Help me become a millionaire...

SkyHog

SkyHog

Touchdown! Greaser!
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Everything Offends Me
Ok, so I've decided with the economy going to crap, nows a good time to figure out this whole stock market thing.

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?

I already know what companies I'll be buying, and I know I'm gonna make a killing (lol!!), but I get so lost just trying to get started.
 
A good growth or aggressive growth mutual fund. And that can be done with as little as $100.00 in some funds.

The thing is with mutual funds you spread your risk around on many good companies. With just one or two individual stocks, all your eggs are in just those couple of baskets, so to say.

Also, what you want to do is make regular investments over time. If you invest just $100 a month for the next 40 years, ESPECIALLY in a Roth IRA, you will reach your goal at least a couple of times over. It will take a while, but there are very few (none?) get rich quick schemes that actually work.

Did I say ROTH IRA??? Look it up. You might just like what you see.
 
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Nick, go to daveramsey.com and then ELP (endorsed local providers). You can find a good teaching broker there.

Wen you get your first million, don't forget who gave you this advice!:D
 
SkyHog said:
Ok, so I've decided with the economy going to crap, nows a good time to figure out this whole stock market thing.
...
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Greg Bockelman said:
A good growth or aggressive growth mutual fund. And that can be done with as little as $100.00 in some funds.
...
Click to expand...

http://vanguard.com/

It might be a good time to buy in. It might be a time when you see half of your money go*poof*. :D (Just like the rest of us. :redface:)
 
Ahh, the most important question was answered by myself by just taking the plunge and signing up for an account with Scottrade.

Yay.
 
SkyHog said:
Ahh, the most important question was answered by myself by just taking the plunge and signing up for an account with Scottrade.

Yay.
Click to expand...

Scottrade is good.

You shouldn't be buying individual stocks but have fun. I did. I just now closed my account (not there.)

You don't get to deduct any monthly account fees, but I don't think Scottrade charges them.
 
SkyHog said:
Ok, so I've decided with the economy going to crap, nows a good time to figure out this whole stock market thing.

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?

I already know what companies I'll be buying, and I know I'm gonna make a killing (lol!!), but I get so lost just trying to get started.
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Nick,

I asked this same question here a year or two ago and after looking at all the responses, I went with Charles Schwab. They've been truly excellent. :yes: You can do all the trading you want online, they have a LOT of documentation available for you to read and learn more, and if you have a problem, unlike the online-only brokers, you can simply go to your local Charles Schwab office for help.

Oh, and after I opened my account and played around a bit, maybe a week after I opened the account, THEY called ME and asked if I had any questions or if they could help me at all. I think I kept the guy on the phone for about 45 minutes asking questions about some of the more odd types of trades, exactly how various kinds of orders worked, etc. He was very helpful.

I'm a very happy customer.

http://www.schwab.com/
 
Making individual investments in the stock market should be like any other gamble you take - only lay down money that you can afford to lose. So I recommend putting some in a ROTH IRA or other long-term retirement plan, and then "playing" a little.

Someone was talking about $350/mo at 10% ... finding something that will consistently return 10% for 30 years is quite a trick.
 
TMetzinger said:
Someone was talking about $350/mo at 10% ... finding something that will consistently return 10% for 30 years is quite a trick.
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According to most all of the financial people I listen to the S&P 500 has done better than that over it's history.
 
I believe that's true, but there were periods in there... If you'd put your money in there 30 years ago, you'd have been happy until Tuesday, no?

I guess I'm just saying that timing is everything, and you might find yourself in a situation where you made great returns for 25 years, the last 3 were crap, and you can't afford to retire in 2 - you may have to wait a few more.

I like the new funds that start off with a riskier/higher return mix, and gradually reduce the risk and return as you reach your target date. It does for the customer what most of us do anyway - rebalance the investments to reflect our changing circumstances.
 
TMetzinger said:
I like the new funds that start off with a riskier/higher return mix, and gradually reduce the risk and return as you reach your target date. It does for the customer what most of us do anyway - rebalance the investments to reflect our changing circumstances.
Click to expand...

One example: Fidelity's Freedom Funds

Fidelity.com said:
Freedom Funds have an asset allocation mix among stocks, bonds, and short-term instruments that is more aggressive when you're younger and becomes more conservative as you near retirement. Pick the fund with a target retirement date closest to when you want to retire, and Fidelity's expert money managers will do the rest.
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Disclaimer: I do work for Fidelity.
 
