I think dealing with issues of privacy are certainly important for this kind of writing venue. Let's face it: we're taking our discussions and moving out of the normal, safe writing sphere of the classroom, in which only a few selected students and a professor or two generally have access to the texts we create. That in itself allows for a kind of writers' vacuum to develop around us all, a shield of imperviousness that makes writing on the net somewhat of a hazard.
So, in some respects, we're brave individuals. This was a strange, scary, odd sort of project, but one that can certainly pay dividends in the future (thinking back to my topic). For me, the privacy afforded me in writing on finance is controlled by a few factors: not using my full name; my husband's request that I severely limit my listing personal financial data in a public place, like listing my actual bank or yearly salary; the knowledge that students of mine will read my writing and respond; and a bevy of other concerns. Of course, being a newbie on the financial front is never something that's easy to admit, as much as it's to admit that while I do not balance my checkbook on a daily basis, I do track my investment/retirement accounts quite obsessively. With all this information floating out on the information superhighway ether, I've actually felt quite insulated so far.
Well, until I read this ominous article today from MSNBC: Threats stifle some female bloggers: Sexual harassment on the rise in blogosphere. And, of course, a concern that stems from a previous post of mine (where are all the women in finance?) reaches cyberspace. This is the place that we're generally getting our most updated information. The Internet, of course, is not a magic balancing act, a place in which equality rings perfectly true each time. But there is a good lesson in all of this craziness. There are always limitations that are not only placed on our writing (by the school, by a professor, by a boss) from outside but also those from within. You'll notice in the article above that self-censorship seems to be the fall-back position people take to protect themselves. Certainly, I've done it in previous posts by not discussing particular details in this investment game I've joined, and I have been frustrated by my inability to be perfectly honest.
But can we ever be perfectly honest? In academia, certainly not. Students are limited by the parameters of the assignment, the time and energy needed to write, and the goals of the assignment, teacher, school, class, etc. There are sometimes too many variables to count. Hopefully the main thing is that we learn context, the ability to self-censor when it is advantageous to us. There is nothing wrong with positively manipulating the situation as long as self-censoring doesn't lead to lying. Think of it as the "sin" of control. Sometimes people don't deserve to know everything. And that includes your professors! However, there are always things they should know, or the readers of your blogs deserve to know: your agenda, your goals, your details as pertaining to specific topics. They all deserve to know where you researched, and what words are yours versus what words/ideas can be attributed to others. There are certain rules to play this blogging game just as much as there are to write a paper or send an e-mail. It all depends.
Monday, April 30, 2007
Tuesday, April 24, 2007
I've just about done it!
Ok, so impulse investing works kinda like impulse shopping (well, it is shopping, right?). I've stayed on track, tackling about 150 pages of Charles Schwab's New Guide to Financial Independence (2004), and I decided to jump in. Well, here's the plan. When I get a small financial windfall in about three weeks, all that money will be routed directly to my new investment account that I created yesterday through USAA.
Reading this last book has been even more empowering, and based on all these voices demanding action, I'm taking it. Schwab's advice has been a good balance to Orman and Astre (and, interestingly, it's Orman who provides the back-jacket blurb that praises New Guide). Of course, the section "getting started" suggests that there is no better time than now. And Schwab is right. Investments must be done as soon as possible to take advantage of compound interest, the earnings monster that turns a yearly investment of $4,000 into a cool million in about 40 years. When the interest rolls into the principle, and that keeps building, the pot grows, and grows, and grows. That's why I have to start now. And I figured out a way that I can do that without taking too much risk. It's always smart to ease oneself into the shallow end of the pool. I can dive deep later.
Because I belong to USAA, and they have my retirement accounts, I took Schwab's advice (p. 47) and did the prework to investing: creating an emergency fund, ordering 30-year term life insurance for my family, maxing both my work 401(k) and a Roth IRA, and, finally, investing with a lump sum ($3,000) and adding to that $200 monthly, which will be automatically deducted from my checking account. This is Schwab's "pay yourself first" goal, and I know that by signing up to do automatic investing plans (AIPs), I can actually have my money working for me long-term, without having to actively write a check.
