I’m 28 years old and I’ve worked my ass off to be successful. I worked in a founrdry 10-12 hours a day 7 days a week to make enough money to put myself through school. That’s the ideal way to make a living in today’s society. Although I understand that there is other alternatives. I have the drive, intelligence, and the money to invest. I have 40k in the bank and am willing to invest 20k. My question is where do I start? I don’t want to go home looking like this everyday to be “successful.”
Wade Yandell: Working ~80hours a week, it Doesn’t sound like you will have a ton of time to research stocks and keep up with them. A well diversified, low cost index ETF or index mutual fund may be appropriate for you. It will give you diversification and won’t cost an arm and a leg. You can go in stages (10k now and 10k in 6 months, or 5k every quarter) to dollar cost average in if you like. Consistent additional investments will help.
Wade Yandell: Ps – I have a ton of respect for people who work their tail off and don’t rely on others or “the system”. Bravo sir.
Matt Nation: I quit that job for good reasons, and I’m going to school full time now. I’ll always have my school as a fall back. I’ll definitely look into a ETF or a mutual fund. Thank you
Dillon Rhodes: What are you going to school for?
Matt Nation: Manufacturing engineer, with a background of industrial maintenance.
Matt Nation: It really means a lot to me and my family.
Wade Yandell: If you have the time and inclination, further your “investing education” as well. There are several good books in the pinned post on this page to get you started.
Wade Yandell: This one is offered on PDF for free at the link below, and is almost unanimously recommended by members of this group. http://www.mhinvest.com/…/SBI_Single_Best_Investment…
Matt Nation: I will start studying, thank you Wade Yandell
Lisa Mo: 1. Open a retirement Roth IRA account at fidelity or vanguard. 2. deposit $5500 in a Roth IRA (you can deposit $5500 per year in a Roth IRA). 3. Buy stocks from solid companies. Here are some examples… apple, jnj, xom, ba, 3m, hd, intel, unh, PepsiCo, mcd, Disney, Facebook, amazon, Netflix, google. Fidelity has lots of tools and education so you can learn.
Della Rosa: Download the Robinhood app. The trades are fee-free and you can find nearly all ETFs to buy on it.
Dave Hayden: Personally I think Fidelity, Schwab, or Etrade are better for most folks.
Terry Row: You can trade for free on Robinhood, no commissions, no fees, get your feet wet, move up to a more sophisticated system if you feel it’s necessary after a couple of years.
Sören Janssens: Index investing will do it, 6,7% average return, Sam Smith always gives good advice, he knows his stuff?
Sam Smith: “Success comes in work clothes”….Matt, your off to a good start….28/$40k to your name ….put your photo above, your testimony, and these comments in a picture frame. Tuck it away and come back to it over time. You will have your first $1M by 48… $2M will come by 53, the 3rd mill by 57 and so on. KEYS:. Get the books for your library and keep reading. Get ‘The Millionnaire Next Door’, ‘Think & Grow Rich’, ‘ ‘The Richest Man in Babylon ‘win…build a prosperity consciousness…understand the ‘rule of 72’ regarding compound interest. If possible stay single…..
Jim Marrion: Sam Smith curious why would his money double by 53? I am living your example as I am 48 and just over $1M. But have been unemployed for almost a year and trying to come up with a game plan. I and sitting on 2 yrs of living expenses in liquid cash and have about $60k sitting in money market waiting to dip back into the market as I am pulling profits off the table. I would love to be close to double this in 5 yrs but never expect it. Thanks
Jeff Mittman: Your off to a great start, it’s not how much you make, it’s how much you save. Put the max of $5500 In VTSMX in a Roth IRA at Vanguard. Do this every year. A Roth IRA grows tax free forever. Split the remainder in a bond index and an international stock index at Vanguard. Keep adding to these so your dollar cost averaging over time. Don’t sell ever. Markets go up and down but overall always grow. They always have and always will.Focus on growth while your young, you have time on your side.