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I've sworn off the stocks, having been on the losing end during the past five years.
In stead I've recently gone with

ACAS – American Capital
AKF – Ambac debentures
EVV – Eaton Vance Limited duration income fund
FCZ – Ford Motor Credit
KEY pfd a – Key cumulative preferred a
MWO – Morgan Stanley Capital Trust V cumulative

Those funds return a guaranteed 9.5% annually, paid quarterly; that being a heck of a lot better than the 1.5% the bank's been paying.

HR
 
Lawreston said:
I've sworn off the stocks, having been on the losing end during the past five years.
In stead I've recently gone with

ACAS – American Capital
AKF – Ambac debentures
EVV – Eaton Vance Limited duration income fund
FCZ – Ford Motor Credit
KEY pfd a – Key cumulative preferred a
MWO – Morgan Stanley Capital Trust V cumulative

Those funds return a guaranteed 9.5% annually, paid quarterly; that being a heck of a lot better than the 1.5% the bank's been paying.

HR
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How do they do that? For example, I never paid Ford Credit more than 2.9% on a car loan- often 0%. How do they pay you 9.5%? Their compound yield is 4.48% if you give them at least $50K. I doubt there is anything that gives a guaranteed 9.5% although I congratulate you on your returns & hope I'm wrong.
 
TMetzinger said:
I believe that's true, but there were periods in there... If you'd put your money in there 30 years ago, you'd have been happy until Tuesday, no?
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Sept 19, 1978 - Sept 19, 2008 the DJIA returned a bit over 9%. Sept 19, 1948 - Sept 19, 2008 returned 7.25%.

I don't think 10% annualized is not that outrageous of an expectation.

James Dean
 
Lawreston said:
I've sworn off the stocks, having been on the losing end during the past five years.
In stead I've recently gone with

ACAS – American Capital
AKF – Ambac debentures
EVV – Eaton Vance Limited duration income fund
FCZ – Ford Motor Credit
KEY pfd a – Key cumulative preferred a
MWO – Morgan Stanley Capital Trust V cumulative

Those funds return a guaranteed 9.5% annually, paid quarterly; that being a heck of a lot better than the 1.5% the bank's been paying.

HR
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Cap'n Jack said:
How do they do that? For example, I never paid Ford Credit more than 2.9% on a car loan- often 0%. How do they pay you 9.5%? Their compound yield is 4.48% if you give them at least $50K. I doubt there is anything that gives a guaranteed 9.5% although I congratulate you on your returns & hope I'm wrong.
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Ditech is GMAC. Maybe FMC is also doing mortgages. Another thing is "not everyone qualifies" for the 2.9% and 0% rates. I'll bet a lotta of the same "subprime" folks with the ARMs also have car loans on SUVs at 12% APR or higher. Ford Motor also subsidizes those 0% loans somehow.

Those are some of the money market funds that GW just said require the U.S. to provide "insurance" beacause one of them just got to 97 cents on ther dollar.

Morgan Stanley! :hairraise:

(He says. One of my funds is the Vanguard REIT Index fund I put a little money into because I wanted to cash in on real estate. I'm afraid to look.)

BTW, when I asked how you hedge against inflation the answer, of course, was real estate. :hairraise: Not no more.
 
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SkyHog said:
Ok, so I've decided with the economy going to crap, nows a good time to figure out this whole stock market thing.
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The advice of others about funds is good... invest regularly, consistently. Your comment about investing now, while the economy is in the toilet, is also spot on. Never invest chasing bull/bear swings--timing the market is the best way to lose.

Invest the same amount on a regular basis, and when you have extra you want to invest (as you do know), it's just icing on the cake when it occurs when the market is in a downcycle. Whether it is individual funds or stocks, the share prices are down, so you're getting more shares for your money--more shares that can compound and grow their value as you hold them til retirement.
 
How did you make out on the wiring job you were going to bid on? One of the best ways to become a millionaire is to own your own business. Might end up with a million in equity and not much cash, but you'll be a millionaire!



Eggman
 
SkyHog said:
Ok, so I've decided with the economy going to crap, nows a good time to figure out this whole stock market thing.

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?

I already know what companies I'll be buying, and I know I'm gonna make a killing (lol!!), but I get so lost just trying to get started.
Click to expand...

Learn to handicap horses well, you can beat the market...;)
 
James_Dean said:
One of the best ways to become a millionaire is to own your own business.
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Curiosity: How many eggs per year would it take to net a cool million in annual profit, and how many chickens would you have to have to support such an operation?
 