The next step was setting up the investment accounts at USAA. I would suggest that anybody who has access to free certified financial advisors take advantage of the service. USAA, for example, has a 1-800 hotline whose agents helped me reallocate my IRAs (to make them more aggressive), set up the term life insurance, and plan for my investments, all in one phone call.
I'm starting with two mutual funds (a collection of stocks, bonds, and sometimes cash assets that allows for diversification across industries, sizes of companies, etc.) that can either be managed by a group of people (more potential but more risk) or set on auto-pilot thorough pacing by the "indexes" like the S&P 500. My two funds will be managed. I also realized that I am not going to be a day-trader; this knowledge that I am gaining does not make me comfortable enough to by individual stocks. To do that, I'd have to also set up a brokerage account. I might in the future, but the great thing is that I'll be investing now regardless of whether I work with individual stocks or bundles. Schwab calls me the "Validator" investor type (p. 66), and that's somebody who's interested in the market but who also wants advice from experts to manage the minutia of my portfolio. Of course, this portfolio will consist of at least 80% stocks (I hope for 83%), 12% bonds, and about 5% in cash assets. I have the profile of a moderately aggressive investor, and this should work because I don't need the money next year, and since I can sit on the investments, the volatility of the market (the big up and down swings) won't affect me if I hold throughout the storms.
Schwab also notes that the stock market has grown, on average, approximately 10% a year; that's a lot of return for our money. My hope is that in a few years, as the compounding grows this money far beyond the principle payments, that I can do something good with it. I see now how important investing is, but it's not the first step in money management. It's really at the tail end of getting out of bad debt, purchasing security (home, insurance), and recognizing that we all must plan for our futures because, at this rate, the government certainly isn't going to have solvent Social Security forever.
References Cited
Schwab, C. (2004). New Guide to Financial Independence. New York: Three Rivers Press.
Reading this last book has been even more empowering, and based on all these voices demanding action, I'm taking it. Schwab's advice has been a good balance to Orman and Astre (and, interestingly, it's Orman who provides the back-jacket blurb that praises New Guide). Of course, the section "getting started" suggests that there is no better time than now. And Schwab is right. Investments must be done as soon as possible to take advantage of compound interest, the earnings monster that turns a yearly investment of $4,000 into a cool million in about 40 years. When the interest rolls into the principle, and that keeps building, the pot grows, and grows, and grows. That's why I have to start now. And I figured out a way that I can do that without taking too much risk. It's always smart to ease oneself into the shallow end of the pool. I can dive deep later.
Because I belong to USAA, and they have my retirement accounts, I took Schwab's advice (p. 47) and did the prework to investing: creating an emergency fund, ordering 30-year term life insurance for my family, maxing both my work 401(k) and a Roth IRA, and, finally, investing with a lump sum ($3,000) and adding to that $200 monthly, which will be automatically deducted from my checking account. This is Schwab's "pay yourself first" goal, and I know that by signing up to do automatic investing plans (AIPs), I can actually have my money working for me long-term, without having to actively write a check.
The next step was setting up the investment accounts at USAA. I would suggest that anybody who has access to free certified financial advisors take advantage of the service. USAA, for example, has a 1-800 hotline whose agents helped me reallocate my IRAs (to make them more aggressive), set up the term life insurance, and plan for my investments, all in one phone call.
