When I was in college I started to invest a couple of bucks a month in a mutual fund. The guy I went with was a nice guy but he had to sell his company's terrible products. After two years of going nowhere in a fund that was way to expensive I consulted another guy on the phone hoping for better results. This guy was nice too but he didn't have a perfect set of products either (and he was 5000 miles away in Alabama at the time...). After that conversation I knew no one else could teach me this money stuff better than I could. Can you tell I was a self-taught homeschooler? I started by reading a couple books on the subject (the best one was The Total Money Makeover: A Proven Plan for Financial Fitness
). Ever since then I have been reading finance/investing books at the rate of about 1 or 2 per month. I'd say this is solidly in the "hobby" category at this point.
I have some simple investing rules:
-If you can't explain it you shouldn't put any money it.
-If it's a complicated fund strategy it's wrong.
-Diversify
-Needs a long, good track record
-"Roth" is a million dollar word (hopefully more than just one).
-Barring serious catastrophe, invest every month forever.
I was talking to one my kids (one of my 20 year old Airman, they're my kids) about investing. I am comfortable telling him to invest in something as simple as the Vanguard Total Stock Market Index (VTSMX) until he gets a little smarter. Once he learns a bit more about funds and personal finance in general it's good to diversify into some other types of funds. Until then the VTSMX is big, diverse, and nearly free to own at 0.17% per year. Yes, the decimal point is in the right place. All this fund does is track the stocks of public companies based on their value (called market capitalization). Open in a Roth account, and start saving. Just start, thats what I tell all my "kids" anyway..
If you ever want a free assessment of your mutual funds and investments just let me know. Most places charge $250 or more for that, I'll do it just for fun.
). Ever since then I have been reading finance/investing books at the rate of about 1 or 2 per month. I'd say this is solidly in the "hobby" category at this point. I have some simple investing rules:
-If you can't explain it you shouldn't put any money it.
-If it's a complicated fund strategy it's wrong.
-Diversify
-Needs a long, good track record
-"Roth" is a million dollar word (hopefully more than just one).
-Barring serious catastrophe, invest every month forever.
I was talking to one my kids (one of my 20 year old Airman, they're my kids) about investing. I am comfortable telling him to invest in something as simple as the Vanguard Total Stock Market Index (VTSMX) until he gets a little smarter. Once he learns a bit more about funds and personal finance in general it's good to diversify into some other types of funds. Until then the VTSMX is big, diverse, and nearly free to own at 0.17% per year. Yes, the decimal point is in the right place. All this fund does is track the stocks of public companies based on their value (called market capitalization). Open in a Roth account, and start saving. Just start, thats what I tell all my "kids" anyway..
If you ever want a free assessment of your mutual funds and investments just let me know. Most places charge $250 or more for that, I'll do it just for fun.
If my memory is serving me correctly, you first picked up "Total Money Makeover" during a visit to our house. So if that's correct, I would like to take just a little credit for your financial savvy and appetite for learning more. You have been willing to "live like no one else, so that later you can live like no one else." I love how you are mentoring your "kids" in this area. Very much agree with your Roth advice - just had a conversation with Josh about it.
ReplyDeleteDear Google -
ReplyDeleteI can assure you I am not a "robot" making random comments on blogs. Evidently I'm not a "human" either, because I can rarely enter the correct letters and numbers on my first try from the scrambled "stuff" you put in front of my face.
Signed: a real person in Minnesota
Hmmmm.....I wonder why the time of my comment shows up as two hours earlier than my CST....
ReplyDeleteAh yes, trying to read those letters to enter a comment. I've been foiled many a time. I will let you take all the credit for helping Philip along on this wonderful journey. Team Parenting I call it!!!
ReplyDelete