Chuck Parrish Jr: Start with looking at Dividend Aristocrats. They have a history of paying dividends. Also start with some big companies you’re probably familiar with. AT&T Apple Starbucks Pepsi Disney Nike Home Depot Johnson & Johnson Just to name a few
Chuck Parrish Jr: Sorry but there’s no way I’m buying a mutual fund or ETF that 1. Charges fees and 2. Yields 1-2%Not when I can buy stocks that yields 3% or REITs that yields 6% and are safe. 6% is crushing that ETF 1%
Milon Hoang: Kudos! Learn the basics of Investing 101 first. Follow Kiplinger/Money for investing tips. Safer to diversify in various mutual funds (<1% mgt fees) than individual stocks. Time is on your side so invest in high risk/high growth MFs. There are tons of investing tips on the internet, so arm yourself w/ financial knowledge wheelbase first.
Steve Haar: Matt congratulations on recognizing that in America working hard, saving your money and investing in your future is still the way to go. Too bad others of your generation are more takers and less givers. First I would not invest the whole $20k at one time because of high valuations in the market, unpredictability of our government’s policies and an unstable geopolitical picture. I would consider for you the following steps:1. Get educated. Read the Wall Street Journal, subscribe to investing type magazines like Investor’s Chronicle, Money, Smart Money, or Bloomberg Business Week, watch Jim Cramer nightly (do not buy his recomendations without doing your own research) and finally download free apps like The Street, Morning Star, Yahoo Finance and Stocks2. Using an on line broker to save fees like Fidelity, Vanguard, or TD Ameritrade, open two accounts; a ROTH IRA for retirement and a joint if married or individual trading account, by putting $1,000 into each unless there is a minimum required for the ROTH3. Ask what are your personal goals? Saving to buy a house? Saving for a child’s college education? I.e., how soon will you need the money in the non ROTH account? Generally you should not put money in the market that you will need for at least two years. 4. Do you need added income or do you just want growth or both? Your answer will determine what you will be buying as you income average into each account $1,000.00 per month5. This is 50% of all your money so I would NOT be buying individual stocks in your non retirement account. I would be considering 1/3 in each of small cap, mid cap, or large cap index funds which will give you exposure to different sectors, but without the risk of investing in one (technology for instance) that may very well be over bought. And keep going each and every month regardless of what is going on in the world. 6. WIn the ROTH account you can take more risk. You can consider Cramer’s portfolio for retirement or college which includes EW, NFLX, GOOG, AAPL, C, TSLA, CCL, NKE, ALGN, VE, BABA, HD. In other words companies that will continue to grow and even exist 37 years from now when you turn 657. If you are looking for income there are many choices from this group. My own choices are SNH and FCISX8. Finally don’t get so intense about investing that you feel you have to check the market every day. Be disciplined in your big picture plan, but mostly stay healthy and enjoy the life God gave youKeep in touch,
Matt Nation: Thank you very much. This is great information and very motivational.
Quentien Brewington: Good stuff! I used to do similar work. I can tell you from experience, you are making a turn for the better. The only thing I disagree with are Mutual Funds. They have their place but, I am fundamentally against actively managed investments. Particularly because when you account for all the fees even a good performing portfolio won’t outperform the market.
Milon Hoang: Not true. There are many MFs w/ low expense ratio comparable to Index ETFs. I’ve owned FBIOX for many yrs, averaging ~33% ROI (~18% YTD). With a 0.75% mgt fee, u can bet I’ll stick w/ this biotech MF long-term.
Quentien Brewington: Thanks for sharing your Intel
James Booth: Don’t buy now. It’s a cycle and long term investors should wait until we are in the bust phase of the business cycle. Watch ray dalios YouTube video ‘how the economic machine works’ He’s probably the best investor in the world and has done a highly understandable free video. He says stocks should return about 4% if you buy now so I would wait maybe 2-3 years for the Dow to be back at 13,000. When the next recession comes they won’t be able to cut interest rates enough to restart the economy. Buy the panic that is coming and earn 50-70%. Use etfs and hold for about 5 years after the crash.
