Need advice from experienced investors!

[Scataphagos]

Ok so I tried replying to mostly everyone, and It'll take me a little bit to reply cause I only have time to check this site after I finish my day at school. Also I never said but I currently have $10k saved.

A little update, my family is starting to get into real estate and are looking into buying a couple of additional houses in my town, so:

1) My sister is going to buy a house and is asking me if I want to help her with the down payment, so she said if I give her 3000 she will double it within 4-6 years (I trust her 100% so assume she will pay it) or I can get 100 a month from the rent since she's gonna put it on rent.

2) Also my mom/dad/brother also are thinking about buying another house and they also are wondering if I want to help with the down, this one would be 10% on the principle only(no compounding) every year and a portion of the profit if they decide to sell.



What do you guys think, would these options be better investments of my money compared to investing in the stock market?

That depends upon how the RE market goes over the next few years. Could be lots better than the equities market... could be lots worse.

 

[Scataphagos]

Time playing tennis has the best return of all!

Dig that!

I was proficient in several sports... a professional bowler for 10 years (USBC Hall of Fame locally)... tennis was my 2nd favorite sport. I'd still be playing if I could. My 2nd knee surgery put me on the bench.

 

[piezoe]

Hey guys, I am a 19 year old college student (graduating this year) and want to start investing early as possible so I can retire at a younger age. I have been visiting this website for a couple days now and decided to create an account to get help with my future investments.

My plan that I came up with was that I will mainly stick with blue-chip dividend stocks that will increase dividends every year (Dividend Aristocrats), and plan on reaching and maintaining a 7-10% annual return. Hopefully compounding interest (DRIP) will make my money grow quicker than non-dividend paying stocks. After I graduate I will probably be working within 6-8months (Going to become an Actuary). And my goal by 30 is to have 1 million dollars in dividend paying stocks which means when I'm 40 it will be 2 million dollars (hopefully). This means with the dividends I will be getting a yearly check for around 160K, which I can comfortably live off of for the rest of my life. (Or even retire at 50, which will have 4 million and a 320k yearly check)

Please let me know what you think and if there are any problems that will arise with this strategy. Also if there is a better strategy that you wish you knew when you were young please let me know. Any advice and wisdom from more experienced people will be very much appreciated!

This is an excellent, low risk, high probability of success plan. Take advantage of a self directed Roth Account to the maximum extent you can. The secret is time. And at age 19 time is on your side. Your dividends will compound over many years. You'll want to choose stocks that have a long record of both price appreciation that keeps up with, and preferably exceeds, the long-term average inflation rate and have a history of increasing their dividends. Remember the importance of real return, which is the return discounted for inflation. Oh, and one more thing. Stick to your plan and don't let brokers or insurance salesmen talk you out of it. Those are two of the last places any informed person would want to go for investment advice.

 

[Scataphagos]

1. Scataphagos took the words right out of my mouth. "Dollar cost averaging"
   Ever pay period, buy a fixed dollar amount of SPY; don't mess with mutual funds. During corrections and bear markets you're accumulating more shares at a lower price. During bull markets you're buying less shares that are more expensive.
   Accumulate, accumulate, accumulate!

If I were in OP's position and could invest for the "long term"... at least until he got his capital up to a meaningful size, I'd consider dollar-cost-averaging into something MUCH more volatile than SP anything.

Like... biotech, natural resources, emerging markets. Those have huge runs and huge dives (where the greatest benefit of DCA is gained)... that's the best DCA unless you screw yourself by selling out in a down period. Hopefully the experience of all that volatility would also educate him on "market timing".

 

[qxr1011]

But I mean aren't the Dividend Aristocrat companies going to keep paying dividends (Atleast a very small chance of them stop paying them) so that is kind of a high chance of happening for sure?

they may or may not, they maybe in bushiness today or bankrupt 10 years from now...

dividend is something that company is not obligated to pay

on top of that final result of your investments will be calculated mostly based on the stock performance of the company and not on amount the dividends that they payed (it maybe negligible comparing to stock price changes)

the company may suck in the future, but pay good dividend, so after a while it's not dividend that will matter for you but price of the stock.. if it will tank, the value of your portfolio will tank as well

and finally, investment is a speculation on the value of the company.. payable dividends is just a part of value calculations,.. there many many aspects,tangible and intangible, that investor should keep in mind, when assessing the value of investment vehicle and its possible appreciation

 

[qxr1011]

they may or may not, they maybe in bushiness today or bankrupt 10 years from now...

dividend is something that company is not obligated to pay

on top of that final result of your investments will be calculated mostly based on the stock performance of the company and on amount the dividends that they payed (it maybe negligible comparing to stock price changes)

if company may suck in the future, but pay good dividend, so after a while it's not dividend that will matter for you but price of the stock.. if it will tank, the value of your portfolio will tank as well

and finally investment is a speculation on the value of the company.. payable dividends is just a part of value calculations,.. there many many aspects,tangible and intangible, that investor should keep in mind, when assessing the value of investment vehicle and its possible appreciation

on top of that keep in mind that you investing for very long period of time , lets say 50 years

by that time America may well be bankrupt, and the government will be excessively taxing people like you - savers, they will be paying the bills of non-savers and all other morons

so besides saving and investing you should consider to conceal your money away from Uncle Sam's reach and knowledge... or be prepared to pay for others.. here goes your investment

 

[qxr1011]

i did not put a vote above because all of the options there suggest that investor knows what he is doing , in fact he does not...

and without the method investor is in God's hands...

 

[loyek590]

the reason mutual funds are better for small investors dollar cost averaging is they can purchase exact dollar amounts rather than shares. For instance, you can invest $300/mo and it is all working. At todays price you could only buy one share of SPY and still rest would be in cash. Do you really want to pay commish to buy one or two shares of SPY each month?

 

[Scataphagos]

Saw a quote once which makes a lot of sense....

"There are no growth companies... there are only growth periods."

 

[qxr1011]

Saw a quote once which makes a lot of sense....

"There are no growth companies... there are only growth periods."

very true

and it is up to investor to determine the beginning and the end of the growth period, which means - timing (the word Wall Street does not like) is everything