this post was submitted on 11 Aug 2023
23 points (100.0% liked)

Moving to: m/AskMbin!

23 readers
5 users here now

### We are moving! **Join us in our new journey as we take a new direction towards the future for this community at mbin, find our new community here and read this post to know more about why we are moving. Thank you and we hope to see you there!**

founded 1 year ago
 

you are viewing a single comment's thread
view the rest of the comments
[–] [email protected] 1 points 1 year ago (4 children)

why would you invest in stocks?

[–] [email protected] 5 points 1 year ago

While it doesn't necessarily need to be stocks, investing early will greatly reduce your financial burden later down the road if you want to save for retirement. Check out the cost of waiting:
https://www.primerica.com/public/high-cost-of-waiting.html

[–] [email protected] 5 points 1 year ago* (last edited 1 year ago)

Compound interest. Buy into a total market index fund that will get you more or less 7% on average a year. Let’s say you have a $100 extra per month (doesn’t actually matter whatever you can afford).

Sally from age 20-30 puts her $100 in every month. At the end she has about $16000. She stops adding anything, but keeps that money invested. By 65 she has $170k.

Jeff doesn’t start investing until he’s 30, but he’s consistent and does the same thing, $100 a month from 30-65. He ends up with about $165k.

What that means is Sally made more money than Jeff even though she did the same thing for 10 years that he did for 35. She just started earlier.

[–] [email protected] 4 points 1 year ago

Time in the market > timing in the market every time.

[–] [email protected] 2 points 1 year ago (1 children)

I think better advice would be "invest/save" in general. You could just throw money into a mutual fund, index fund, savings account, whatever. If you get a job with an employer matched 401k, max that out. I don't think you need to worry about trying to play the stock market by buying individual stocks. You'll end up spending way too much time doing it for minimal gains over an index fund, and a lot of the time you're just basically gambling on what companies you think are going to do well.

[–] [email protected] 1 points 1 year ago

I want to piggyback on this, if you are in your 20s now, or any age really, if you are willing to do online-only banking and have a good size monthly payday deposit some online banks like Discover and Ally will offer 4% APR savings accounts, that is unheard of at places like Bank of America that were only offering us 0.1% APR on savings accounts.

If and only if you are good with money and won't go crazy, buy everything with a decent APR rate credit card and pay it off at the end of the month. We buy gas and only gas with a credit builder card after screwing up in our 20s, it's helped tremendously and credit scores can affect everything you do from insurance rates to job offers.