Ikponmwosa Omoruyi: Matt Nation if you wanna quadruple your 20k in less than two months Shopify is your answer, search Chris Record on Facebook, he is having a free “90 day ecom challenge”(also the group name) training series everyday!
Steve Haar: Now THAT’s real bad advice Ikponmwosa. Quadruple your money in less than two months? Matt ignore any advice that promises quick money.
Denis Hache: If you want to gamble and probably lose your hard earned 20K, follow Ikponmwosa and his buddy. You may hit a home run but eventually it blows.
Angela Roe: ROTH IRA and index funds. By the time you retire your money will have grown exponentially
Seth William Banks: Www.seekingalpha.comSome awesome, mostly easily digestible articles in there, also has an app for the phone so you can read on there. That’s how I began my education.I’d say if you’re really busy and don’t have the time to do much research on a regular basis just go wit some high quality diversified ETFs. Schwab and TD Ameritrade both give you access to some excellent ETFs commission free, as do other well established online brokers.
Stock Market Insights | Seeking Alpha
seekingalpha.com
Mark Martin: Start with a low cost index fund (mutual funds are too expensive). Here are a few to think about: VTV, SWPPX, VFINX, IWB, etc., but do your own research. I would only put half of your total $ in at one initial purchase, then wait for pull backs in the markets, slowly adding to your position on those down days. As your money grows, you can consider siphoning some of your gains into individual stocks — companies whose product you may like, that have good fundamentals (MMM, HD, SBUX, FIZZ, etc). I also suggest you read one of Peter Lynch’s books (“One up on Wall Street” is my favorite). Good luck, and you’re doing the right thing!
Ajay Koranne: I was a beginner to investing once. Motley Fool, fool.com, helped me larn basics of investing, and compounding. Their podcasts have helped me understand topics more.
The Motley Fool
fool.com
Terry Row: The only trouble with the Motley Fool is that every article ends in a teaser to “buy this book” or “subscribe to this newsletter.”
Ajay Koranne: I have 3 subscriptions with them. I have been following them since 200r or 2005. There recommendations have worked for me. And the cost of subscriptions average equates equates to few beers for me. Lot better than paying 1 or 2 % of the portfolio.
David Iarocci: Remember how hard you worked to make that money when you invest it. Be smart.
Riku Pasonen: That is what hard work looks like.
Avi Tanny: Can’t this gentleman put investments under his children’s names ? Kudos to the working man!
Dillon Rhodes: Why?
Avi Tanny: To spread the taxes
Russ Tyler: I found this article to be inspiring. I hope it inspires you as well https://www.thebalance.com/the-mathematics-of-getting…
The Mathematics of Getting Rich by Investing in Stocks
thebalance.com
Jason Scott Snodgrass: Josh is a modern day genius. Members of this group would amplify their investing knowledge astronomically by studying his writings on investing. He has changed my mindset for the best. Thanks for sharing.
Courtney Chanel: Thank you! ?
Riku Pasonen: Also google ChooseFI and madfientist podcast if you need goals and tips for how to increase income and reduce costs(no need to have financial independence as goal the get benefits from the philosophy)
Dillon Rhodes: Definitely follow Mad Fientist. He’ll walk you through everything and has the math, not gut feelings, to prove it all.
Gerri Zajac Kleinberg: Look into the Bullish Bears group and website. They have great videos to learn from. That’s the best place to start. Learn as much as you can before investing!
