# How do you start investing?



## Kermit Jizz (May 2, 2022)

For the first time in my life, I've got a little bit of spare money that I can afford to lose. I want to do something with it other than leaving it in a savings account, but I am completely overwhelmed by the options. Stocks, crypto, bonds, trusts, 401ks, IRAs, so many choices. Hell I don't even know what a couple I listed are. And even looking into one of those categories on their own is daunting, like how do you even decide what stocks to invest in? Do you just throw it in a couple things like Coke or Facebook and be content with some the meager returns you get? I'm not even sure what rates would be considered meager or lucrative.

I have no idea where to even start, please help.


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## Table Country (May 2, 2022)

First you should take a picture of the front and back of your credit card and send the pics to me.


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## Kermit Jizz (May 2, 2022)

Table Country said:


> First you should take a picture of the front and back of your credit card and send the pics to me.


Last time I tried that the dude just bought a lot of stuff from 'evil dragon' or some shit. I have just financially recovered from that experience and don't plan to repeat it.


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## JULAY (May 2, 2022)

An S&P index fund is a relatively safe investment, unless the broader market tanks, it's one of the less volatile securities. Make sure that you aren't getting raped over management fees though.



			https://www.forbes.com/advisor/retirement/best-sp-500-index-funds/
		


Also, if you are investing long-term, as in with a time horizon of decades, don't worry too much about short term declines, over the years the market will recover and you'll have pretty significant gains regardless of short-term fluctuations.


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## thegrayman (May 2, 2022)

I think the best thing to do is start learning about personal finance. The FIRE movement is very much into freedom through money. 

Early retirement extreme
mr money mustache
Your money or your life

Early retirement extreme and MMM has forums where you can ask questions. But if you want the simple short answer: 


According to a study at Trinity university you can safety withdrawal 4% annually from index funds.  That means you can do the math like this: 
100 / 4 = 25

You annual spending: 60.000 $

60.000 * 25 = 1.500.000$ < --- This is the number you need to never work again.

Best of luck.


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## Spasticus Autisticus (May 2, 2022)

There are two types of accounts that you need to care about: retirement accounts, and "taxable" accounts. Retirement accounts have restrictions on when you can withdraw and how much you can contribute, but they have tax advantages. Taxable accounts have none of the restrictions, you can buy/sell/withdraw whenever and however much you like, but you pay capital gains taxes on any earnings. Generally speaking, you should invest as much as you can in retirement accounts before doing taxable investments.

Open a Roth IRA at a brokerage. This is a tax-advantaged retirement account, meaning you will pay no taxes on withdrawals after age 59.5, even for earnings. Put as much money as you can into the Roth IRA up to $6000/year. If your employer offers a 401k, invest in it, especially if they offer a match. After you're maxing those out, then look into taxable investing.

Stock picking is a fool's game, it's more or less gambling. If you absolutely must invest in a specific stock, don't make it any more than a few percent of your entire portfolio. The bulk of your portfolio should be in low-cost index funds that cover a broad spectrum of whatever asset class it is (i.e. stocks or bonds). You can't really go wrong with S&P 500 index funds.

The Bogleheads wiki is a wealth of information: https://www.bogleheads.org/wiki/Getting_started


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## Quindoll (May 2, 2022)

thegrayman said:


> I think the best thing to do is start learning about personal finance. The FIRE movement is very much into freedom through money.
> 
> Early retirement extreme
> mr money mustache
> ...


That number comes from a time where returns on stuff like bonds was higher though. So one might be a bit more conservative to be sure nowadays. Maybe 3.5 % or a flexible withdrawal rate.

Important:
The study claims that you can withdraw for 30 years with a 50 % bond 50 % stock portfolio *without *the money running out. That does not mean forever. For this you are better suited with this:


			https://www.vanguard.com/nesteggcalculator
		


For the OP. We would need to know what your goal is for any recommendations. Retirement? Building money up for X years to then spend it on something? Without that it might be a bit difficult to give you proper ideas.


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## thegrayman (May 2, 2022)

Yea


Quindoll said:


> That number comes from a time where returns on stuff like bonds was higher though. So one might be a bit more conservative to be sure nowadays. Maybe 3.5 % or a flexible withdrawal rate.
> 
> Important:
> The study claims that you can withdraw for 30 years with a 50 % bond 50 % stock portfolio *without *the money running out. That does not mean forever. For this you are better suited with this:
> ...


