Any Stock Holders out there? I need Financial Advice. No...not which stocks I should buy.

by Voices 17 Replies latest jw friends

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  Voices

  Ok First off let me ease your worry...I'm not asking you 'what stocks I should invest in.' I have a stock in mind that I have seen progress steadily up and up. Before I could even think about investing, i knew this company was going to take off and it's slowly climbing. With more and more research and starting to reach the conclusion that this is a good investement. I see this as a serious investing oppertunity. (this is where all the stock holders go 'yeah yeah...suuuuree') ...that is alright =) I'm still needing some advice..

  But here's the thing: I've NEVER invested before. I've heard wild stories about people investing $3k in a stock and the IRS comes to them saying they owe $92k in taxes. I would greatly like to talk to someone who knows how taxes work with stock trade.

  The stock i'm going for is a long term investment, not a short term. Do I need a sellers permit? or a Fictious Business License in order to buy stocks? When do I owe taxes? Quarterly? And what taxes can I claim, if any, and what is expected for me to file if I buy and sell my shares?

  I tried looking up stuff on the internet, but everytime i look up stuck i get slammed with 'BUY AND TRADE STOCKS FOR $7.99!.' So i'm reaching out to people on this site that might be able to advise a newbie. I'd be very much interested in communicating off the net, maybe phone...or email. Either way, Any help would be greatly appreciated. Thank you

  Thanks!

  p.s. I have a day time Job. I work 36 hours a week...I'm not sure how my financial situation as a fulltime employee effects how i file taxes with the shares I purchase and Sell.
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  james_woods

  Does your company have a 401K program? That is where I would start - particularly if there is an employer contribution.
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  Voices

  My company that I currently work for full time? or the Company i'm thinking about investing in? I guess It'd make logical sense that you're asking about my employement. Yes they do.
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  james_woods

  The company you work for, especially if they have a matching contribution (of say up to 3% of your salary).

  This is the best investment deal you can find today, and should be the foundation of other investment plans.
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  drewcoul

  You should see if you can buy the stock through your 401(k). Sometimes there are a few individual stocks you can buy through your 401(k) but it's usually limited to mutual funds or common stock of your own company.

  I would look into setting up an etrade account. I have one. You don't need any special license or permit to buy stock. All brokerages have fees associated with trades. You're not going to get out of paying a fee for buying stock.

  You will receive a tax form by January 31 of your gains or losses for the previous year. You have to pay capital gains on the appreciation of the investment. You can deduct any losses.

  The upshot is you can do it yourself through etrade or sharebuilder, and they'll let you know next January what you can deduct or claim as income on your taxes.

  It's not very complicated. Don't be intimidated by it. Normally, I would recommend you go through an advisor, but since you are interested in buying one particular stock, you should be fine just doing it on your own.

  Good luck!
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  zarco

  I think James Woods provided excellent advice. If you are a novice investor start with a 401k with your employer. Likely, you will have several mutual fund choices and even advice on what funds are appropriate to your situation. Normally, novices should not invest in individual stocks. The risk is pretty high with a single stock investment. If you know the management team, the products, the customers and the capital structure really well maybe you know enough about the risks to invest in a single stock.

  Regarding taxes - you do not pay tax unless you make money. If you receive a cash dividend you will pay tax. If you sell the stock for more than you purchased it you will pay tax. You do not pay tax unless you have a taxable event like the two mentioned above.

  Best,

  zarco
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  SacrificialLoon

  If you buy and hold it you will not owe taxes on it unless you sell it within a year then you will owe capital gains. If you sell after a year you will owe a reduced rate or none at all depending on your income level, I think. If it is a stock that pays dividends, and you choose to receive the dividend as a payment you will have to pay taxes on that, if you reinvest the dividend you will pay a reduced rate. Look up qualified, and unqualified dividends.
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  elder-schmelder

  All you need to do is open a account at a brokerage. You can use a full service one or an online one. The online ones will have cheaper trades like $7.99 at scottrade.

  I have a etrade account. If you open an account at etrade you can buy and sell any stock that you want.

  As far as taxes you only pay taxes when you make money, you only make money when you sell your shares.

  elder-schmelder
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  drewcoul

  Voices has already researched the company. They knows which stock they want to buy. There is nothing wrong with buying and selling stocks on your own. True, you shouldn't plan on funding your entire retirement through your own stock purchases, it should be in addition to your retirement especially if you're a novice. But this person is wanting advice on how to buy a particular stock that they want to purchase.
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  Justitia Themis

  401(k) "advisors" get paid (kick-backs) for "recommending" certain stocks, so I put little (no) value in what they say. These plans are valuable IF there is a matching contribution from your employer. There are some good ETFs for new investors, but I recommend you start with the basic widow-and-orphan stocks, those that pay dividends. A former employer showed me his TD Ameritrade account; the man is receiving $500,000 MONTHLY in dividend payments from his investments.

  With that said, if you feel you have good information and and are comfortable with possibly losing the money, then invest. Simply open an E-trade, TD Ameritrade, or Scotttrade account; it's very simple.

  You will not be taxed on any profits until you SELL your stock and 'realize' those profits. That's why they are called "unrealized gains/losses" while you own the stock and "realized gains/losses" when you sell.

  Edit: Also, IF you are planning on keeping stocks, especially dividend paying stocks, until you retire, you might want to consider opening a Roth IRA account and buying the stocks out of the account. That way, when you retire, you can collect your monthly dividends tax free. ;)