Jared Sterk: $SPY
Regina Smith: Following
Kylie Joy VandenLangenberg: Congrats on getting where you are. I doubt, it’s impressive and you deserve a pat on the back!Now for investing… ? You are on the right track, just beware of terrible advice. Anyone who tells you to buy a single stock, ignore. DO NOT EVER touch DRYS or Bitcoin, period. Because you said you want to invest and not “trade”, you have a few things to do. First, max out your 401K. You get immediate returns in the form of a tax deduction and there is seriously no better return. Max in out every single year. Then open an IRA and max it out too. If you happen to have a year when your income or tax bracket are low (you take a few months off work for some reason etc) the open a Roth IRA and max it out as you will pay tax up front but not on the growth. Now, once you’ve don’t all that you can move on to a basic brokerage account. In ANY of the accounts listed above want to look for funds where you buy and then don’t sell for a very long time. Look for low cost index funds as mentioned by MMark Martinabove. Also consider funds focused on dividends like DVY and set the dividends up to automatically reinvest. If you can’t resist buying individual stocks (and you really should resist) only buy companies on the Dividend Aristocrats or Contenders lists as these are likely to be less risk which means you don’t need to be an expert to analyze them. Finally, don’t invest your full $20k or $40k at once. Enter the market with 10-15% of your capital at a time, 3 months apart unless we see a drastic pullback overall – if the market pulls back over 10% then double that quarters’ contribution. Finally, take advantage of free transactions. Many of the reputable brokers will give you 10-50 free trades for funding a new account, so take advantage of those while getting started. Many will also let you buy/sell their own internal funds for no transaction fee (if you have a Schwab fund, for example, look at Schwab’s dividend funds). Good luck! Shout with questions!!
Dillon Rhodes: Making money with bitcoin is all about timing. Timing when you buy it and when you sell it. No one can always time it correctly.
Aric Chabot: Turn your 20k into 100k with bitcoin.. I bet bitcoin goes to 10k within 5 years.
Long Dang: Jeff Peadro wrong group. Good bye
Matt Nation: Thank you so much, this is very helpful.
Les Wilson: I would read Warren Buffet’s latest annual newsletter and make my decision afterwards. I would pay close attention beginning on page 21 and what he has to say about managed funds. You can find it here. http://www.berkshirehathaway.com/letters/2016ltr.pdf
Dave Sieling: slow and steady – time will do the work for you – dont speculate“An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.” ― Benjamin Graham, The Intelligent Investor
Reginald Mitchell: Mimicking Dow 30 or sp 500 close as possible. Or get with a company like vanguard with great low cost etf and let them build ur wealth.
Mike Cahill: I’d highly recommend reading this book. It was recommended to me by members in this group and gave me a great handle on Dividend Growth Investing. To me, DGI makes all the sense in the world after reading this book. The most important part to me is choosing a style of investing that everything adds up to you in your head. You will be the final decision maker in the end, whatever approach you choose. Make sure that the approach to investing makes sense to you. Congrats on the hard work and savings you’ve built, time to get that savings to work for you.https://read.amazon.com/kp/embed?asin=B00SHVJ3T8…
Get Rich with Dividends: A Proven System for Earning Double-Digit…
read.amazon.com
Matt Nation: Will do, thank you!
Jon Kopp: Self directed Ira real estate
Eric Brooks: This is a very easy read and will help get you in the right mindset. https://www.amazon.com/…/ref=oh_aui_detailpage_o00_s00…
Brian Fey: If you don’t want to invest any time or energy to it. Just buy the $SPY or similar stock, and invest as much as you can, whenever you can, and in 20 years, you’ll be in great shape.
Brandon Nicholas: Be careful of bad advice. There’s lots floating around here. Find someone who has already achieved what you want to achieve. Read like crazy, mostly books, but also blogs and news sites like seeking alpha. Like anything, the best way to learn is by doing. Start doing it, but start small because you WILL make mistakes, so make small mistakes at first. Learn to use the fastgraphs web site. Start here, read every article, one at a time from the bottom up. http://theconservativeincomeinvestor.com/the-income…/
Seth William Banks: I LOVE LOVE LOVE FASTgraphs!