Yea, I kept it simple in interest of brevity. I believe the people behind the study updated it and found that you could probably do it on 5% going purely into the stock market. I think that nest egg calculator is probably a good tool. If you want to be safe you can just use 3%.


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## Kermit Jizz (May 2, 2022)

Spasticus Autisticus said:


> If your employer offers a 401k, invest in it, especially if they offer a match.


My employer matches to a point and then matches half for the rest. Is it recommended to invest only up to the match or invest as much as I can?



Quindoll said:


> For the OP. We would need to know what your goal is for any recommendations. Retirement? Building money up for X years to then spend it on something? Without that it might be a bit difficult to give you proper ideas.


Definitely want to cover retirement, but it sounds like there's limited options for that and I think I've got most of them covered atm. My main concern is that I've got extra money that is just depreciating rapidly with inflation. At minimum I'd like to make sure it maintains its value, preferably accrue value. Ideally my end goal would be to make as much money as reasonably possible. Not that I'm looking for a get rich quick scheme, but more like if there's an opportunity to make money I should take advantage of it, if that makes sense. I just don't want to be wasting opportunity.


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## Spasticus Autisticus (May 2, 2022)

Kermit Jizz said:


> My employer matches to a point and then matches half for the rest. Is it recommended to invest only up to the match or invest as much as I can?


Invest as much as you can. Even a half match is worth taking advantage of.


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## Quindoll (May 2, 2022)

Kermit Jizz said:


> Definitely want to cover retirement, but it sounds like there's limited options for that and I think I've got most of them covered atm. My main concern is that I've got extra money that is just depreciating rapidly with inflation. At minimum I'd like to make sure it maintains its value, preferably accrue value. Ideally my end goal would be to make as much money as reasonably possible. Not that I'm looking for a get rich quick scheme, but more like if there's an opportunity to make money I should take advantage of it, if that makes sense. I just don't want to be wasting opportunity.


Okay so I am assuming long term 10-15+ years. This of course depends on your age and the age you want to retire in.

Okay, okay. This looks like stocks might be a good solution for you. Good long-term gains. Require little work with indexing and are relatively cheap when it comes to the costs of holding the. On the downside you should, never, never ever, under and circumstances sell when the market drops. You need to be somewhat resilient against market crashes.
Because of the later I see it as important that you know what you are doing. So I recommend two books that give you good enough insight and should build up your confidence to stay on course, even in turbulent markets.

Common Sense on Mutual Funds: Updated 10th Anniversary Edition
- Basic 101 for Mutual Funds and what to do

Devil Take the Hindmost: A History of Financial Speculation
- History on market speculation. A good background here makes you way calmer when faced with market crashes that are inevitable going to occur

The tl;dr will be to put your money into a broad, and cost effective index fund. Do not trade a lot, save regularly and switch your money slowly into bonds as you get older and your preferred retirement age approaches. It's all in the first book.

Now. As far as I am aware of you can invest in stocks/index funds within your 401ks, IRAs and what else you have in that area. But since I am not from the US of A, I cannot give you any good advice on that.


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## Drkinferno72 (May 2, 2022)

Buy gold and other hard assets


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## Non-breath oblige (May 2, 2022)

Quindoll said:


> Now. As far as I am aware of you can invest in stocks/index funds within your 401ks, IRAs and what else you have in that area. But since I am not from the US of A, I cannot give you any good advice on that.



Workplace 401ks usually provide a pre-selected list of mutual funds. HSAs either have pre-selected or free range. IRAs are generally free range. For free range stuff, pick funds with no transaction fees (usually these ones are from the same company where your account is at)

Look for the ones with the lowest expense ratios (< 1%, usually Vanguard/Fidelity/Schwab). Those are generally "management fees"

If any target date funds are provided (something like "2055 Target Date Fund", the year on the fund is the general period when you reach 65/retirement age) then dump everything there if you want an easy set-and-forget because all the stock/bond allocations are done for you over time. Otherwise some combination of an S&P 500/total stock market fund + total bond market fund (100 - age in stocks and the rest in bonds has been the long "standard", but 100% stocks at a young age is perfectly reasonable). 

