Learning and resources for saving and investing

[Second Summer]

I realize my knowledge about money, finances, saving and investing is somewhat lacking, and therefore I wish to learn more about this.

I went to a presentation at my workplace about saving, and I found it quite useful. However, I really need to learn more. The presentation covered the concept of a mutual fund and the idea of saving and investing in a way that attempted to avoid losing value to inflation.

What more can I learn that would be useful? And what web resources are good starting points for learning more?

 

[shyvas]

Working out a budget and a possible investment/saving plan starts when you get your salary. The questions that you should ask your self ; what are my goals, do I want my money to be safe ? Other important factors is not to get into debt and spend only on what you can afford.
I have always saved on all my utility bills and shopped around for the best deals whether it be electricity, bank, phone, food and home/car insurance etc. It's amazing how much money you can save on a monthly basis.

I also starting planning for retirement in my late 30's and my plan was to own property. I invested money into saving funds with interest rates varying from 7 - 9 %.
I have always learned that it's not wise to invest lump sums into one fund and to be able to have access to savings in the case of an emergency. One should have at least 6 months of salary in an accessible savings account just in case of an event like illness or losing a job.
Nowadays, interest rates have gone down and I only get around 2.5 - 2.9%. This suits me as I now own my own property and have savings for retirement.

Once you have worked out the amount of possible savings, see what kind of savings accounts are possible. The most important factor is to work on your goals. Sometimes, it's better to have several savings accounts which pay lower interest rates rather than risk larger sums that promise higher interest rates. I still think that the best investment is in buying your own property and to have no or little debt when possible.

Your accounts manager at your bank should also have the necessary knowledge to give you advise.

If your firm had a presentation about funds, it's because the company wanted to sell the employees their product.

I like Moneyxperts.com. This site has very useful information and tips on how to be savvy and make your money grow. Moreover, they also have a forum where people discuss investing and saving money.

So, firstly you need a plan.


Banking & Saving

 

[Hog]

I just noticed your question. I hope my advice helps you.

Lots of people believe that they can outsmart the stock market. Investment advisers and mutual funds will tell you how they can outsmart the stock market. They talk about market timing, staying ahead of the information curve, and all sorts of garbage. Too many investment advisers are less honest than a used car salesman.

Here is an example:

INVESTMENT ADVISER: I can help you get above market returns. I can guide your through the peaks and valleys of market trends.

ME: So how do I know that you are better than any other investment adviser?

INVESTMENT ADVISER: I get lots of recommendations from other investors.

ME: Do you have any quantitative data to support your claim?

INVESTMENT ADVISER: NO

ME: Do you have any evidence that your advice is more valuable than the commission that you earn from selling me this stuff?

INVESTMENT ADVISER: Mumbo jumbo garbage with a bunch of fancy words.

ME: I do not have a clue about what you were just saying.

INVESTMENT ADVISER: That is why I am here to help.

ME: I do not invest in anything that I do not understand. I do not understand you. Therefore, I will not do business with you. Thank you. Have a good day.

INVESTMENT ADVISER: Good luck with that.

======

The essence of the above conversation actually took place in real life. My employer was hanging on to some of my money and I had to go through this jerk to get it.

Here are my suggestions.

First, I would suggest that you visit Vanguard.com and read the homepage. The funds are set up to avoid the conflict of interest that I illustrated in the above conversation.

Second, think about your risk tolerance. If you need to know that your money will be absolutely safe, then buy bonds. If you feel like taking some risk, then buy stocks. I personally like to live a bit on the wild side. I invest 80% stocks and 20% bonds. The bonds exist to cover emergency expenses. I will probably go to 100% stock within a year because my risk tolerance is increasing.

Third, if you invest in stocks then you need to be ready for some wild swings in value of your investments. The coronavirus just decreased the value of my stocks by 30% over the last month. I have no idea if the stock market has hit bottom. I could loose lots more money. Still, I will probably recover these loses within 5 years. In a worst case situation, I might need 10 years to recover my losses.

Fourth, the upside potential of stocks in the long run (20-30 years) is very high. You should expect to quadruple your investment in less than 30 years. This is after inflation and after taxes.

I am primarily saving my money for the benefit of my autistic son after I die. So, I am a very long term investor.

I hope that helps. Please feel free to ask more questions.

 

[Urban Gardener]

My family always told me that I was not capable of understanding the stock market because of my gender.

I watched them take the normal route - working with investment professionals, buying mutual funds. I saw that it had mixed results and can with some obvious pitfalls.

I did my own research.

Years later, I had a job that came with company stock as a benefit. I was amazed by the way many of my co-workers seemed emotionally attached to their stock. Sure, they are giving you a percentage of the company, but it's in a very small percentage.

I saw it as a money tree - you watch it grow, bear fruit, struggle through storms and diseases. You strategically pick the right time to harvest.

So I harvested at the right time. The time when the stock's value was at its peak. It never regained that value. The company was sold.

I like to research my stock and purchase shares one by one. I also go by instinct to some extent.

You cannot outsmart the stock market. That's where the trap of ego causes many to fail. To succeed, you must keep your ego in check, and be realistic. Allow for mistakes to happen.

Investing is competitive and all other investors are your competition - the professionals who are there to "help" you, the people writing books and blogs about it. People won't give away their best strategies; their goal in helping other investors is to guide them to the middle ground and keep them there.

You need to do your own research. You need to think critically and independently.

Secondly, in terms of basic savings, your bank can help with financial
literacy and advising. They will try to sell you products, so be cautious about that. But they have financial advisors who can explain how stuff works.

In addition to that, some universities have free financial literacy resources for the public.

I would be a little wary of most of the financial literacy stuff you'll find online - they're biased in favor of their advertisers.

Look for resources that aren't influenced by advertising or other sources of funding that could be a conflict of interest.