Help me become a millionaire...

[markb5900]

My only advice Nick is to make sure you do what ever you are going to "within" an IRA since you said this was for retirement. Keep you out of those nasty capital gains taxes.

 

[bqmassey]

My only advice Nick is to make sure you do what ever you are going to "within" an IRA since you said this was for retirement. Keep you out of those nasty capital gains taxes.

Yea, and capital gains tax isn't going down anytime soon...

Hundred billion bail outs + President Obama.... Hello Taxes!

 

[docmirror]

Since when are commodities safe?

Oh, did I say that?

I was going to be brief, but since I've been hoist on my petard, I'll try to give a bit more. The NYMEX and all other commodities markets operates on two basic philosophies. Hedges and speculation. All you ever hear about in the commodities market are the speculators side. These are the brave boys of the 'derivatives' market.

The most recent media frenzy has been with the oil speculators. You know, those guys that keep putting futures of oil into the + $100 territory. Yep, they made good money for a few weeks, now a lot of them are pulling their hair out depending on the position they're in.

The hedges folks. They are the guys that bet we will be able to grow, and sell wheat, soybeans, corn, and cane next quarter, and then following quarter, and so on. The price of corn(futures) is boring to a fare-thee-well. It's delta Q(basic volatility) has been very low for a long, long time.

Why? Because last year we produced a bunch of corn, this year we'll be producing a bunch of corn, and next year we'll produce a bunch of corn - yawn. So, yes the commodities market can be very volatile if you are on the speculator bus, I should have put hedge in there somewhere to make it clearer.

Now, as for my personal background, I've make mid-six figures in the market. I've also lost a fair amount, recently I lost a nice chunk. It'll come back, it's only loss on paper if I sell, or cover -neither of which I'm doing right now. What I am doing is looking closely at gold right now. I had some gold back in 02, and it was pretty stagnant, so I got out. Wish I still had it now. Like most, I have 20-20 hindsight.

 

[alaskaflyer]

What I am doing is looking closely at gold right now. I had some gold back in 02, and it was pretty stagnant, so I got out. Wish I still had it now. Like most, I have 20-20 hindsight.

It strikes me that - unless you are in the business of mining it - gold is good for a hedge but probably not much else. Present circumstances as an excellent example.

 

[ScottM]

Nick, Don't buy individual stocks right now. From your posts you frankly, as most people, do not have the knowledge to know which ones to pick. It is far better to share your risk by buying mutual funds that are focused on specific type of growth. I also suggest that you do dollar cost averaging. Sounds complicated but all it really does is let you buy X-dollars of a fund each month. They take say $50/mo out of you account and that will buy $50 worth of shares. Sometimes you are buying low sometimes not but your growth tend to be very smooth and less of a risk over time.

After saying all of that, do you have access to a 401k? If so that should be where you are investing first. That is pre-tax money that is being set aside for your retirement. If you do not have a 401k then you should be buying into an IRA. Again that is pre-tax money. By using pre-tax money you can lower your tax burden and may not even affect your take home pay.

 

[ScottM]

It strikes me that - unless you are in the business of mining it - gold is good for a hedge but probably not much else. Present circumstances as an excellent example.

I have two gold Maple Leafs. They have doubled in price. I bought them more to be able to look at my money instead of staring at a piece of paper. I am thinking of selling them and buying a 496 with the proceeds.

 

[bbchien]

Nick you cannot "time the market" but for certain the fundamentals are TERRIBLE right now and now is NOT the time. Soon (3-6-mos), but NOT NOW.

 

[docmirror]

It strikes me that - unless you are in the business of mining it - gold is good for a hedge but probably not much else. Present circumstances as an excellent example.

Yes sir. Hedge city. It's too late to make a strike move on gold now.

 

[Greg Bockelman]

Nick you cannot "time the market" but for certain the fundamentals are TERRIBLE right now and now is NOT the time. Soon (3-6-mos), but NOT NOW.

So, you figure there is more down potential to the market over the next 3 to 6?

 

[bbchien]

Yes, I do.