If you have various individual large/mid/small-cap funds but no all-in-one total market funds, then you can approximate allocations resembling the total market here: https://www.bogleheads.org/wiki/Approximating_total_stock_market

For non-retirement "taxable" accounts, use ETFs instead of mutual funds for better tax-efficiency. Don't put target funds in taxable accounts (see this recent story)


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## Devout Muslim (May 2, 2022)

Be careful about dumping all your savings into markets now. The market is in a precarious position and if it crashes it could take years to recoup those losses (assuming you didn’t invest in a stock which black holes, in which case the wealth is just gone).


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## Kermit Jizz (May 2, 2022)

Transphobe said:


> Be careful about dumping all your savings into markets now. The market is in a precarious position and if it crashes it could take years to recoup those losses (assuming you didn’t invest in a stock which black holes, in which case the wealth is just gone).


Yeah I'm pretty wary of making any major investments now. Probably will just play around with a small portion of my money until the economy smooths over.

On that note, is their anything worthwhile to be doing with the money when the market is this precarious or is it best to wait on trying anything?


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## Flavius Claudius Julianus (May 2, 2022)

I go three ways: antiques, antiquarian texts (manuscripts, fragments, books proper,) and BTC. 

This is of course on top of saving the old fashioned way, but given interest rates right now, it's basically a zero growth strategy.

I have before sold on some of the former assets to make short term cash, and my (rather ample) collection grows in value each year. 

Not into stocks of any kind, primarily because that shit is all voodoo and wind whispering to me. Maybe that'll change when I make more money.


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## Non-breath oblige (May 2, 2022)

Kermit Jizz said:


> Yeah I'm pretty wary of making any major investments now. Probably will just play around with a small portion of my money until the economy smooths over.
> 
> On that note, is their anything worthwhile to be doing with the money when the market is this precarious or is it best to wait on trying anything?



Continue to max non-taxable accounts where possible since it still can help reduce your tax burden and shouldn't be touched for decades anyway. 

If you go the Boglehead route, then you DGAF about the economy in general and continue to contribute appropriately.

I Bonds (another FAQ here) are also a possibility because the bi-yearly APY rates are tied to inflation (and are currently 9.62% as a result), 10k yearly max per person (you can purchase an extra 5k with your tax return but seems like a lot of extra work to me), and you will never get back less than you invested. Big downsides are you can't touch it for a year, you lose the most recent three months' interest if you redeem them after less than 5 years, and the only gov website where you can purchase them from kinda sucks ass.  Because of said 1 year no touchy rule, generally recommended to space out the contributions and buy at the end of the month since the interest for the bonds you buy applies for the entire month.


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## Devout Muslim (May 2, 2022)

Kermit Jizz said:


> On that note, is their anything worthwhile to be doing with the money when the market is this precarious or is it best to wait on trying anything?


If I was American I would look into what bonds are available. America has a wide range of Government bonds with various benefits.


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## Depths of Homolust (May 2, 2022)

Kermit Jizz said:


> On that note, is their anything worthwhile to be doing with the money when the market is this precarious or is it best to wait on trying anything?


We're currently teetering on the edge of a serious recession. The only thing I can recommend while we still haven't crashed yet is precious metals. If you're not into shiny rocks, just wait until next week to start investing. The Federal Reserve is expected to raise interest rates by 50 points on Wednesday, so that's gonna freak everyone the fuck out and mess with the market for a bit.

Other than that everything in this thread is pretty solid advice. Glad you're doing well.


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## Polarity (May 3, 2022)

Reading this is a good start and will helpfully skip you over most reddit-tier advice and other posters here advising you to time the market.

If you want to play with single stocks or crypto, limit it to 5% of your net worth. But if you've never invested before, don't because that's just gambling.


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## eternal dog mongler (May 3, 2022)

Polarity said:


> If you want to play with single stocks or crypto, limit it to 5% of your net worth. But if you've never invested before, don't because that's just gambling.


That's boring though. I think OP should find a tiny biotech company with a cool sounding name and go all-in.

This is the closest thing to betting your entire bankroll on a single number in roulette that exists. If they develop something that interests a larger company their stock will shoot up like 1000%. Otherwise they'll go bankrupt. Odds are about the same too!