Toni Nikkanen: fastgraphs is probably awesome but never depend on a third party alone for financial info on a company. Cross check with the company annual reports etc. to be sure.
Steve Haar: Brad you are right about some bad advice from this group. Most are correct given Matt’s situation, but any that recommend risky moves need to be called out for what they are. I feel everyone in this group should be 1. Experienced investors and 2. Successful investors who incorporate intelligent conservative methods to achieve realistic goals.
Helen Sriubiskis: http://money.cnn.com/calculator/pf/millionaire/
Millionaire Calculator | CNNMoney
money.cnn.com
Stefan Sharpe: This is kind of neat, told me 15 years with a 5% return.
Helen Sriubiskis: It depends on how much you add. Also you can increase the return by a percent or two. Look up the average S&P 500 return over x years.
Jason Hall: Matt Nation the best advice I can give you is that you have to invest for the long-term and stick with it. I say this because the market is at or near all-time highs, and I have seen too many people decide to jump in at a market peak only to bail at the first sign of a market drop, and end up losing money. Make this a lifetime commitment to invest in great companies (or low-cost diversified index funds) and hold them for the long-term.
Justin Michael Bellear: Matt Nation proud of you for taking initiative!! Best of luck to you sir. I’m no pro whatsoever, but reading books on investing would probably be a great way to start.
Matt Nation: Thank you so much!
Justin Michael Bellear: No problem!
Tristan Lloyd: Start by reading things by successful investors that are not trying to sell you anything. I recommend Peter lynch, his book one up on Wall street is a good one. Its Also, a good idea to diversify in both investment types and taxability of them, start an IRA Roth or traditional depending on how much tax you deal with now.
Timmy Davies: IMO,start by thinking outside the box. Start thinking different if it comfortable your not changing to achieve your dreams only money make it possible again just my opinion
Timmy Davies: I recommend Bob proctor check YouTube out
Judge Hellfast: Firstly, begin by taking care of yourself. Eat Healthy, Excercise and stay away from Drink and Nicotine and invest time in your greatest asset, your children if you have any. You want to live long enough to enjoy the new gains you will be making in the future. Start out by getting an account set up so you can purchase stock and/or trade. Once you have done that, place some stocks on a watch list and study them. Read and ask questions. For your first go round, take $1,000 and spread it around in various stocks. I would suggest something with a dividend as your first play, but not necessarily depending upon the stock in interest. But, this will give you a little experience in buying and selling power and understanding how to limit purchase and sell prices as well as the ups and downs of the market. BE PATIENT! The stock market is a patient man’s game. Read and ask questions, but this first play will open a whole new door of understanding and you won’t get burned on your first go round in the stock market. Stay positive and you will quickly begin to understand how things work. Once you have mastered the $1,000 challenge, you can begin picking up pace with wiser choices and plays and a trading style you choose. If you choose to move to day trrading you can. The choice is yours. I wish you all the best and hope you become successful. You have a great start. Keep up the good work. 🙂
Coelho Zé: Stay with a low cost sp500 index from vanguard or fidelity… don’t invest in stocks until your account is much bigger..Like Dgro, hdv, VYM, vig, spy
Michael Cavaliere Jr: A Roth IRA.
LMichael Pachecol: Buy market leaders. Stay away from Junk. Only invest long term. Until you build up your account and knowledge you should invest in low cost index funds. Look at SPY and VOO and always do your own due diligence. Its a long term game – dont try to get rich overnight.
Eric Finck: Matt I would start out by putting $5500 into a Roth IRA for this year and then put the other $14500 in an account and start getting some Dividend Kings in your accounts.
Caleb Melton: My hats off to ya. I couldnt do that many hours for a long period of time . never seeing my wife and kids etc. Takes a hell of a man to do that even if your single.
Matt Nation: Thank you, it was extremely rough. It will make me stronger though.
