STYLETHREAD -- LET'S TALK SHOP!

iconic · BCBG

money (savings/investment) question

Drew · Gucci

A lot of financial companies offer a free consultation. It won't hurt to hear what the pro's have to say about investing your money.

Personally, I think the best investment is real estate. I have no idea about property costs in your area, but perhaps this is enough to put down for a rental property (you could even have it managed by a company if you don't want to be a landlord). Just an idea.

lsubatgirl · Gucci

Do you have an IRA? If not put 4K in a Roth IRA to grow (maybe 5k for 2005). You can set them up at a bank or an investment place. If you start saving now you can earn over $1 mil by the time you retire.

As for the rest of it you could do mutual funds - I would pick one based on an index fund like the Vanguard S&P 500 for example is set up by Vanguard and mirrors the S&P 500 index. The Wilsher 5000 is another good index to look for. Mutual Funds have low risk but there is some risk involved. Mutual funds pretty much take a bunch of stocks and pool them into an account and investors buy shares in the fund. This way you get a bunch of stocks at a low cost and are able to diversify your investment. It is also a good way to buy stocks you might not otherwise be able to buy. You have to be careful about mutual funds though because some brokers charge high commissions or high fees when they manage them. The best are the no load ones. If they have a load it just means you pay a one time fee either at the beginning or the end and its based on a percentage of your investment. 12-1b fees are annual fees so watch out for them - you don't wanna pay each year!

If you want to do CDs or savings account I would check and see which banks offer the best rate and then compare to ING Direct. ING Direct will probably be your best bet though. They have really good rates. If you want info on them or a referral for the free $25 pm me about it.

rocky · Coach

Does you company have 401k? If so, and they match your contribution you should definitely do it since it is free money. I second the Roth IRAs, the good thing about them is that you do not get taxed on the money you pull out because the money you put into was after tax.

bex · Chanel

if your company doesn't have a 401K you are already investing in- then i say go with an IRA. you can only invest $4k per year in it though- so you would still have $6K to build with mutual funds, etc.

tara t · Marc Jacobs

quote:
Originally posted by: bex
"if your company doesn't have a 401K you are already investing in- then i say go with an IRA. you can only invest $4k per year in it though- so you would still have $6K to build with mutual funds, etc. "

Bex... i thought it was 2K? i can put more $$ in there?

bumblebee · Dooney & Bourke

the current limit for a roth IRA is $3K (it used to be $2K). i think the traditional IRA is unlimited (but could be wrong...).

halleybird · Hermes

quote:
Originally posted by: Drew
"Personally, I think the best investment is real estate. I have no idea about property costs in your area, but perhaps this is enough to put down for a rental property (you could even have it managed by a company if you don't want to be a landlord). Just an idea. "

I agree. If you don't own a house or condo, buy one. If so, look into a second property.

IRAs are good too. I am getting one soon, since my state's teacher retirement system is pathetic.

bex · Chanel

hmmm i thought my Financial guy told me it went up to $4K (I have a Roth IRA which is slightly different than a traditional IRA- so that may be the difference)

lsubatgirl · Gucci

For 2004 & 2005 IRA contributions are limited to 4000. Usually it goes up 1000 a year though.

Drew · Gucci

quote:
Originally posted by: lsubatgirl
"For 2004 & 2005 IRA contributions are limited to 4000. Usually it goes up 1000 a year though."

This is true. Also, if you didn't put any money in your IRA last year (or didn't have one) you can put in an additional $500, making your limit $4500.00