I sold a huge boodle on on 15th losing about 4%. But this won't be over unless there is a Resolution Trust Co. type structure build. There are at least fifteen more, smaller brokerage houses in difficutly and innumerables banks.

 

[SkyHog]

Nick, Don't buy individual stocks right now. From your posts you frankly, as most people, do not have the knowledge to know which ones to pick. It is far better to share your risk by buying mutual funds that are focused on specific type of growth. I also suggest that you do dollar cost averaging. Sounds complicated but all it really does is let you buy X-dollars of a fund each month. They take say $50/mo out of you account and that will buy $50 worth of shares. Sometimes you are buying low sometimes not but your growth tend to be very smooth and less of a risk over time.

After saying all of that, do you have access to a 401k? If so that should be where you are investing first. That is pre-tax money that is being set aside for your retirement. If you do not have a 401k then you should be buying into an IRA. Again that is pre-tax money. By using pre-tax money you can lower your tax burden and may not even affect your take home pay.

I am not being argumentative at all, Scott, but let me ask you a question:

If I have xx number of dollars, and I plan to do nothing with it whatsoever except maybe go to a blackjack table and gamble it there....is there any difference between that and playing that xx number of dollars on a single stock?

Everyone seems to make a really big deal about the possibility of someone just lucking into a decent investment (or possibly losing everything he put in, which was 100% pure disposable income to begin with).

Its not going to put me on the streets. Its either going to make me money, or its going to disappear.

edit: Also, I had a 401(k) when I worked for T-Mo. I also have an IRA, and I need to roll that 401(k) into the IRA. This is different

 

[SkyHog]

My only advice Nick is to make sure you do what ever you are going to "within" an IRA since you said this was for retirement. Keep you out of those nasty capital gains taxes.

I don't think I did say it was for retirement, but if I did, it was a mistake. This is for a little bit of fun that doesn't involve driving to an Indian Reservation to plop money on a table.

 

[ScottM]

I am not being argumentative at all, Scott, but let me ask you a question:

If I have xx number of dollars, and I plan to do nothing with it whatsoever except maybe go to a blackjack table and gamble it there....is there any difference between that and playing that xx number of dollars on a single stock?

Most of the time most people have no idea how to pick a stock. They really hav eno insight into future performance of a company nor do they have the expertise to know how to find that info. It is much easier to pick a mutual fund that spreads that risk around. If you want to bet everything on number 5 to win at the track then do that type of investing, but if you want to increase your odds of winning you bet on the least risky method.

 

[flyersfan31]

Vanguard Index 500.

If you don't know finance, accounting, basic investing, you're just gambling. 80% of mutual fund managers never beat their benchmark. The benchmark's benchmark, as it were, is the S&P 500. Put your money in, let it ride. Make every dollar work for you - don't say "Bah, it was only $500" if all you have is $600.

Slow and steady wins the race.

 

[docmirror]

Ok, this single stock debate brings me out of seclusion again. There are single stock picks, and then there are 'single stock picks'.

Let's take KO(Coca cola). Been around 100+ years, pays a dividend every year(I think), great market, great capitalization, great history. Except for the 'new Coke' fiasco a while back has been a front runner forever. Conservative? Yes. Good single stock pick? Sure, why not. Oh yeah, the OP wants to be a millionaire soon. Can't do that with Coke stock.

So, we have to get creative. Hmm, what single stock would I pick right now? Well, I can't say, cause I may just put money in them tomorrow. Point is, there are plenty of Lehman Bros, and Enron, but there are also a lot of companies like Goodyear(GT), or Baxter(BAX) out there.

 

[Joe B]

If I have xx number of dollars, and I plan to do nothing with it whatsoever except maybe go to a blackjack table and gamble it there....is there any difference between that and playing that xx number of dollars on a single stock?

Yes, unless you were just joking in the title to this thread. The first rule of investing over the long run is to preserve the money that you're putting in. A secondary but highly desireable goal is to make your starting pot bigger. If you seriously want your investments to help you down the road to becoming a millionaire, then you need to study everything you can get your hands on about the companies you're buying as well as their industries plus what the stock market thinks about both at the moment. And keep this up while you are invested in the security. Your objective is to be better educated or smarter than the other guys out there who are doing the same thing. Or you have to find (and pay) someone who will do that for you.