TangoWhiskey said:
Curiosity: How many eggs per year would it take to net a cool million in annual profit, and how many chickens would you have to have to support such an operation?
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A well run "traditional" commercial operation can net a buck a bird per year on average. This facility would be no less than a million birds. Our company considers an economic unit to be no less than four million birds, but we are in the liquid egg business and that is a different beast than a carton egg facility. A small "free range" operation can do quite a bit better than this on a per bird basis, but the up front capital costs are sobering. Probably $50/bird space for a 20,000 bird operation.

Big part of the equation is that the industry is terribly cyclical and two years of big losses are not uncommon. Last five years have seen 600% swings from the top to the bottom in the price of a naked egg. Feed is usually over 50% of cogs and when corn goes from $2 to $7, well...... It helps that because the animal life span is less than two years the IRS lets us use cash accounting. There is a really good reason that there is only one large egg production company in the country that is publicly traded - CALM.

This is my next project. http://www.wattpoultry.com/EggIndustry/news.aspx?id=25616



Eggman
 
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This thread is riddles with so much terrible advice.

Nick:


  • Find a good, low cost broker. I recommend TradeKing or TD Ameritrade.
  • Do NOT invest in mutual funds. Mutual funds are for people too lazy to do homework. You really REALLY limit your chances at getting rich by investing in mutual funds.
  • READ, READ, READ. There is so much knowledge out there to soak up. "Rule #1" by Phil Town, "Technical Analysis using Multiple Timeframes" by Brian Shannon, "The Intelligent Investor" by Ben Graham are some books I'd recommend. Jim Cramer's books are good, too, for the most part.
  • Consider paper trading. Check out CAPS. It's a good place to see how good ya are.
  • Pay attention! If you're going to invest in stocks, you have to pay attention to them. You WILL lose money in stocks if you don't check on them and news that might relate to them.
 
I used to be a hudredaire, now I'm a thousandaire. I'd be farther along but the EX took most of it with her. And the best way to lose friends is to listen to their financial advice. If we were good at it, we'd all be flying late model aircraft and driving new cars. Mine is 25 years old (plane and cars).
Find a professional with a good track record. Get references like you would with contractors. Check with your state to find out how they're licensed or regulated.
 
As noted above, there is no one investment model to fit all people - e.g. index fund if you want lower risk and don't have time to do the research, individual stocks if you're retired and have all day to study stock reports.

As I stated in another post - there is no such thing as "no risk", everything has risk and is priced accordingly. The general rule is that if something is paying you more there is higher risk. If you don't understand what comprises the risk then don't buy it.

A general rule I heard the other day was that if you need the money within the next 10 years it shouldn't be in the stock market.
 
bqmassey said:
This thread is riddles with so much terrible advice.
Click to expand...

I just KNEW someone would say that. Nick, this thread is riddled with more GOOD advice than bad.

  • Find a good, low cost broker. I recommend TradeKing or TD Ameritrade.
  • Do NOT invest in mutual funds. Mutual funds are for people too lazy to do homework. You really REALLY limit your chances at getting rich by investing in mutual funds.
  • READ, READ, READ. There is so much knowledge out there to soak up. "Rule #1" by Phil Town, "Technical Analysis using Multiple Timeframes" by Brian Shannon, "The Intelligent Investor" by Ben Graham are some books I'd recommend. Jim Cramer's books are good, too, for the most part.
  • Consider paper trading. Check out CAPS. It's a good place to see how good ya are.
  • Pay attention! If you're going to invest in stocks, you have to pay attention to them. You WILL lose money in stocks if you don't check on them and news that might relate to them.
Click to expand...

I will agree with this with the exception of the comment on mutual funds. Mutual funds are a GREAT way of investing if you don't have the time, patience or aptitude to follow all the CRAP you have to follow to make good individual stock investment choices.

If one is hell bent on investing in individual stocks then the list above should be considered MANDATORY.
 
jesse said:
bqmassey said:
This thread is riddles with so much terrible advice.
Click to expand...

More advice: Worst way to make friends on a forum. See above.
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Was it my misspelling? Sorry... I meant "riddled".



I shouldn't have been quite so abrasive, but really, read an objective (like.. not by a company that sells mutual funds) piece about the risk and performance of mutual funds vs the indexes. Mutual funds are TERRIBLE investments.

It doesn't take a lot of time to keep up with your stocks—especially if you apply a value strategy and limit your picks to companies with very strong fundamentals. Thirty minutes per stock per week is plenty.

If you really don't have enough time, or enough interest, look into some of the major index funds.

If you want an extremely conservative place to put your money, stay away from typical mutual funds and put it in a money market fund.