I'm starting with two mutual funds (a collection of stocks, bonds, and sometimes cash assets that allows for diversification across industries, sizes of companies, etc.) that can either be managed by a group of people (more potential but more risk) or set on auto-pilot thorough pacing by the "indexes" like the S&P 500. My two funds will be managed. I also realized that I am not going to be a day-trader; this knowledge that I am gaining does not make me comfortable enough to by individual stocks. To do that, I'd have to also set up a brokerage account. I might in the future, but the great thing is that I'll be investing now regardless of whether I work with individual stocks or bundles. Schwab calls me the "Validator" investor type (p. 66), and that's somebody who's interested in the market but who also wants advice from experts to manage the minutia of my portfolio. Of course, this portfolio will consist of at least 80% stocks (I hope for 83%), 12% bonds, and about 5% in cash assets. I have the profile of a moderately aggressive investor, and this should work because I don't need the money next year, and since I can sit on the investments, the volatility of the market (the big up and down swings) won't affect me if I hold throughout the storms.
Schwab also notes that the stock market has grown, on average, approximately 10% a year; that's a lot of return for our money. My hope is that in a few years, as the compounding grows this money far beyond the principle payments, that I can do something good with it. I see now how important investing is, but it's not the first step in money management. It's really at the tail end of getting out of bad debt, purchasing security (home, insurance), and recognizing that we all must plan for our futures because, at this rate, the government certainly isn't going to have solvent Social Security forever.
References Cited
Schwab, C. (2004). New Guide to Financial Independence. New York: Three Rivers Press.
Thursday, April 19, 2007
In-class links, week 5
Hey y'all,
Here are the links to the workshop items for today
Newspaper article, from CNN.
Blog, from Dave Nalle at Blogcritics Magazine.
References:
Associated Press. (2007). Brownback pushes flat tax rate plan: Several details of plan would be set in the coming months [electronic version]. Msnbc.com. Retrieved April 19, 2007, from http://www.msnbc.msn.com/id/18151229/
Nalle, D. (2007). Tax day: The bureaucrat in the bedroom. Blogcritics Magazine. Retreived April 19, 2007, from http://blogcritics.org/archives/2007/04/17/072651.php
Here are the links to the workshop items for today
Newspaper article, from CNN.
Blog, from Dave Nalle at Blogcritics Magazine.
References:
Associated Press. (2007). Brownback pushes flat tax rate plan: Several details of plan would be set in the coming months [electronic version]. Msnbc.com. Retrieved April 19, 2007, from http://www.msnbc.msn.com/id/18151229/
Nalle, D. (2007). Tax day: The bureaucrat in the bedroom. Blogcritics Magazine. Retreived April 19, 2007, from http://blogcritics.org/archives/2007/04/17/072651.php
Tuesday, April 17, 2007
Clearing the Way...
Note: I realize this will come across as a selfish, another "me" posting. But, hey, this is my blog, and this is about me learning how to grow my money! Don't you hate it when people (especially those in the academic sphere) tell you your writing isn't supposed to be about yourself, and that you should be objective? There's usually no such thing as objectivism. (Not Ayn Rand's "Objectivism," of course, but an author's right to a well-written and researched, honest opinion). Be a bit selfish. It can't hurt your writing.
I'd like to step away from planning my big, great investment coup and discuss a point mentioned a few blogs ago: what to pay off first? The advice varies. Suze Orman says high-interest loans and home. Patrick Astre states that keeping the house for tax purposes (and setting up a "mortgage buster" with the help of annuities) is good, so go with the high-interest debt. This seems to be a 50/50 split. Most advisers agree on that debt that negatively affects a credit score: credit cards, car payments, etc. So here's my plan:
- Car Note: I have just under $4,000 left on my Jetta. Interest is at 1.9%. I should probably pay it off (make me feel better), but since the rate is pretty low, it isn't sucking any of my wealth away. And anyhow, interest was paid up front. I'm now riding the principle payments, with only 11 to go.
- Student Loans: these vary between mine at around 6% to my significant other's, much lower at 4%. This debt is more significant. Alone, I have about $13,000 out and growing. Getting that terminal degree is anything but cheap.