Caleb Melton: Im struggling only 65 hours a week working a physical job then going to lowes afterward
Armand Medina: Lots of great advice here, I I will just say well done!
Ali Hd: Learn technicals and you will never work 7 days a week again..
Matt Nation: I was the Plc controls electrician. It was good money, but long hours and horrible conditions.
Howard Hardaway Jr.: Read this.
Mark Askes: Start with reading jlcollins or mr money mustache’s blogs.
Arne Magnus Lorentzen Ulland: I´d say one of the most important parts of our strategy is to be done with the trading path. Unfortunatly, it seems like humans for some reason have to try to time the market. The more experience you get, the more humble you become and you start to respect mr. Market. I´ve written about my story on my blog. My advice is just to neglect the short time strategy of stock investing ASAP http://www.stockles.com/2016/12/31/my-story/
My story and starting at the wrong end of the cycle
stockles.com
John O’Reilly: Check out my Dividend Portfolio Update: May 2017 http://liveoffdividends.com/dividend-portfolio-update…/
Dividend Portfolio Update: May 2017
liveoffdividends.com
Nicholas Czewicz: Mind Over Markets is the Futures Traders go-to…
Millicent Ivy: Here’s the class I took to get started. It’s made for beginners and you’ll be able to choose quality companies as an informed investor once finished. I would start with a Roth IRA then move on to taxable accounts. http://bottomupwealth.com/zero-to-investor-open?orid=4442…
Gary Denson: Start by investing the maximum in a Roth IRA using dividend growth stocks. Then build your own portfolio of dividend stocks and some good growth stocks as well. Don’t worry that your portfolio is a taxable entity as the growth will outweigh the taxes you pay on dividends and capital gains. just don’t trade too often or sell off some losers in December to cut your tax liability. Be patient it is easy to get rich in Murica !
John Mercedes: I will buy best in breed only Jpm, BMY, V,MA and what is in vogue Technology( pypl,sq) .Oh and be patient looking at weekly and daily charts stay away from biotechnology those stock implode too risky.
Yvanne Gagnon: There’s a lot of great advice and knowledge in this group. I would follow the posts and learn that way, read the good books that were recommended on this post. I’ve been investing in the stock market for 30 years now both passively and actively and i know how confusing it can be with all the various approaches and everyone having their own opinion of what’s better. Open up a paper account and pick stocks that you like, then follow them to see how it works out. Low cost index funds are a good way to start because it lets you experience how the market fluctuates when you least expect it. I would add that although i’ve had money in the market from an early age, it is only in recent years that i began to study it and understand it. I wish i had started much sooner.
Robert Freeman: being a working man is nothing to be ashamed of. thank you for contributing to society positively instead of bitching about life. keep your head up and stay strong. not going to comment on what I am sure are good suggestions above. just want to acknowledge a guy who is trying and doing it right. doesnt happen enough
Matt Nation: Thank you for your inspiration. It means a lot.
Carrie Carrier: Following
Leon Brown: Matt: Awesome ! Self made men are rare these days, you are already a success . Ok, you will get a lot of very sage advice on this page. I would offer this, first things first. You are young enough to invest 20K and let it take care of your retirement, time is on your side big time. I would look at a Vanguard Target retirement fund. For instance if you want to retire at 60, you could choose the Vanguard Target 2050 mutual fund. The fund will balance itself between stocks and bonds as the years go by, going from aggressive to conservative. It is a set and forget fund, it should be your core holding, your ace in the hole for retirement. I bought $40,000 of the Vanguard 2030 fund in 2009 and I now have $84,000. Right now the mix is 75% stocks and 25% bonds. The stock portion will decrease with time and the bond portion will increase. There probably are some funds that have done better, but Vanguard has rock bottom fees and they balance the fund every year automatically. You are young enough to withstand a few market downturns and will come out just fine. The Target funds actually invest in other Vanguard funds and the amount of each they hold is what they balance. Best of luck to you !
