I've always been good at saving money, but what to do to make it make me money?

[nsl]

I've got a good saving going, and I've always put as much of my check each week into my saving as I could.
I haven't made a withdraw in about 8 years.
Anyway, my money is just in the bank drawing next to nothing.
I've never been much into investing, so any advice?

 

[arjay]

It boils down to really learning how a given investment works and how much,or little risk, you can live with.Look around you and see who has done well.What is it that they are doing?
If you have a spousal unit,that will play into it too.

 

[LoboGunLeather]

Interview several financial planners, aka: investment advisors. Discuss your needs, goals, and degree of risk you are comfortable with. Look at all of the possibilities (growth stock mutual funds, balanced funds, municipal bonds, government securities, tax-deferred investment accounts, etc). Ask for references, other people who have been dealing with these folks for a number of years.

Shouldn't take too long to find one that knows how to listen, understands the importance of meeting your needs long-term rather than just picking up a quick commission.

I've been with the same guy for 19 years. He has not only done an excellent job for me, he has also become a friend.

We generally keep enough in fairly accessible accounts to deal with any emergencies and handle a year or two of regular expenses if that becomes necessary. The rest is spread out in multiple different accounts of different types, much of it in tax-deferred retirement investments.

Depending on your age you might want to consider a Roth IRA account, which can be funded via many different types of investment accounts. Earnings grow on a tax-deferred basis, then proceeds are generally tax free at retirement age. Just removing the tax burden allows investments to grow much more effectively, and not having to pay income taxes on your retirement distributions makes them worth much, much more down the road.

 

[Maddog 521]

Get a very good investment adviser. Listen to what he/she says. Then do as much "research" as you can on retirement investing and the adviser's you talked to. Then go back to the adviser that you trust and talk again. Set up a plan and get going.
You didn't mention retirement, so if that is not in your plan this will work either way. Good luck and keep saving.

 

[ladyT]

I would put a years expenses away for emergencies. After that I would look at my debt levels. If you have a high interest credit card then pay it off. Look at your debt levels after that.

Next question is to determine how much risk you are willing to take on. Another is do you have a spouse and kids. If you have kids then you have to think about their future education expenses.

Good land with water sources would be a great investment.

It all really depends on what on whether you have family to take care of and your risk tolerance.

 

[Salty RI]

I take it, your not married.

 

[doublesharp]

I'm a long time investor but i hesitate to recommend a novice to start now, considering the mkt is near an all time high. Cash in a savings account is losing buying power every day due to inflation so a hedge is advisable.

If you aren't loaded with precious metals I think silver is a buy right now but i wouldn't want over 10% of my portfolio in it. I'd buy junk US coin silver in halves, quarters and dimes. I like gold too but think silver is the better buy based on gold to silver traditional ratios.
http://www.rapidtrends.com/silver-to-gold-ratio/

Rental property is a hedge but that's hands on work to be successful. Good guns have been an effective hedge as have .22lr ammo.

I'm fully invested in the stock mkt and since I don't sell I suppose that means I'm a buyer. My favorite companies are Eli Lilly, Ford, Walgreens, S&W, GW Pharmaceutical, Stockyards Bank of Kentucky, Park National of Ohio, Yum Brands, Papa John's, Con Agra, Vectren Energy, McDonalds, Kroger and a few more. I don't like mutual funds but an index fund is fine if you don't have time or inclination to do your own homework. I have the time and enjoy the risk/reward aspect of investing.

If you are young, time is your friend. if you're old, well, good luck because you're getting a late start on compounding.

Never too late to read and study Benjaman Graham's books, especially The Intelligent Investor.

The Graham Investor ? Intelligent Value Investing

 

[16thVACav]

- Keep saving. Every time you get a raise, increase the percentage you are saving. If your employer offers a savings plan, 401k, etc. in which some of your savings are matched, put your money there.