And don't take stock tips from brokers; they're paid to push certain symbols. At the very most, add their recommendations to your "Look List". If they pass all of YOUR personal tests for a stock pick, add them to your "Watch List". When the price is right, add them to your portfolio.
 
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bqmassey said:
This thread is riddles with so much terrible advice.
Click to expand...

Ah, but if you knew Nick like we know Nick, then you'd know that we are all simply trying to ensure that he does not succeed in his ambitions- the notion of a Nick Brennan emboldened by wealth is too frightening to fathom! :hairraise:

(sound of rimshot)

But seriously folks.

I think a number of suggestions above are made by people who have
personal experiences upon which to draw, and I also believe that Nick is capable of collecting and assessing each element of advice, and applying it to his personal situation.

As for me, I have great appreciation for well-managed mutual funds, because I do not have the time or (after the end of my work day) the mental energy to devote to researching and administering a stock portfolio. I do remember when I was young and worked in a field which was reasonably rewarding, but which left me with a clear head at the end of the day, and I had time to do some serious research and, in concert with another friend who was blessed with some real talent in the financial wizarding ways, traded individual stocks with reasonable success.

The most important advice is, however you set aside the money, set it aside regularly, because before you know it, you're middle-aged and wondering: how in the hail am I gonna retire?

True story: about eight years ago, a kind yet stern friend/broker walked into my office at the law firm and told my partner and me that "You guys ought to have a retirement plan, and I suggest a "Simple"- we told her that was something we really should do, and she said, "Good!" and plopped down a pile of papers in front of us, and payroll deductions started immediately. We have since converted it to a 401(k), and we are one of the few firms of our size who offer a retirement plan with an employer contribution, which (bonus for us) helps us recruit and retain employees. Most important, of course, is that money diverted and invested (even invested indifferently) is much better than money simply spent.

Applied to Nick's situation, he is in the process of building a new business, and has a lot more sweat equity than cash capital to apply to it (my belief, I don't know Nick's actual cash position!). Is his time better spent in researching stocks to decide where to invest his (as of now, modest) stake, or should he focus his primary attentions on marketing, selling, performing and collecting for his professional services? My guess is, he can feed himself (and fund an investment account) through his business efforts, but is unlikely at this stage to have the free capital and resultant returns to live solely off of the returns from his investment portfolio.
 
bqmassey said:
...Mutual funds are TERRIBLE investments.
...
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Mutual funds with HIGH COSTS are terrible investments. By definition churning your individual stocks and paying transactions fees make for TERRIBLE investments. Low cost funds like Vanguard index funds keep your money growing in the market instead of putting it the manager's pockets.

The diversification of holdings in a mutual fund also minimizes the chance of risk.

Keep in mind that you cannot avoid making money in the stock market over a 20 year period.

Otherwise, figure how much your time is worth. You gonna spend 6 hours a week (an hour or two a day) reading reports? At only $5 an hour that's $30 a week while you're scrambling to find the stock broker that doesn't charge you $20 a month plus $9 a trade.
 
Thanks everyone for the advice.

I should have been more specific about what I'm looking for and why/how I'm going to do it. I believe very strongly that investing on a specific company is going to become very fruitful, very quickly, and as such, I want to invest in the company.

That said, I don't have a bunch of money to throw at this (as Spike properly surmised, I'm filled to the brim with sweat equity (which might be the best euphemism for being broke I've ever heard), but not a bunch of cash). But I believe in this strongly enough to try a few hundred dollars.

If I lose? Bah, its a few hundred dollars. I'm not going to go hungry because of it. If I'm right? I'll play short term (despite all the warnings, I know), and get the hell out, maybe invest in something long term, like a mutual fund or something.

What I'm trying to avoid is paying someone to do research for me (I have plenty of time right now), and being stuck in a service that requires a minimum deposit of a few thousand dollars. I found what I'm looking for in Scottrade and Charles Schwab, and since I got a reference to try Schwab, I'm focusing on Schwab for now.

Here's hoping! (Again, smart or not, this is just something I want to try).


Ooh, I should point out, I do have a retirement plan set up, a Roth IRA. Speaking of that, I need to roll my T-Mobile 401(k) into it!
 
1. Learn and apply 'stop loss' rules.

2. With 8-12 hours of research you can know more about any publicly traded stock than a broker.

3. Call your target and ask for copies of the 10k and 10q forms. Sound like a broker, and you can get them for free.

4. Commodities = safe(not oil), hi tech = risky.

5. Ignore all advice from brokers. Their job is to maximize trading volume(churn) not make you money.

6. Mutuals are high cost relative to invested amount. Even so called 'no load' funds have, well - costs.

7. Ignore all advice(including this) and go it your own way.

8. don't trade when you have a down day, let your stop loss work right.
 