- Mortgage: Fluctuates with a first and second between 5.3% on the first and 7% on the smaller second. We're riding an interest-only 5 front on a 30-year for 3 more years, which means that 5.3% will feel a lot bigger because we're not required to pay it at the moment. We expect to move between now and 2010, so hopefully the interest on the first will not kick in. Because of our age (early 30s), Orman suggests that we don't need to move to a shorter loan (15-year) until we find the "retire in" home (pt. 4, "Buying a Home," 2002).
References Cited
Astre, P. (2005). This is not your parents' retirement: A revolutionary guide to investment for a revolutionary generation. N.P.: Entrepreneur Press.
Orman, S. (2002). The courage to be rich: Creating a life of material and spiritual abundance. New York: Riverhead Books.
Monday, April 16, 2007
Strategizing Investing
A recent article in Forbes Magazine titled "The Obesity Index" highlights just one of many strategies that investors make when playing the market. In this scenario, James Altucher of Formula Capital has taken a personal position, that obesity is bad, and translated that into a possible investing scheme (with scheme not being a negative connotation).
Altucher has taken a personal interest in finding companies that fight obesity, and then investigating how they perform for investors. His article highlights the fact that an investor can be both focused on philanthropy and smart investing. I wonder, however, how NutriSystem (as one of his highlighted stocks), with its prepackaging, would affect my environmental stance. Of course, the balance comes with which pull is stronger: I want to help support getting rid of obesity, but I also want to support the environment. Prepackaged meals create much waste. But saving U.S. dollars by fighting the obesity epidemic might just help those same people eat less red meat, which would lessen our support of fast-food establishments, which certainly create waste and pollution and tear down rainforests through the creation of cattle grazing land. The permutations are endless!
Picking emotionally tied investment choices reminds me of how I play-invested as a child. I would use our local Fayetteville Observer newspaper and follow all the companies that advertised during NCAA basketball season. Jefferson Pilot was the one that immediately comes to mind. During 7th-grade investing class (we only had it two days stretched over a month, if I recall), I "bought" all those stocks of companies who supported my TV viewing habits. And I lost money horribly. It might have been because I had no idea what investing really meant. It might also have been because I wasn't being logical with the choices. Or, maybe, it was because I wasn't really investing any money and my short attention span was too busy watching Duke and NC State basketball.
Glenda is right--had my school actually spent more time on investing and less on catechism and home economics, more of us would be quite comfortable with where our money goes and how to invest.
Altucher has taken a personal interest in finding companies that fight obesity, and then investigating how they perform for investors. His article highlights the fact that an investor can be both focused on philanthropy and smart investing. I wonder, however, how NutriSystem (as one of his highlighted stocks), with its prepackaging, would affect my environmental stance. Of course, the balance comes with which pull is stronger: I want to help support getting rid of obesity, but I also want to support the environment. Prepackaged meals create much waste. But saving U.S. dollars by fighting the obesity epidemic might just help those same people eat less red meat, which would lessen our support of fast-food establishments, which certainly create waste and pollution and tear down rainforests through the creation of cattle grazing land. The permutations are endless!
Picking emotionally tied investment choices reminds me of how I play-invested as a child. I would use our local Fayetteville Observer newspaper and follow all the companies that advertised during NCAA basketball season. Jefferson Pilot was the one that immediately comes to mind. During 7th-grade investing class (we only had it two days stretched over a month, if I recall), I "bought" all those stocks of companies who supported my TV viewing habits. And I lost money horribly. It might have been because I had no idea what investing really meant. It might also have been because I wasn't being logical with the choices. Or, maybe, it was because I wasn't really investing any money and my short attention span was too busy watching Duke and NC State basketball.
Glenda is right--had my school actually spent more time on investing and less on catechism and home economics, more of us would be quite comfortable with where our money goes and how to invest.
