1 month NOOB INVESTING update

[vindikation]

1 month ago I had $70,000 sitting in a checking account gaining 0% interest and I didn't know the difference between an Individual Retirment Account and the Irish Republican Army. My main reason to research investing was because I couldn't afford to purchase a house in Los Angeles (where I live) and I didn't want to complain about it. I am 35 and wanted to do something and try to make my savings work for me in the short term while I saved my money for a home and retirement.

Well after one month of noob posts, a lot of internet research and reading many books on investing, I can happily say that I've learned a lot, but am still a novice. After purchasing a new car with cash 4 weeks ago I was left with $50,000 in my checking account gaining 0% interest. These are the steps I took to start investing:

1). Opened up an new online Scottrade account with $5000 and invested in 3 stocks (DELL, SNE, OSI). This was not a good idea, but much like playing poker I wanted to jump in and give it a try, I shouldn't have done this, but that's why I only did $5000 and not $50,000 for this adventure.

2). Deposited $4000 into a new Scottrade ROTH IRA account. This is split evenly between two Mutual Funds (Mid Cap Index Fund, and Global Equity Fund).

3). Changed my non matched 401k at work from 0% to 2% (currently have ~ $6000 split in an Index Fund and Diversified International Fund from deposits made 4 years ago)

4). Opened up a Met Life online 3.5% Money Market Account and deposited $35,000. I want to keep $10,000 permanently in this account and invest $25,000 in stocks and Mutual Funds...but...until I feel more confident in my investing knowledge I'm letting the money sit.

5). $5000 currently remains in checking, but I'm getting ready to transfer more in the Money Market account. Maybe leaving around $2000 in checking.

FUTURE GOALS
1). Take $15,000 and invest in Mutual Funds and/or ETF's.
2). Take $10,000 and add that to my $5000 Scottrade account and set up 10 individual stocks and create my own diversified portfolio using $15,000.

I didn't really want to post this, but I said I would. Thanks a lot for answering my stupid questions...I'm sure there will be plenty more in the future.

[Sniper]

A good example of starting to put your money to work for you.

nice post vind!

[Python49]

i'm ignorant about investing but arent roth IRA retirement accounts? A friend and a few others suggested I invest in them but with roth IRA dont u have to wait until you are like 70 years old before you can get your money? Also, isnt there a max amount per year you can deposit and it has to be from your after-tax income? if i dont have any legitimate income for the year, doesnt this mean I can't invest in roth ira?

[1C5]

Cool, my adventure starts next week when my $15,000 check clears at Ineractive Brokers.

Will give updates of my trades and thoughts behind my trades...

[vindikation]

Yeah the ROTH IRA and 401K are retirement investments. I just wanted to put something in there now, so that I can take advantage of compounded interest 30 years later. From now on, I'm probably only going to put in $1000 a year into each of these accounts. When I have more money saved up I'll start putting more in them.

[Puss In Boots]

[ QUOTE ]
i'm ignorant about investing but arent roth IRA retirement accounts? A friend and a few others suggested I invest in them but with roth IRA dont u have to wait until you are like 70 years old before you can get your money? Also, isnt there a max amount per year you can deposit and it has to be from your after-tax income? if i dont have any legitimate income for the year, doesnt this mean I can't invest in roth ira?

[/ QUOTE ]

For ROTH IRAs, it's 59 and a half, not 70 to withdraw tax-free. It's 10% before then. I believe you can also get a tax free withdrawal for purchasing a first home at any age as long as it's been there for 5 years. And yeah, it has to be after-tax income that you put in there.

[ QUOTE ]
[ QUOTE ]
i'm ignorant about investing but arent roth IRA retirement accounts? A friend and a few others suggested I invest in them but with roth IRA dont u have to wait until you are like 70 years old before you can get your money? Also, isnt there a max amount per year you can deposit and it has to be from your after-tax income? if i dont have any legitimate income for the year, doesnt this mean I can't invest in roth ira?

[/ QUOTE ]

For ROTH IRAs, it's 59 and a half, not 70 to withdraw tax-free. It's 10% before then. I believe you can also get a tax free withdrawal for purchasing a first home at any age as long as it's been there for 5 years. And yeah, it has to be after-tax income that you put in there.

[/ QUOTE ]

In a Roth IRA You can withdraw your contributions at any time tax-free... the earnings are what you get penalized for if you remove them before retirement. Also, right now $4000 is the max you can contribute per year.

[greg nice]

[ QUOTE ]

In a Roth IRA You can withdraw your contributions at any time tax-free... the earnings are what you get penalized for if you remove them before retirement. Also, right now $4000 is the max you can contribute per year.

[/ QUOTE ]

do you know if this is also true fore regular IRA and SEP-IRA?

[KKrAAAzy88s]

[ QUOTE ]
do you know if this is also true fore regular IRA and SEP-IRA?

[/ QUOTE ]

not trying to be a jerk, but u can find out at www.irs.gov. Things will change in the future and that is probably the best place to find the up to date answer. I know at least the roth IRA contributions will be going up in the next few years.

[midas]

Vind-

You should be maxing out your 401K contribution because the gov't is picking up part of the tab.