OTOH you can figure it's a game and it's play money. Then you are welcome to put your money into whatever you want because it doesn't matter any more than it does at the blackjack table. And, in the long run, you'll make as much money as you do at the table. But you really don't need our advice for that - you can throw your money away any way you want that gives you giggles.

 

[bqmassey]

It's simple math folks. Simple. Math.

Tell me what's riskier.

1.) A 20% chance that you'll beat the market
​

OR

2.) A 50% chance that you'll be the market
​

Well... choice number one represents MUTUAL FUNDS... where ONLY 20% BEAT THE MARKET

Choice number represents opening the WSJ, pinning it up on the wall, throwing a dart at it, and (assuming you hit the paper), putting your money into whatever stock you put a hole through.

If you practice a little judgement, ignore hype, and don't let your emotions make your stock picks.... you can reliably pick a stock that's in the better half. Hell.. you have a 50/50 chance just by random selection.

That's why I say, if you don't have time to learn and do homework.... get into AN INDEX... NOT A MUTUAL FUND.

Simple. Math.

 

[alaskaflyer]

I don't think I did say it was for retirement, but if I did, it was a mistake. This is for a little bit of fun that doesn't involve driving to an Indian Reservation to plop money on a table.

I consistently win at the poker table, and it is much more fun than investing!

That being said, I think what people are saying is go slow, and do your homework, not just before, but during. Which is what your OP indicated you want to do - I salute you!

 

[docmirror]

How to look like a stock genius:

Call 100 people a week and tell 50 of them; 'stock xyz will go up next week'. Tell the other 50; 'stock xyz will go down next week'. You will be right with half of your prospects. Next, of those 50 you had right, tell 25 of them; 'stock abc will go up next week', and tell the other 25; 'stock abc will go down next week'. You will be correct with 25 of the prospects. Call them back and say; 'I've been right both weeks, invest with me'. Or, keep whittling until you get several investors.

 

[Richard]

Nah. I heard a radio ad guaranteeing 12% just last week.

hahahahahahahahaha...Mike, I laugh with you.


Nick, why in the hell are you even thinking of this???? Don't you have a business to bootstrap?

 

[Greebo]

Books to read:

The Millionaire Next Door - Dr. Thomas Stanley
The Millionaire Mind - Dr. Thomas Stanley
The Total Money Makeover - Dave Ramsey

Steps to becoming comfortably rich:
1) Live on less than you make. Do not finance anything.
2) Live frugally - be wise with your money.
3) Invest long term. Short term market plays are a great way to lose money.
4) Plan on getting rich SLOW. Get rich Quick doesn't work. For every 1 who gets rich quick there are hundreds and thousands who lost their shirts trying the same thing.

 

[Greebo]

bqmassey: If you randomly pick a mutual fund from a hat, your chances are 1 in 5, agreed.

If you pick funds carefully, the odds are much better.

OTOH single stocks, while able to do much better if picked carefully, carry much more risk as well.

I don't need to "beat the market" - I just need to make a decent profit. The market, on the whole, makes money on the long term quite nicely. I'm happy matching the market, long term.

 

[Cap'n Jack]

<SNIP>

Steps to becoming comfortably rich:
1) Live on less than you make. Do not finance anything.
2) Live frugally - be wise with your money.
3) Invest long term. Short term market plays are a great way to lose money.
4) Plan on getting rich SLOW. Get rich Quick doesn't work. For every 1 who gets rich quick there are hundreds and thousands who lost their shirts trying the same thing.

This is some of the best advice I've seen posted in this thread. It works. Save early and often.

 

[PittsDriver]

So - in about a week, I will have some money to throw at some companies. Last time I looked, I needed like $1500 to even start to invest. I will have $400-500. Where do I go to get involved? Any suggestions?

Aren't you going to need to put that money to work on your RIAA defense fund?