- Keep 6 to 12 months of living expenses in an easy to access account, such as your bank savings account. For funds in excess of that amount, set up an account with one of the major financial companies such as Fidelity or Vanguard. They offer various stock and bond funds of their own, as well as funds of other companies. Many funds are "no load", which means that there are no upfront sales charges.

- Stock funds carry more risk, but the returns are higher. Bond funds carry less risk, and the returns are lower. The allocation percentage of each should correspond to your particular financial situation and your ability to sleep well at night with your appetite for risk. When I was working, I was 100% in stock funds. Now that I'm retired, I'm 50% stock funds and 50% bond funds.

- There are managed funds, where the managers select the stocks/bonds they buy and sell. Then there are index funds, where the stocks/bonds approximate the average for an index such as the S&P 500. Index funds tend to have lower costs. Over the long haul, index funds usually have higher returns than most managed funds.

- The larger financial companies have lots of information online for new investors about how to start investing. You'll have to live with the consequences of your decisions, so start learning now, and take any advice you get from a stranger on the internet with a grain of salt.

 

[loutent]

As others have said, it all comes down to your risk tolerance and how you would feel about losing (at least on paper) part of your savings. These days, with the bond buying of the Fed, interest rates are so low that the only place to earn a decent rate of return is in stocks. You can mitigate your risk there by investing in Exchange Traded Funds (ETF's) like some low volatility ones by Vanguard - like BND or VTI with yields around ~2%.

Disclaimer: In the late 80's I bought some Apple around $40/share and sold it around $20 a few years later

 

[feralmerril]

A bank account has been the worst place to keep money for a long time now. They dont even pay interest. There is a bibical story. The goodman of the house was going on a extended trip. He gave a amount of money to each servant to invest for him. When he came home and called them together to see how they did the first servant doubled the money and he blessed him. He went down the list with various results and blessed them all. The last servant didnt invest any of the money and hid it in fear he might make a bad investment and lose all the money. The goodman rebuked the servant, took his money and gave it to the others. You have to invest in something. To leave it sit at no or next to no intrest is bad. Dont gambel and invest it all on one bet. You hedge and bet it in pieces of other tools.
But what do I know? I am not well off for many reasons. Yet I never stiffed anyone nor do I owe anyone. I always was a gambler and while I made some bad investments a few made up for it and gave me maybe 20 X`s my money back on those investments. Now that I am retired I dont jump around as much as I did working. Years ago I had a financial woman adviser with morgan stanley. She was extremely aggressive. She made me some very good calls within my 401K and a couple ira`s. She retired and her daughter took over. She is a lot more conservative than her mom was. That works good too as now at my age I cant afford to lose.
When I hired in on my job there was another guy who hired in right after me. Our company gave us what they called a basic benifit plan. It was some token amount like a couple hundred dollars a year that we had the choice of putting in a bond fund or some generic stock fund that held various stocks. Also you could go 50/50. My friends wife wanted to be conservative and had him play it safe. He chose bonds. I gambled it on the stock fund. Not long before I retired 35 yeas later we compared the amounts we had in the plan and he said mine was far more than he had and wished he hadnt listened to his wife to play it safe with bonds.

 

[feralmerril]

Two more things. Lobo is right about a roth IRA. I never had one as I was too far downstream when they came out with em. That silver thing? I got into silver just before the hunt bust around 1984. I lost something like $14,000s at the most critical time of my life. Newly married the first time with a kid etc. I had started out, made a little, got greedy and bought more on margin. Never again! If its such a darn good investment why are they trying to sell theirs to you?

 

[pharmer]

Wait for the next stock market crash and load up. In '09 I bought GE for $7/sh and Pfizer for $11.50. Sold them both in '11 for around $20. I know I sold too early but I figured printing money out of thin air and buying treasury bonds would be a finite solution. Which it is, just not as soon as I figured. Joe

 

[doublesharp]

FM, it's all about timing. The investments you made 20X on, someone had to sell you theirs. Anything you buy comes from someone who wants to sell. I'd rather have silver at $20 an oz than money in a savings account at 0%. The main thing is to diversify and not have your eggs all in one basket. I don't trust the government to keep their hands off IRAs.