Tuesday, April 10, 2007
Taking Worth into Account
Here's where a focus on finances gets brutally honest. In This Is Not Your Parents' Retirement, Patrick P. Astre asks readers to do a realistic evaluation of assets (those things we own that have value) versus current liabilities, both good debt (a mortgage) and bad debt (of the credit card variety), and all things we "owe." Subtracting liabilities from assets comes up with our net assets, what we're truly "worth." This was a shocking exercise. Here are the sobering results:
Our assets: $373,750 (take into consideration with this figure a home's total worth, not just what I have invested in it), 401(k) and IRAs, savings, car values, valuables, etc. Seems like a lot, but now look at the liabilities: $354,213 (mortgages, a couple's student loan debts, final year of a car payment, etc.). Our net worth comes only to $19,537. The good news here is that we are worth something, that we own property, and that I'm maxing an IRA and 401(k), and planning to build our savings. The bad news is that I have a few years yet to work my way out of those student loans, and I'll probably need more before I'm done my terminal degree.
In one way, I haven't yet gotten to how much to invest, and when to do it. I'm still laying out my financial realities. Astre is right in that knowing where you are is a good start to taking you toward a satisfying end goal: those beautiful 30-plus years in retirement (I know I'm going to live a long existence) when I can live off investments and portfolios while drinking mimosas and reading tawdry paperbacks in my chaise lounge.
One caveat: The book itself is written more for my parents' generation (the baby boomers). This hearkens back to my last entry, when I was complaining about the lack of volume of investment tomes written by women. Now the focus seems to be that those who really need to worry about this stuff are at least 20 years closer to retirement than I am. Hopefully more of us will get interested in our financial futures.
References Cited
Astre, P. (2005). This is not your parents' retirement: A revolutionary guide for a revolutionary generation. No City: Entrepreneur Press.
Our assets: $373,750 (take into consideration with this figure a home's total worth, not just what I have invested in it), 401(k) and IRAs, savings, car values, valuables, etc. Seems like a lot, but now look at the liabilities: $354,213 (mortgages, a couple's student loan debts, final year of a car payment, etc.). Our net worth comes only to $19,537. The good news here is that we are worth something, that we own property, and that I'm maxing an IRA and 401(k), and planning to build our savings. The bad news is that I have a few years yet to work my way out of those student loans, and I'll probably need more before I'm done my terminal degree.
In one way, I haven't yet gotten to how much to invest, and when to do it. I'm still laying out my financial realities. Astre is right in that knowing where you are is a good start to taking you toward a satisfying end goal: those beautiful 30-plus years in retirement (I know I'm going to live a long existence) when I can live off investments and portfolios while drinking mimosas and reading tawdry paperbacks in my chaise lounge.
One caveat: The book itself is written more for my parents' generation (the baby boomers). This hearkens back to my last entry, when I was complaining about the lack of volume of investment tomes written by women. Now the focus seems to be that those who really need to worry about this stuff are at least 20 years closer to retirement than I am. Hopefully more of us will get interested in our financial futures.
References Cited
Astre, P. (2005). This is not your parents' retirement: A revolutionary guide for a revolutionary generation. No City: Entrepreneur Press.
The Laundry List
I've decided that I want to go beyond the Internet with my quest to learn more about investing. My first post-Web stop was the local (Reston) library, where I picked up these gems:
1. Charles Schwab's New Guide to Financial Independence, by Charles R. Schwab;
2. Straight Talk on Investing, by Jack Brennan;
3. The Smart Investor's Survival Guide, by Charles B. Carlson;
4. This Is Not Your Parents' Retirement, by Partick P. Astre; and
5. Personal Finance Planning, by V. Victor Hallman and Jerry Rosenbloom
Here are some things that struck me while picking out these books, and maybe this says something about the state of finances in our county: hardly any of the authors for the books I was interested in (investments and retirement planning) were written by women. There were many books out there by women, but they fell into a few categories: "You're newly single!" or "Girl, get out of debt!" or even, and I say this will all honesty, "Picking the right money man." What?
