Financial planning now that the world isn't ending?

JimmyPage

Well since the world was always going to come to an end I never really studied much finance. Anyone have any good advice on getting started? Any good books that help? Any knowledge of CD's, IRA's, 401K's, etc? Or just any thoughts on financial planning for the future after realizing the WT message was BS?

JimmyPage

Wow. Guess everyone else is clueless about this subject as well.

Dorktacular

I've had a 401K for a long time now. I have always been Dorktacular of the "Covers His Ass" class.

SnakesInTheTower

JP...

I too never planned properly for my financial needs.... now that I have made my informal exit from the cult, I better get planning.

One thing I am doing now is paying off debt. No point in putting much into savings at less than 2% when I am sitting on $3,000 worth of credit card debt at 10% and another $6,000 in student loan debt at 5%.... Some experts say pay debt first, others say have 6 months worth of living expenses saved up in a liquid account (savings, short term CD, etc). Good idea if you can do it.

My goal right now.....cut unnecessary expenses.....pay off my debts first......slowly put money into savings...when it gets to about $500...roll it into short-term CD...when it gets a bit higher... the aforementioned 6 months worth of living expenses...then start buying safe Savings Bonds.... then as I get more money...maybe put some into a more risky mix of stocks, mutual funds, bonds, etc... it is a slow process...

I was reading another thread here about someone going bankrupt and their bank sucking their money out of their account before they could file..... this reminds me that many of us are probably just a paycheck or two away from bankruptcy and/or homelessness ourselves....just one accident, long term illness, disability...and BLAMMO....

As to your specific question....there are lots of books out there that will give you all kinds of advice. Suzie Orman has some interesting books... there are some "Financial Planning for Dummies" books out there that get into the basics... one newspaper column I like is The Motley Fool..they have what seems to be good advice on getting started in basic investing......and dont buy any of these..go to the local library and borrow them...

Snakes ()

ps...edited to add...ooh ooh...my next post is number 2000.....

Finally-Free

I was clueless about finances, living from hand to mouth. I also suffered some reversals in my health which made it impossible to continue working in my former trade. I retrained, and have a pretty good job now. I'm putting money into a pension plan. I also bought a house a few months ago. Now my challenge is to pay off my 30 year mortgage by the time I retire in 15 years.

W

jstalin

If your employer offers a 401(k) with matching funds, start with that. If not, go with a Roth IRA. Find a good low-cost brokerage, like Share Builder (the company I use), to open your IRA. Start simple, with something like an S&P500 index fund.

LockedChaos

The wife is a CFP (Certified Financial Planner)

a CPA (Certified Public Accountant)

and 7 or 8 other Initials behind her name.

Thank you very much - I paid for her schooling.

Anyway, get a good Planner, fee based

Don't pay a percentage

It's easy to get hosed, be careful

Start watching CNBC, or whatever financial tv is available

Get a subscription to Investors Business Daily

Get a good mutual fund - no load

There are a lot of factors involved in investing

That's why you need a planner

A good one will ask a LOT of questions

If they don't, move on

There aren't any short cuts

garybuss

1. Dave Ramsey will supply all the don't do's and many of the do do's. Listen to him. Study him.

2. Find a guy that has what you want and do what he did exactly.

That's it. Don't do the don't do's, do do the do do's. When you have that down pat, do lots more do do's.

done4good

Maximize your 401(k). If you can swing it, you are able to contribute $15,500 annually into it. It's pre-tax dollars, so it doesn't really hurt the paycheck too much.

Diversify the investments within it. Try to put about 20% into 5 different equities based mutual funds each. Some large cap, some mid cap, some foreign, and perhaps some in small cap. Most should weigh on the large cap side, though.

Open a Roth IRA, (above and beyond the max in your 401), if your combined family income is less than $150,000. If it is above that, then put the additional money directly into mutual funds.

Don't sweat short-term market slowdowns. They are necessary, and allow you to buy shares more cheaply. It will pay off later.

Typically, if your under 50, the above advice works well. If you are above 50, you will want to diversify a bit more conservatively, (larger amount in bond-based funds.

j

done4good

Btw: Gary is dead right about Dave Ramsey.

Financial planning now that the world isn't ending?

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