Nick:

Sounds like you know what you want :)

When you're investing in a company because of a big idea, ask yourself if the the market is privy to the same idea. If so, it's probably already been factored into the current price level. If you DO know something that the market doesn't know (or doesn't have as much faith in), then you've got an edge.

The point is, the price of a stock isn't a reflection of how successful a company is. The price represents how successful investors THINK the company is.

Here's a great example with a stock I recently played in, Nvidia (NVDA) for anyone who interested enough to read the long post.

NVDA came out with news that one of their suppliers sold them some faulty chipsets and those chipsets made it to consumers. They came out far before their quarterly earnings report and TOLD EVERYONE that they were going to take a big chunk of revenue and stick it away to handle warranty issues, instead of drawing out this new expensive over the next year or two. They made it very clear that this would be reflected in the earnings report as a HUGE dip in profits from the previous quarters.

Everyone knew this, and the price plummetted. Something like... 31% in one day.

Ignorant investors took the opportunity to SHORT the company, driving the price down even further. The company was at a bargain trading where it was, but the price continued to drop. Well, I, and anyone else who realized how severly the market overreacted, took the opportunity to buy this great company at a wonderful price.

When the earning's report came out, they pretty much reiterated what we already new. The quarters profits were terrible, for a few reasons, but primarily because of the big chunk of change they took out of the revenue to deal with the faulty products. What happened to the price? Up it went! The stock fell into a short squeeze, where all of the short sellers realized their mistake and started filling their sells, driving the price up.

On the message board about this stock, the short sellers went crazy. Here is a quote:

"everything i expected comes true bad profit bad sales bad everything
i bought huge put option on this this cant be real#!^%#%&%* now i
hope to see real react for this stock price tomorrow ppl buying is
out of their minds"

They made a huge mistake. They bet on information that was ALREADY factored into the price. Not only factored in, but far too heavily. So when the news came out and the market smartened up, the price recovered.

So... the moral of the story is this...

Decide for yourself if what you see in a stock is already factored into the price.

I ended up selling the stock when it went up, waited for it to drop again, and bought even lower. I now own the same amount of stock I did the first time, but I have cash in the account from locking in profits (selling high).

Good luck with investing!

Oh... and remember that the smaller the amount you're investing, the more critical the commissions become. If you use a broker that's got a $10 commission, you're looking at $20 to complete the transaction ($10 to buy, $10 to sell). If you're investing $500, the cost of transaction is 4%. You're starting out at a 4% loss. Four percent is a lot... more than any savings account will earn in a year's time. People make a living off of 4% gains in stocks, but you'll only break even. You can do the math to see how different commissions will affect your return.

I'd definitely look into TradeKing ($4.95/no minimums/nice website) or Zecco (free trades if you meet the minimum, $4 or $5 otherwise).

I use TradeKing. It's my favorite of the low-cost brokerages. If you're interested in an account, I think there's a referral program that might give you and I free money, or there used to be.

Anyways, good luck! Feel free to post your stock picks here for discussion!
 
docmirror said:
1. Learn and apply 'stop loss' rules.

2. With 8-12 hours of research you can know more about any publicly traded stock than a broker.

3. Call your target and ask for copies of the 10k and 10q forms. Sound like a broker, and you can get them for free.

4. Commodities = safe(not oil), hi tech = risky.

5. Ignore all advice from brokers. Their job is to maximize trading volume(churn) not make you money.

6. Mutuals are high cost relative to invested amount. Even so called 'no load' funds have, well - costs.

7. Ignore all advice(including this) and go it your own way.

8. don't trade when you have a down day, let your stop loss work right.
Click to expand...

This is excellent advice.
 
You want the best advice? None of the people posting advice in this forum (I'm guessing) received the lion's share of their respective fortunes (be they thousandaires or millionaires) from investing in anything other than their own sweat equity for a number of years. That's a guess, but someone above can prove me wrong.

Latch that onto the excellent advice above - along with the general advice that there are a lot of unhappy millionaires in this world who would trade their lives for someone else's (like mine? :cheerswine:) in heartbeat - and the world will be at your feet.
 
Greg Bockelman said:
Since when are commodities safe?
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As one of my old customers said, they're always worth something. Eventually you take delivery of the rotten potatoes, and you arrange to sell the potato sacks. He literally did that. :P
 
My Advice: "Free Advice is worth every cent you paid for it...."

You all owe me $5.....(THIS is my retirement plan by the way....)

--Matt
 
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