I get the impression that money is and has been, for a variety of reasons, that finance has resided within the den of men for most of modern history. Of course there are exceptions, certainly I was drawn to following Suze Orman's CNBC finance show, and I also read her books. That's a start. But where are the rest of the women? Why are books on money for women focusing on debt management mostly, and those for men generally about "getting rich"? Is it true that men are just more monetarily inclined? This is something that I'll definitely be thinking about as I attempt to absorb this data. And there's a lot of it (Personal Financial Planning itself has 626 pages). I've gotta go read now...
1. Charles Schwab's New Guide to Financial Independence, by Charles R. Schwab;
2. Straight Talk on Investing, by Jack Brennan;
3. The Smart Investor's Survival Guide, by Charles B. Carlson;
4. This Is Not Your Parents' Retirement, by Partick P. Astre; and
5. Personal Finance Planning, by V. Victor Hallman and Jerry Rosenbloom
Here are some things that struck me while picking out these books, and maybe this says something about the state of finances in our county: hardly any of the authors for the books I was interested in (investments and retirement planning) were written by women. There were many books out there by women, but they fell into a few categories: "You're newly single!" or "Girl, get out of debt!" or even, and I say this will all honesty, "Picking the right money man." What?
I get the impression that money is and has been, for a variety of reasons, that finance has resided within the den of men for most of modern history. Of course there are exceptions, certainly I was drawn to following Suze Orman's CNBC finance show, and I also read her books. That's a start. But where are the rest of the women? Why are books on money for women focusing on debt management mostly, and those for men generally about "getting rich"? Is it true that men are just more monetarily inclined? This is something that I'll definitely be thinking about as I attempt to absorb this data. And there's a lot of it (Personal Financial Planning itself has 626 pages). I've gotta go read now...
Sunday, April 08, 2007
An Attempt to Recover Information...
Note: Starting this blog with research is akin to finding a needle in a haystack: where to begin? Using the NVCC libraries for academic papers is generally a good place to start, but it all depends on the context of the writing. In my case, I’m writing about investments here, so while the library does have good information, using a search engine like Google to hunt down active, legitimate investment sites is not a bad action either.
Beginning with Basic Research
One of the websites I've found is Investopedia, and I like it for its diversity: its name is a play off “encyclopedia,” as other sites like Wikipedia have done on the Internet. But don’t confuse it with anonymous tidbits of cultural trivia. It’s much more dynamic than an encyclopedia: Investopedia has tutorials and training links, “ask the expert” functions, financial articles from taxes and investing to retirement, stock quotes, calculators, and quite a bit more that I haven’t even qualified yet. I'm still reeling over how much there is for me to learn. I think it's good that I start with some definitions and then place myself as a “newbie” within those terms depending on my future actions.
So here are a few useful definitions: Stocks are actually part of “debt investments” (Orman, 2002), in which people like me give their money to corporations (buying a share) As defined by Suze Orman in The Courage to Be Rich, using the stock market is a must to build wealth: "invest in the market for growth and to use as your approach ... dollar cost averaging" (2002, p. 317, emphasis mine). So what is “dollar cost averaging” (DCA)? It is investing small amounts of money, say $25-50 per month, in the markets without starting off with a lump sum. Tim Middleton, in his article "The Costly Myth of Dollar-Cost Averaging" disagrees with this position, describing DCA as similar to what we do with our monthy contributions to a 401(k) but it is slightly different when working the markets. He provides samples of DCA and lump-sum investing in the same fund, with lump-sum approaches netting an 11.7% return and the DCA only 9.8%. That doesn't seem like too much of a difference, but with the right amount of money over the long term, this could be significant.
My goal is not a small one: I want to get confident enough to invest in the stock market. Hopefully this will happen within the next month and a half. Londo Carver, another blogger in our group, suggested that a $2,000 start is a good one for stock investment purposes. I'm going to see how this pans out. According to Chad Langager, an Investopedia advisor, investing with a sum as small as $1,000 is certainly possible, but it's pretty hard to build that base into something much bigger quickly. He falls between Orman and Middleton. Langager states that the intitial money investment isn’t even the only thing to worry about, because
So, on top of managing my basic needs, like bills and creating a 3-6 month “emergency” cash stash, and now debate between having an initial fund for additional bonds investments. Orman might get us in the game earlier, but Carver, Langager, and Middleton suggest starting with a bit more to lose. The research continues...
