I just got hired and am working my way out of debt (owed to my parents). I'd like to invest some money to (1) pay my debt, and (2) plan for retirement. My company however doesn't have any 401K plans and I knw very little about mutual funds.

Any advice on where to invest would be very helpful, thanks.

7/24/2006 1:13:52 AM

Roth IRA which you will have several index funds for now until you build up your asset total

7/24/2006 1:16:02 AM

mutual funds, with a few exceptions, suck.

what interest are you paying on your debt?

7/24/2006 2:21:44 AM

^ There not doing well now, and other ways will produce more return for a dedicated investor.

However, this company has made me and my family some decent money since I was born.

http://www.roycefunds.com/funds/fundInfo.asp?FundCode=PMF

7/24/2006 4:00:15 AM

For the debt you owe your parents...you have to be in a taxable account. Open up a brokerage account with Scottrade and purchase a no-load mutual fund. If you don't want to try to beat the market, go VFINX, or something comparable. Otherwise, look for a manager that has a decent 10 year record and has been with the firm for more than 1 or 2 years.

For the growth of retirement assets...you probably have a fairly low tax bracket right now, so the Roth IRA (as previously suggested) is the best choice. For the funds in there, same thing, but you may can afford to get involved in better funds. Through a broker, you could access awesome funds like American or Davis, but if you go no-load (probably a great option) look at T. Rowe Price funds first.

7/24/2006 7:41:51 AM

my REIT mutual fund has picked up like 25% this year

7/24/2006 8:27:21 AM

Quote :

"Roth IRA"

7/24/2006 9:19:35 AM

yes, Roth IRA is a no-brainer, but:

1. That's only half the answer. That doesn't address what you put in it.
2. That does him no good whatsoever in terms of paying of the debt to his parents.



short of flipping real estate, cars, etc, you're gonna have a hard time investing to pay off a short term debt. compound interest takes time to work its magic.


and the reason i was hating on mutual funds isn't because the markets have been sucking for a few months. i'm buying stocks like it's cool--i just don't really like mutual funds, with the exception of index funds and some ETFs.

7/24/2006 3:27:32 PM

It depends if his parents are charging him interest or not and how long they are giving him to pay it off. I would choose an aggressive mutual fund. Something with 80%+ stocks.

[Edited on July 24, 2006 at 3:58 PM. Reason : ..]

7/24/2006 3:57:58 PM

hence my original question


but if you want a fund full of aggressive stocks, why not just buy a bunch of aggressive stocks, or an aggressive index fund?

7/24/2006 4:02:01 PM

bgmims had a pretty good suggestion. Definetly go roth-ira for the long-term stuff

As far as paying your parents, it really depends on how much you owe them, how much you make, and how long you are going to pay them back. If you want to pay them in a couple years, you may want to look into cds in addition to some no-load type stuff. Like I said, it really kind of depends on a lot of things.

[Edited on July 24, 2006 at 4:06 PM. Reason : sdaf]

7/24/2006 4:05:38 PM

Investing short-term to pay off a debt is tough. You should just sit down with the parents ask them when they want it paid by and then just automatically deduct a monthly amount of your salary to them via online banking for the length it takes to pay them.

7/24/2006 4:13:20 PM

Also another nice option to the ROTH-IRA is that if you have to you can pull out any contributions made to it as long as you don't exceed the interest or money made while in the account.

7/24/2006 4:17:55 PM

but don't do that.

7/24/2006 4:43:42 PM

you might consider an annuity, depending on your situation, and assuming you max out your roth

7/24/2006 4:47:17 PM

Quote :

"but if you want a fund full of aggressive stocks, why not just buy a bunch of aggressive stocks, or an aggressive index fund?"

Duke, are you kidding?

First, to be diversified in any real sense you need at least 10 stocks. To make it cost-effective to buy them, you need to buy large chunks. This guy probably isn't loaded. Even with $7 trades at Scottrade, that eats into your investment.

Second, you have to do your own research on stocks, and if you only own a few stocks as your whole portfolio, you need to watch them fairly closely. You need to read 8Ks and listen to shareholder conferences, etc. Outsourcing it to a mutual fund makes perfect sense.

7/24/2006 4:50:16 PM

agreed

7/24/2006 5:08:49 PM

^^my approach is to buy into one stock each month (or put more money into an existing one). i have a set amount that i put into my brokerage account every month.

then i leave a little extra for if a great opportunity arises, or if i want to dabble in some penny stock or something.

you don't have to start off instantly diversified.




instant diversification via fund is all well and good, but do it with an index fund or an ETF.

7/24/2006 6:02:32 PM

the two best articles i have seen in some time for new graduates... simple and straightforward...

Chairman's Corner: Advice for graduates (no, it’s not "plastics") <https://flagship4.vanguard.com/VGApp/hnw/VanguardViewsArticle?ArticleJSP=/freshness/News_and_Views/news_ALL_chaircorner2Q06_07132006_ALL.jsp>
The "Dilbert" guide to personal finance <http://www.vanguard.com/VGApp/hnw/VanguardViewsArticle?ArticleJSP=/freshness/News_and_Views/news_ALL_dilbert_07122006_ALL.jsp&SYND=RSS&Channel=AN>

In addition, I would rathre go with a mutual fund company like Vanguard as they have some of the lowest costs of any mutual fund company. If you can't make the minimum fund requirements, ING Direct, Emmigrant Direct, or any other high paying savings account is good... at least until you can afford something like Vanguard Prime Money Market Fund. This allows you to have access to your money instead of it being locked up in a CD... so long as you have self control that is...

7/24/2006 6:44:13 PM

oil oil oil

7/24/2006 9:17:09 PM

Actually price per barrel was down today, at least as of 2pm.

7/24/2006 11:16:32 PM