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## Treasure Champs (May 5, 2022)

Investing is shit right now. If you find something that is not going to immediately haemorrhage, let me know. The DXY (value of the dollar) is high and might go higher (largely because stuff like the Euro and the Yen are dogshit), which means the major markets like the S&P500 and the NASDAQ are down and will probably continue to go lower. The usual major bets, amazon, netflix, and so forth, have all reported disappointing Q1 returns because no-one has any spare cash to spend, and Q2 will probably be the same or worse. 

BTC is usually a good bet but it has a very good chance of crashing from 40k to 29k in the next month or so. If it DOES crash to between 29-35k, it's a good buy. Put it in blockfi or something and get interest from it.

This is the problem of the markets right now: EVERYONE is looking for an inflation hedge, but no-one knows what it is, or if it exists at all. Maybe we're just all fucked.


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## Kheapathic (May 5, 2022)

Treasure Champs said:


> This is the problem of the markets right now: EVERYONE is looking for an inflation hedge, but no-one knows what it is, or if it exists at all. Maybe we're just all fucked.


 Yeah, I don't know if there is a hedge against this shit; as everyone is gonna be out of money and unable or unwilling to facilitate trade. Even with a job, all I could say is cut back as much as possible and grow your own food. You can use any excess to trade with, that or skilled work for goods. Everyone else is gonna be starving or robbing.


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## Absurdist Laughter (May 6, 2022)

Kermit Jizz said:


> Last time I tried that the dude just bought a lot of stuff from 'evil dragon' or some shit. I have just financially recovered from that experience and don't plan to repeat it.


That's the first step in investing, get rid of your credit card debt. Second step have an emergency plan (savings account, money management account, cash under the bed, whatever.), Third get a job that has vertical growth for your career and your salary. Start funding a 401k bonus if you can also get an HSA. Fund the max contributions on your HSA and 401k if company matches. Once your HSA is maxed contribution, start funding an IRA. Once that is maxed, you can add to your emergency funds or go on vacation knowing you're more solid than 98% of the population.


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## Retink (May 11, 2022)

Investing is a very individual experience and there's really no one right way to do it. The reason for this is that you need to feel comfortable with your investment or you'll end up hating it any time there's any kind of issue with it. Sure, there might be an optimal way to invest in order to maximize profits, but if that way just doesn't work for your mentality you'll probably lose money, whereas with a sub optimal way that you feel comfortable with would actually earn you money. So go out there, and try different things, see which things excite you and you can enjoy investing in, and don't think you have  to go into any one thing completely, you can hold stocks, bonds, real estate, crypto, and even collectables and be right for doing so. 

Once you understand how to use debt as a tool as well you can really start getting ahead.


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## Picklechu (May 12, 2022)

1. If your employer offers a 401(k), 457(b), etc, _and_ they have a contribution match, contribute the minimum to get the full match, since it's basically free money.

2. Pay off debts of over 6% or so APR, which will primarily be credit card debt. Long-term, the market generally exceeds 6%, so debts with APR below this amount aren't quite as much of an issue.

3. Open an IRA or Roth IRA, and work towards maxing it out (the current contribution limit is $6K/year).

4. If your employer offers a 401(k), 457(b), etc, work towards maxing it out (the current contribution limit is $20.5K)

5. Open a regular brokerage account and begin to purchase low-cost index funds. There are several different combinations you could do, but the most common ones are total U.S. stock market funds, S&P 500 funds, total international stock market funds, and bond funds

At some point after step three, start working on other debts. This is a bit more subjective, since debt can be a useful tool, but as long as the APRs don't exceed about 6%, you should come out ahead in the long term. 

Also, during the entire process, start building up an emergency fund. Generally, three months is recommended, but you could do more or less depending on your situation. Pick a savings or money market account that gets a good APY, not one of the shitty ones that many banks and credit unions with physical branches offer.

Individual stocks are basically gambling, so you probably shouldn't put any big boy money into them. Same thing with crypto, private equity, etc. I personally limit these to about 15% of what I put aside for investing, but I've done pretty well financially over the past 4-ish years and am less risk-averse than most people.


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## Dude Christmas (May 12, 2022)

Why bother, the system is rigged.