Joni Lovell Sharp: VIG – low fees and companies that raise their dividend every year.
Cameron Mandli: Listen / read Cash flow quadrant. May give you some perspective as to where you want to invest.
Will Koen: From my knowledge of investing the first question is how much research on investing do you want to do?
Courtney Nicole: Invest in what you know. https://theivyinvestor.com/…/three-steps-to-picking…/
Three steps to picking your first stock
theivyinvestor.com
Johnny Hurt: VTSAX Vanguard index fund. Watch this video in full: https://youtu.be/oNWsopd8TkU
How We Invest in the Stock Market
youtube.com
Johnny Hurt: I feel what you are saying about working your ass off. Former oil field worker here. 20k is a lot of money. You owe it to yourself to do the research. The common sense book mentioned earlier is a good one to read. I am telling you though the smartest t…See more
Johnny Hurt: Also listen to this podcast that talks about index fund investing. It is very easy to do. https://youtu.be/Y9nhTRYleKU
JL Collins – The Simple Path to Wealth
youtube.com
Daniel Elijah: open a fidelity cash management / brokerage account for free, start studying.
Yvanne Gagnon: Solid advice from The Intelligent Investor (this book is considered by many the bible of value investing), written by Benjamin Graham who was Warren Buffett’s early mentor. Quoted passages from the 2006 revised edition with commentary by Jason Zweig. • To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks. p. 524 • A low-cost index fund is the best tool ever created for low-maintenance stock investing – and any effort to improve on it takes more work (and incurs more risk and higher costs) than a truly defensive investor can justify. Researching and selecting your own stocks is not necessary; for most people, it is not even advisable. p.367 • The vast majority of people who try to pick stocks learn that they are not as good at it as they thought; the luckiest ones discover this early on, while the less fortunate take years to learn it. A small percentage of investors can excel at picking their own stock. Everyone else would be better off getting help, ideally through an index fund. p. 396 • If you are not willing to go to the minimal effort of reading the proxy and making basic comparisons of financial health across five years worth of annual reports, then you are too defensive to be buying individual stocks at all. p.375 • Graham advised investors to practice first, just as even the greatest athletes and musicians practice and rehearse before every actual performance. He suggested starting off by spending a year tracking and picking stocks (but not with real money). p.396 • Simply by keeping your holdings permanently diversified, and refusing to fling money at Mr. Market’s latest, craziest fashions, you can ensure that the consequences of your mistakes will never be catastrophic. p. 531 • As Graham put it: In 44 years of Wall Street experience and study, I have never seen dependable calculations made about common stock values, or related investment policies, that went beyond simple arithmetic or the most elementary algebra. Whenever calculus is brought in, or higher algebra, you could take it as a warning signal that the operator was trying to substitute theory for experience. p. 282 • It is far from certain that the typical investor should regularly hold off buying until low market levels appear, because this may involve a long wait, very likely the loss of income, and the possible missing of investment opportunities. On the whole it may be better for the investor to do his stock buying whenever he has money to put in stocks, except when the general market level is much higher that can be justified by well-established standards of value. p.206 • Before you invest, you must ensure that you have realistically assessed your probability of being right and how you will react to the consequences of being wrong. p. 529 • As he does throughout the book, Graham is distinguishing speculation- or buying on the hope that a stock’s price will keep going up- from investing, or buying on the basis of what the underlying business is worth. p. 522 • Successful investing is about managing risk, not avoiding it. At first glance, when you realize that Graham put 25% of his fund into a single stock, you might think he was gambling rashly with his investor’s money. But then, when you discover that Graham had painstakingly established that he could liquidate GEICO for at least what he paid for it, it becomes clear that Graham was taking very little financial risk. But he needed enormous courage to take the psychological risk of such a big bet on so unknown a stock. … At heart, uncertainty and investing are synonyms. In the real world, no one has ever been given the ability to see that any particular time is the best to buy stocks. Without a saving faith in the future, no one would ever invest at all. To be an investor, you must believe in a better tomorrow. p. 535 • But behind the luck, or the crucial decision, there must usually exist a background of preparation and disciplined capacity. One needs to be sufficiently established and recognized so that these opportunities will knock at his particular door. One must have the means, the judgement, and the courage to take advantage of them. p.533 • No matter which techniques they use in picking stocks, successful investing professionals have two things in common: First, they are disciplined and consistent, refusing to change their approach even when it is unfashionable. Second, they think a great deal about what they do and how they do it, but they pay little attention to what the market is doing. p. 402
Helen Sriubiskis: Really good passages, Yvanne Gagnon
Yvanne Gagnon: Thank you Helen, there are so many more, it would make a book in itself if i quoted everything that i like!