 

[diamonback68]

Whoever you get as a financial adviser ask them about Institutionals. They aren't risky and don't pay supper-duper amounts, but they are steady and pay nice yearly returns. Ours gives us about $14-15K a year and never touches the principal which is enough to supplement our two Social Security checks and allow us to live comfortably which is all we want.

 

[feralmerril]

If I was to live my life over I would buy a old chicken farm or similar that had a bunch of buildings or sheds. I would have bought old classic cars, pickups, harleys and indians at the bottom of the market and hide them in the buildings. Later you would sell them slowly as you need the money with no tax factor at about 100 Xs what you paid for them! Hey! I seen mint 40 ford coupes go for $200s that would bring over $20,000s now! Same ratio for old indians and harleys. Guns too. You can drive, fondle and shoot them while you wait to cash in.
One gift I always had through the years that I never used: Since a boy up, every car, motorcycle and gun that I liked seemed to become the most sought after of their gender through the years. I did have a few of all slip through my hands.

 

[THE PILGRIM]

If I was to live my life over I would buy a old chicken farm or similar that had a bunch of buildings or sheds. I would have bought old classic cars, pickups, harleys and indians at the bottom of the market and hide them in the buildings. Later you would sell them slowly as you need the money with no tax factor at about 100 Xs what you paid for them! Hey! I seen mint 40 ford coupes go for $200s that would bring over $20,000s now! Same ratio for old indians and harleys. Guns too. You can drive, fondle and shoot them while you wait to cash in.
One gift I always had through the years that I never used: Since a boy up, every car, motorcycle and gun that I liked seemed to become the most sought after of their gender through the years. I did have a few of all slip through my hands.

Hold on here guys! I was raised in a place like that. I spent all of my early life planning, plotting and conniving to get away.
I would like to have my Shelby GT-350 back.
And maybe just one of those 1940 Fords. A convertible would be really nice!
Met a guy up in Ohio who had a warehouse full of Cadillacs.
He bought a new one every year, his wife got last year model.
Then her 'old' car was put into the warehouse.

 

[johngalt]

Beware of the fees, they can eat up all your return. Financial advisers and mutual funds both charge fees. If you pay an adviser to buy mutual funds, you are paying fees twice.

Mutual funds are required to publish their holdings. If I find a fund that interests me, I use this as a source for ideas of companies to research.

My investing preference is to find solid companies in industries I consider to be stable, with little debt, who are down due to temporary issues (value investing). I then sit on it long term, I'm less concerned with short term performance.

There are a few industries I simply won't invest in. Retailers are the big one. Their profits are razor thin, their customers for the most part don't think the business is entitled to make a profit. The instant someone cheaper comes along and undercuts them, they are done.

Researching individual companies takes work. Barons is a weekly newspaper that is pretty good.

There are a lot of complicated financial products out there, most of which I don't understand. I don't buy if I don't understand it.

Investing is risky. Sometimes you win, sometimes you lose. When a stock tanks, does that make it a good buy, or is it a sinking ship? When it goes up, do you take your profit or ride it out? There are no guarantees.

 

[LostintheOzone]

My wife has a financial adviser, I do my own investing. We were married in our mid fifties so decided to just keep out own investments separate. So far she's been doing better than I do but not by much. I would say hire an individual that comes recommended by someone you know who has experience working with a pro. Way too much to know for the average investor.

 

[jkmo]

Find a good investment guy you trust. Really check them out. Ally bank (an online bank) pays the best interest on a savings account. My investment guy told me about them. HUGE difference from my Regions account

 

[arjay]

I did well with the houses I bought (the divorce destroyed that)Ok in the stock market,bought bp oil when it tanked and bac between $6.50 and $8.00.I didn't carry disability ins (Dumb!) and didn't plan on a divorce.Those two were huge.Lifes a crapshoot.