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## TheRedChair (May 12, 2022)

Polarity said:


> Reading this is a good start and will helpfully skip you over most reddit-tier advice and other posters here advising you to time the market.
> 
> If you want to play with single stocks or crypto, limit it to 5% of your net worth. But if you've never invested before, don't because that's just gambling.


But this is what I have been saying for the past 2 years here. And as stated before I learned this over 50+years ago and this knowledge is well over 120 years ago because my grand parents who taught me how to live within my means as well as to save was taught by "their" parents.

Also even the author has little faith in Generation FAIL by the first 3 words on the title page.

 "IF YOU CAN"....  Now that is pure honesty.



Dude Ukraine said:


> Why bother, the system is rigged.


Yes the system is rigged BUT if you learn how to play the game and play it well, you can be free like me laughing at all of the wage slaves in Silicon Valley Land while watching them get stuck in traffic. 

Yea I got it good  because I gamed the system.  I took the time to learn on how to play the game and I played it well. 

You can too if you try.


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## Dude Christmas (May 12, 2022)

TheRedChair said:


> But this is what I have been saying for the past 2 years here. And as stated before I learned this over 50+years ago and this knowledge is well over 120 years ago because my grand parents who taught me how to live within my means as well as to save was taught by "their" parents.
> 
> Also even the author has little faith in Generation FAIL by the first 3 words on the title page.
> 
> ...


Good luck to you, I hope you have precious metals/Bitcoin, the Fiat system is failing.


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## MadStan (May 12, 2022)

by bitcoin.  everyone says it will be worth at LEAST 100k by the end of 2021. Oh wait, um, well it will be more at LEAST a million by 2030!


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## Mr. Pestilence (May 13, 2022)

The time to buy in will be when the market crashes and the media dubs the day “Black/Bloody (Day of the Week)” Maybe it will go lower from that point for awhile but I think in the long term it will pay off. Depends on how bad Joe destroys everything.


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## MowwNr5 (Jun 7, 2022)

Unless you truly believe the world is going to end in the next couple of years, dont go with gold, because the gains are just not there.
If you invested 1$ into gold in 1900, you would have 3.50$ now.
If you invested 1$ in a diversified stock portfolio in 1900 you would have upwards of 350 million today.
Stocks give an average yearly return between 4-7%, even accounting for all the recessions and wars that happened.
Just look up mutual funds of ETFs, where you can park your money and forget about it for a couple of years. To avoid the impossible task of timing the market, dont put in everything at once, but break it down and put it in over a year or so.(and ideally keep making monthly payments to build up a nice retirement fund).
Or, you know, you could just YOLO everything into SHIBA and hope for another dog coin season.


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## tehpope (Jun 11, 2022)

Polarity said:


> Reading this is a good start and will helpfully skip you over most reddit-tier advice and other posters here advising you to time the market.
> 
> If you want to play with single stocks or crypto, limit it to 5% of your net worth. But if you've never invested before, don't because that's just gambling.


https://www.bogleheads.org/wiki/Lazy_portfolios#Three_fund_lazy_portfolios

*>"If You Can: How Millennials Can Get Rich Slowly" reading list*
Thomas J - Stanley; William D. Danko - The Millionaire Next Door
John "Jack" Bogle - Common Sense on Mutual Funds
Edward Chncellor - Devil Take the Hindmost
Benjamin Roth - The Great Depression: A Diary
Jaason Zweig - Your Money and Your Brain
Allan Roth - How a Second Grader Beats Wall St
Rick Ferri - All About Asset Allocation

Or you can just try The Bogleheads' Guide to Investing. All of these books can be found "online" . Devil Take the Hindmost is still physically only. There are digital copies out there, but the epub version isn't formated that great.


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## Blobby's Murder Knife (Jun 15, 2022)

The best inflation proof thing you can invest in is yourself. Never stop learning things, keep a good library, secure your housing/food/a second possible stream of income. 

As for investing in the stonk market, I am lazy and just do index funds. I have made some money from crypto, but that's more gambling and luck than anything else.


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## the fall of man (Jun 15, 2022)

Don't be afraid of the market.

Don't try to make money off the market (it can preserve wealth pretty well; it's terrible at making money unless you have really good predictions).

Don't put all your eggs in one basket.

Do read a lot.

Do be contrarian.

Do understand what level of risk you are comfortable with.


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