Home Forums Miscellaneous Topics Stock Market and Investing Investing for dummies

I posted this in the campfire and someone recommended I move it down here….. didn’t know this sub forum was here lol….


Is going through a brokerage firm like Morgan Stanley, Merrill Lynch, etc. the way to go? I’m talking about maybe 2-3k to start and 500 a month after that?

Other than an annuity fund through work, a pension, a few different life insurance policies and real estate, I don’t know chit about stock market type investing….. I’m looking for easy but not something with a bunch of hidden fees….. I don’t mind paying a guy up front for his knowledge but don’t want to get swindled. Thx.

open an E-trade account or an Vanguard account online.... it's stuipd easy and you can move money between your bank and the investment account when needed with ease...
You can set up automatic withdrawals from your checking set for every payday if you wish... it works really slick... and over time the money really stacks up and can begin to be a problem.

I agree, I'm also a Vanguard guy, but Fidelity is also very good. I'd take a look at Index Funds at least initially to save costs over the long haul.

The transactions to and from your checking account are seamless and IMHO "dollar cost averaging" investing is the way to go.

I'd do some research on ROTH IRA's while you're at it. Before I retired in DEC I had my work TSP (401K) maxed and was fully funding 2 ROTH IRAs though Vanguard. Now that it looks like I'm stuck in the 22% tax bracket due to pensions, I wish I had fully funded the ROTHs a lot earlier and gone with the minimum to max out my matching in the pre-tax TSP.

I've had Fidelity Investments accounts for a long time, but I am sure I could be happy with Vanguard as well. It is very easy to set up accounts, move money and purchase stocks, mutual funds, and ETFs commission free (in most cases).

Figuring out the right investments is the harder part for anyone because it depends on goals, risk tolerance, time line and taxes. I would start by reading The Psychology of Money: Timeless Lessons on Wealth, Greed and Happiness by Morgan Housel to get the right mindset. Then maybe read some stuff by John Bogle (the founder of Vanguard) and/or Peter Lynch (former Fidelity fund manager). Ultimately, it may not be a bad idea to take some financial planning outreach courses at a local community college or even pay for a few hours of time with a fiduciary (one who works for you and does not get paid when he sells you something) certified financial planner to give you some ideas.

Most people can be happy and fine over time in S&P 500 index funds (e.g. SPY) or total market fund index funds (e.g. VTI). It's simple and spreads the risk. Just be positioned to ride through a downturn without cashing out, and keep investing during it.

Avoid getting involved with any full service advisors that are going to charge you an annual assets under management fee. If you feel you need advice, there are fee only advisors that charge by the hour. If you go over to the https://www.bogleheads.org/forum/index.php forums and post up your whole financial picture, you'll get some good guidance from experienced do-it-yourself investors.

I am a dummy, but I have been immersed in the market for 25+ years. I DO know some things not to do. Personally, I have had bad experiences with 'financial advisors'. As near as I can tell, a financial advisor is basically a salesman who get's paid for directing your investment...he gets paid by you, and he gets paid commissions by his parent company. If his company is pushing stock or fund XYZ this month...that is what he will recommend to you. He has NO LEGAL obligation to do what is best for you. If you go to a brokerage house and work through a fiduciary...he is obligated to work on your behalf. His fees will be higher (maybe not in the long run).
I started with Edward D. Jones, they were not crooks, they were just stupid. Apparently there is no criteria or test standard for opening a Jones franchise. You might get someone who is smart and savvy and will work for your benefit...I got the opposite.
As an example, eventually I stumbled through word of mouth into the door of Stifel Nicolaus, been there 18 years...very happy with them. I am only interested in dividend money flow, and instead of him advising me when I am shopping, he researches maybe 5 or 6 corporations and presents me with their prospectus...and I choose what best fits my investment objective. This is working very well...I sailed right through the 2008 'crisis', fat and happy. And having picked mostly preferreds and equities...there should be a nice sum for my kids when I croak. Unlike most guys here, I am not a fan of funds, I'm all individual stocks, handpicked, in a wide array of industries that actually produce widgets or oil energy...and yes, I have left a lot of money on the table by staying out of banking, insurance, real estate and tech....but that's just my preference.

I always figured ...if an investment advisor knew what he was doing.....he could invest his own money and be successful.

I have had Vanguard for 30 years... I only have one account there now as they have become WOKE.
I have a Schwab Account also ....I can walk into their office and get help immediately.