References Cited
Langager, C. (2007). Start investing with only $1,000. Investopedia. Retrieved April 2, 2007, from http://www.investopedia.com/articles/basics/06/invest1000.asp
Middleton, T. (2007). The costly myth of dollar-cost averaging. MSN Money. Retrieved April 3, 2007, from http://moneycentral.msn.com/content/P104966.asp
Orman, S. (2002). The courage to be rich. New York: Riverhead Books.
Beginning with Basic Research
One of the websites I've found is Investopedia, and I like it for its diversity: its name is a play off “encyclopedia,” as other sites like Wikipedia have done on the Internet. But don’t confuse it with anonymous tidbits of cultural trivia. It’s much more dynamic than an encyclopedia: Investopedia has tutorials and training links, “ask the expert” functions, financial articles from taxes and investing to retirement, stock quotes, calculators, and quite a bit more that I haven’t even qualified yet. I'm still reeling over how much there is for me to learn. I think it's good that I start with some definitions and then place myself as a “newbie” within those terms depending on my future actions.
So here are a few useful definitions: Stocks are actually part of “debt investments” (Orman, 2002), in which people like me give their money to corporations (buying a share) As defined by Suze Orman in The Courage to Be Rich, using the stock market is a must to build wealth: "invest in the market for growth and to use as your approach ... dollar cost averaging" (2002, p. 317, emphasis mine). So what is “dollar cost averaging” (DCA)? It is investing small amounts of money, say $25-50 per month, in the markets without starting off with a lump sum. Tim Middleton, in his article "The Costly Myth of Dollar-Cost Averaging" disagrees with this position, describing DCA as similar to what we do with our monthy contributions to a 401(k) but it is slightly different when working the markets. He provides samples of DCA and lump-sum investing in the same fund, with lump-sum approaches netting an 11.7% return and the DCA only 9.8%. That doesn't seem like too much of a difference, but with the right amount of money over the long term, this could be significant.
My goal is not a small one: I want to get confident enough to invest in the stock market. Hopefully this will happen within the next month and a half. Londo Carver, another blogger in our group, suggested that a $2,000 start is a good one for stock investment purposes. I'm going to see how this pans out. According to Chad Langager, an Investopedia advisor, investing with a sum as small as $1,000 is certainly possible, but it's pretty hard to build that base into something much bigger quickly. He falls between Orman and Middleton. Langager states that the intitial money investment isn’t even the only thing to worry about, because
One of the biggest considerations for investors with a minimal amount of funds is not only what to invest in but also how to go about investing. Not long into your investment journey you may find yourself bombarded with minimum deposit restrictions, commissions and the need for diversification, among a myriad of other
considerations. [Langager, 2007]
So, on top of managing my basic needs, like bills and creating a 3-6 month “emergency” cash stash, and now debate between having an initial fund for additional bonds investments. Orman might get us in the game earlier, but Carver, Langager, and Middleton suggest starting with a bit more to lose. The research continues...
References Cited
Langager, C. (2007). Start investing with only $1,000. Investopedia. Retrieved April 2, 2007, from http://www.investopedia.com/articles/basics/06/invest1000.asp
Middleton, T. (2007). The costly myth of dollar-cost averaging. MSN Money. Retrieved April 3, 2007, from http://moneycentral.msn.com/content/P104966.asp
Orman, S. (2002). The courage to be rich. New York: Riverhead Books.
Frustrations!
Just a note: when I went to the new Blogger functions, I lost my last post. I was wondering why this happened! Please make sure that, for your own records, that you print your posts out, or save them in Word, so that you don't lose valuable writing and ideas.
Now what was I saying about money?
Now what was I saying about money?
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