I've been a long time DIS holder. I believe in that brand. It's going to help pay some of my daughters college tuition.

Did have DIS in my portfolio about 10 yrs ago. Added to my watchlist. Has pulled back from Tuesday level. Maybe make a move if it pulls back into the 130’s.

 

[bonefish1]

Did have DIS in my portfolio about 10 yrs ago. Added to my watchlist. Has pulled back from Tuesday level. Maybe make a move if it pulls back into the 130’s.

I just don't like buying stocks with prices that high even though I'll probably hold it forever. Maybe if they split or something I'd add more.
DIS is one of those companies that's never going away and is a global iconic brand.

 

[M51]

I just don't like buying stocks with prices that high even though I'll probably hold it forever. Maybe if they split or something I'd add more.
DIS is one of those companies that's never going away and is a global iconic brand.

I agree with you. Have several stocks in my portfolio that are 25% to 75% or even more above the historical split price. Did some research but don’t recall the exact reasoning behind the split drought.

Being a dividend investor, prices in the mid 100’s and higher make it difficult to accumulate enough shares to get a nice quarterly dividend.

Some utilities are also getting above an entry start position.