No one even knows where a Vanguard office is.

Thank you all, sounds like I need a financial advisor…. I’m in a pretty unique situation with a semi-short time (20 years) to achieve the best possible outcome. Better off than most but still not as well protected as I need to be.

Lots of moving parts and possible scenarios to plan for….. overwhelming lol 🤦🏻‍♂️

Take 1 bite at a time.

I was/am lucky in that due to my BS in Business MGT I HAD to take a bunch of finance/accounting classes. Back then we were playing the market using a computer simulation as part of the classwork. IF it hadn't been for that I'd have gone the financial advisor route, (one with fiduciary responsibility).

Investing is kind of like planting trees; the best time was 20 years ago, the next best time is today/tomorrow.

Good luck with it.

I appreciate it…. Definitely need to do something in the near future. Forgive me for not wanting to put it all out there on a public forum.

I went with one of the big house investment firms 30+ years ago. They have made me hugely successful. And I don’t know what they are charging me, but again my bottom line has grown far beyond my wildest dreams.
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You don’t need a financial advisor.

Start today by creating a ROTH Ira at one of the majors (vanguard, fidelity, etc). Fund the Roth from your checking account and invest the money in something like the S&P 500 or the Total Stock Market Index. Set up an automatic monthly draft from your checking into the account.

That will get you 99.9% there.

Generally I agree, but for those that haven't gotten into the market it can be helpful, especially IF they have crunched all the budget numbers and have a good visualization on where they stand. Some folks need a nudge and a dose of reality when an outsider says; IF you don't do "X" this is where you'll end up..

I really like Vanguard's S&P500 Index it's done well over the long haul.

Chuck, I won’t quibble, if you don’t quibble with the point that many people are intimidated by the idea of going to an “investment advisor”, and therefore never get started at all.

Either way you go, start NOW!

Dutch,

ZERO quibbling! I agree there's plenty of info available free to get the basics down on investing. The ROTH IRA with an Index Fund through a company like Vanguard, with monthly contributions is the easy button and it works..

That I'd start immediately as you suggested.

I think some people don't want to see a 3rd party for the same reason some folks don't want to go to the Dr., they just don't want to hear bad news..

Thank you…. Finished it up today with Vangaurd. Roth opened up and auto pay set to max contributions…. Also stuck another 2500 in a EFT…. We will see how it plays out 🤣

I wanted to buy a piece of land or something else but realized I need more liquidity for my wife if I kick the bucket…. I do have life ins. But saddling my wife/kids with a piece of bare land seems like it would be a hassle?

Thank you all again.

Like usual, Dutch is worth listening to. OP didn’t give lots of details about his situation. If he has a 401K option at work, he may be leaving free money on the table by not using it.

Other basics still apply. Keep some $ available for short term emergencies. Carry adequate life and disability insurance in case of catastrophe. I prefer to live debt free and sleep better that way. Above all, educate yourself so that you understand your savings and investments. That way you’ll know good advice from bad.

Edited to add: With apologies to those more advanced, the book “Personal Finance for Dummies” is a great basic read.

I went through the same decision analysis.

Have 80 acres now, and wanted to put an offer on another 40 adjacent mine.. but, it's all pasture and by the time I got it to where I wanted it for deer hunting I'd have spent substantially more in money and time.

So my solution is just to go on a guided hunt per year in addition to my local hunting.

When looking at the ROTHs, you can also fund a Spousal even if she's not working. That's what I did about 5 years out from retirement. I had already maxed out my TSP (401K) with catchup along with my ROTH IRA, so I just opened a ROTH for my wife and maxed that out too.

Good points, all.

Just some more thoughts.

Making sure your spouse is ok after you pass is part of the process, and the approach depends on where you are in your journey to financial “critical mass”.

Before you’ve built up enough assets, term life insurance is the proper tool to ensure she doesn’t have to buy the “better Alpo” cookbook when you exit early. Once you have substantial assets (enough to live off the investment returns) the life insurance can be dropped.

I would not leave land or other real estate over stocks, two reasons. One, your spouse may not be savvy about the real estate game, dealing with tenants, those type of things. Two, simply because it’s so binary: you can sell a couple of thousand dollars worth of stock to replace a roof, but you can’t sell a tenth of a rental house.

Do some reading and educate yourself. Also, jump in and make some mistakes like the rest of us! Just learn from them. Screw an advisor! They are after your money. Nobody has the vested interest in taking care of your money that you do.