Timmy Davies: That is a good post. Thx Yvanne Gagnon
Yvanne Gagnon: If it helps, i’m happy
Jason Waite: You got this man… I would invest in education 1st. Maybe your already doing that. Rich Dad has a great education series w/Robert Kiyosaki. You might have to do audio books since you work alot, and don’t have much time.
Cameron Mandli: That’s what I do. Listening on way to work & back. Mr Kiyosaki is a very smart man.
Timmy Davies: Changing One’s mind set ,
Yvanne Gagnon: It seems to me that you already have a success mindset. You already have done very well with your hard work and savings habit. There’s a progression to investing just like in anything else (not too many people go straight to grade 7 without having done grades 1 to 6). Think twice about giving your money to educational resources/programs. This is because once we get on that path, it can easily lead to more “education investing” and before you know it you could part with all your money because the rabbit hole keeps getting deeper. For beginners who want to invest in the stock market, I recommend The Little Book of Common Sense Investing (to start) already mentioned in a previous comment. This is an investment worth making, less than $30. It is short and easy to read, making the case for investing in a broad-market low-cost index fund. This is the most sensible solution for a beginner who doesn’t have the time or the inclination to dedicate hours upon hours of individual study and/or the willingness to risk their own money experimenting in the market to assimilate the lessons and become a competent stock picker. The Intelligent Investor (about value investing) is more intense, complex and lengthy. One Up on Wall Street is another good one to read.Of course reading is not enough. One must eventually get the actual experience of doing the investing. There are a zillion different methods, strategies and opinions in investing. Some gurus don’t like index investing because there are strategies that produce higher returns (with higher risk) and therefore they promote more complex forms of investing (such as real estate, trading or business). But a person must start somewhere. Starting simple is a good idea. It also depends on a person’s life priorities, circumstances, personality and risk preferences, available financial resources, interests. The path will vary over time and it will be different for different persons.Be careful of education sales agents and advertisers. Index investing is an excellent first step. Your money will grow without effort from you (on the condition that the market doesn’t crash right when you put your money in it – no one can predict the exact moment when that will happen) and you can develop your understanding and skill to do more complicated investing over time. I can say much more because I probably made every possible mistake in my 30 years of investing. It worked out pretty well despite all the mistakes because it turns out investing is a lot about common sense, and mistakes are an inevitable part of life and a necessary part of the learning process. The quoted passages from The Intelligent Investor (in my previous comment) is a good overview of what it’s all about.
Johnny Hurt: This is excellent advice. I would add that even if the market crashes… Don’t bail out, keep investing. That is one of the secrets to getting and staying comfortably wealthy.
Yvanne Gagnon: agreed
Riku Pasonen: Great post. Like a summary of investing book 🙂 Right mindset is key. When you are investing, you are like building a great machine that prints money. It will take time and effort. And it will spit the oil to your face time to time. But it runs great most of the time and make you smile.
Lisa Mo: Great advice! Especially the one about not spending money on educational programs. I would add that you can borrow that book for free at the library so you can check it out
Yvanne Gagnon: Yes, getting books at the library is great!