Popular Posts

Showing posts with label index funds. Show all posts
Showing posts with label index funds. Show all posts

Saturday, March 14, 2020

Investing 101

Before investing in stocks, do the following (in order):

  1. Pay off any credit card debt.
  2. Put six months’ expenses in a money market account.(or savings. Don’t have this cash sitting in a savings account that gives less than 1% interest rate)
  3. Invest 10% of your income in 401k/pension.
    • Allocate as follows:
      • the sooner you need to cash out your investments, the more conservative your portfolio should be - the longer you have till you need to cash out, the more aggressive your portfolio should be
  4. Setup Will/Life Insurance if you have a family to support.
  5. Open IRA/Brokerage(stock account). I suggest going with Vanguard or Fidelity. Differences in IRA/Brokerage account here:
  6. For Stocks, I suggest investing the majority in Index funds (VFINX, VOO). Index funds generally have great returns and aren’t as risky. They are a great investment.
  7. After investing in index funds:
    • Invest in dividend yielding stocks(AAPL,MSFT,etc.). These stocks pay shareholders dividends regularly. (I suggest reinvesting the dividends).

Books I suggest: