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    #16


    zerostyle, I used to follow Bogle! Vanguard is a good company. I don't understand why some people pay 2-3% fees to earn 5-10%. They don't seem to realize that they're not really earning 5-10% if those fees exist.


    thmage, opening an IRA is quite simple. You can do it online with the financial institution of your choice, or you can open one in a financial center in person. It's a similar process as opening a bank account. I have been satisfied with Vanguard, but Fidelity is another popular low-fee option.

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      #17


      thmage: start by opening a vanguard account. Also, does your workplace have a 401k? If so, who do they use? (Vanguard and Fidelity are the most popular).


      To invest in those markets without buying separate stocks, you can simply buy mutual funds or ETF's.


      From vanguard, those 3 mutual funds would be:

      VTSMX - https://personal.vanguard.com/us/Fun...FundIntExt=INT

      VGTSX - https://personal.vanguard.com/us/fun...FundIntExt=INT

      VBIIX - https://personal.vanguard.com/us/funds/snapshot?FundId=0314&FundIntExt=INT


      (I prefer the intermediate bond fund just slightly over the total bond index for various reasons).


      I believe the minimum investment is $3000 for most vanguard funds (401k's usually have no minimum though). So, an ideal $10k portfolio here would be $6000 VTSMX, $3000, $1000 VBIIX. You need a minimum of $3k though, so you could probably just wait on the bond fund (or find a way to get it into your 401k.

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        #18


        For the thread's sake: late 20s, only been working a couple yrs due to going to grad school straight through. Lots of student loans (but under 6 figures), but a pretty good income stream.


        I'll second @adivvela's recommendation of the "I will teach you to be rich" book. It's an easy, but very practical read that will teach you about all of the stuff @zerostyle is talking about.


        That being said, @zerostyle's post is a great place to start. My only comments:


        (1) Just wanted to reiterate--if your employer matches any 401k contributions, you're crazy not to contribute enough to take advantage of the entire match. That's actually free money. Free. Money.


        (2) For 2012, the 401k max has been raised to $17k.


        (3) If you make above the threshold for a Roth IRA, check out the "back door Roth IRA" strategy. Won't go into details, but it takes advantage of a loophole in the code and makes it so you can get a Roth regardless of the threshold (at least until they close the loophole).


        For my IRAs, I use Vanguard, which I wholeheartedly recommend. Only issue is that they have pretty high minimums ($3k for most funds).

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          #19


          So being Canadian, we have RRSPs here for retirement. I had massive school debt, about 50k worth and then bought a car eventually etc and a few toys, so I'm almost debt free now but I did get lucky and land a very good job by most standards.


          My main funds are in my RRSP Brokerage account(was worth a lot more but F YOU WORLD ECONOMY!) (I also took out of this for my first home purchase) I'm being agressive with this investing in undervalued Canadian gold ventures with proven resources as the entire venture stock exchange up here is very poor sentiment. Why? because I won't be taking any money out of this due to penalties so I may as well let them mature into full fledge gold producers.


          And about 1/3 my RRSP Brokerage value is sitting in a a RRSP Savings account in cash


          And finally I have another account with cash that's required for companies stock options which hopefully vest, for either a rental property(our housing market is still decent up here)


          The rules were, if you're under 30 invest some risky if you have quite a lot of excessive income you can aford to risk and of course put some into solid low/no risk. then after that you go a more solid route.


          I will point out that I've lost quite a lot after the market crash, this was in part to my own greed as I was up quite a lot at one point. Lesson learned the hard way!

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            #20


            i basically follow dave ramsey's 7 baby steps - http://www.daveramsey.com/new/baby-steps/


            his book total money makeover changed my life when i was struggling with almost 30k of credit card debt. i had no idea of how to budget or manage money, but after going through it im now debt free except my house [and 1 car lease which im working on]


            "Total Money Makeover" book [amazon referral]: http://www.amazon.com/gp/product/159...g=lotentinc-20

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              #21


              I started work 3 years ago and have been contributing 12% to my 401K since then (+3% matched by my employer), so i feel pretty good about that bit. I always pay my credit cards in full every month so no worries about credit card debt, and thanks to the Hope scholarship and generous and financially responsible parents I made it out of college debt free.


              That being said, I feel like there is a lot more opportunity out there to handle my money better. While I live fairly comfortably, I seem to just be treading water in the savings and investing aspects (with exception to the 401k). Do you think a (roth) IRA would be good idea in addition? I have some money in the stock market, but I honestly don't mess with it very often, and while it recovered nicely from the recession, it's been pretty stagnant as of late.

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                #22


                Deke -- Is the money in the stock market in a taxable account? If so, I'd definitely move that into a Roth IRA if at all possible (or at least invest thru a Roth going forward); you're essentially paying taxes on investments (made post-tax) when you could be investing it with no tax on the gains in the Roth.

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                  #23


                  I am terrible at saving money so I have found the best way to do this is to hide money from myself. I do this in a few different ways


                  1. Stocks - yes I know they are risky but you can still find conservative stocks and ones with dividends. I use capital gains as a barrier to not taking my money out of the market and buy more shares on downturns. I also reinvest the dividends.


                  2. Long term CDs - I know the interest rate sucks but this is a great way to sock money away while still earning something. The early withdraw penalty keeps me from touching this money


                  3. 401k and Company Profit sharing - While my company doesn't match I still feel that this is one of the easiest way to save for my family's future. Also my company pays profit sharing which has been 8% to 10% of gross salary for the last 3 years.


                  We just had our second child so my regualr saving account is pretty low right now. I need to build back up the emergency fund. One way I am trying to do this is by running a zero balance checking account. We run a strict budget and whatever we have left after bills and expenses goes directly in to savings. This is on top of the 10% we take from my paycheck for savings. This is a good method for us as my wife is a freelancer.

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                    #24


                    I have a Fidelity account, their ROTH setup is pretty quick and easy. Woah, I've never seen so many people go past their max on their 401! I'm at 12% personally. Also, whule not for everyone, a Flex Spending Account is recommended, especially those with kids. I personally don't, but I set it aside for dental care, checkups, and possibly Lasik next year.

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                      #25


                      One more comment to add to the mix, which helps me a ton... (bremers reminded me of this, as I have trouble voluntarily saving)


                      Automatize your finances. I have my direct deposit automatically split between checking and savings, then my savings automatically transfers portions of the money sent to it into other savings accounts (I have separate accounts for emergency savings and general (out of which I pay my student loans)). It keeps that cash away from my grubby little hands and makes me save it.


                      The "I will teach you to be rich" book explains how to do this pretty well (last plug, I swear, but I truly believe it's a great book... I re-read it every so often just to remind myself of things; some things are outdated (e.g., the interest rates quoted, max contribution amts), but its well worth the money to buy a copy).

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                        #26


                        @hornsup: Mind if I email you a few questions about the ROTH back door strategy? I think this year or next I'll hit the ROTH limit and will start having to look into that. Also had some general questions about traditional IRA's.

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                          #27


                          I have a rule against posting my email out in the open -- if you post yours, happy to shoot you an email and answer Qs to the extent I am able (with usual caveats of not financial or legal advice, etc.).

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                            #28


                            Ya, I'll setup a junk email address so we can exchange. Annoying as hell that you can't PM members on this forum.

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                              #29


                              Cool, I'll check back this afternoon.

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                                #30


                                zerostyle, patience, grasshopper. It is coming.

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