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braisler · 03-02-2009, 05:05 PM

You can check on the regulations involved, but you are usually able to participate in a 401k/403b plan and still have an IRA... certainly you'd still be able to have a Roth IRA as those are after tax dollars. Depending on where you work your company might offer a 'match' for your 401k. That is, they will put in the same amount or a % of the amount for every dollar you contribute. If your employer has this, use it to the maximum allowed. It is like getting an immediate 100% return on your money, or better. In my case, I contribute 5% of my income to my 403b and my employer matches to 10%. Big impact obviously!

So, if you are starting with $100 a month... it isn't a lot, but it is a good start. Take a careful look at your budget and see if you can't scrape together even more just now. It might hurt now, but will pay off big in the long term with compounded interest on your investment return. Particularly right now as we are in an economic downturn. I'd venture a guess and say that for each $100 you put aside this year, it will be the equivalent of putting away $150 or $200 two years from now.

Anyway, if you are looking to start a brokerage account (investing on your own), you can set one up with any of the online companies pretty easily and also set up a monthly automatic contribution. I use Ameritrade, some friends that I know have been satisfied with Etrade. Trades cost $7-10 each. You probably want to wait until you get about $500 together for each stock purchase just to keep the cost of investing down. I mean, if you buy 5 shares of a $20 stock for $100, you just lost 10% to the transaction fee. As far as what stocks to purchase, I'll reserve any recommendations. There is a lot of information out there. I'd recommend you get some investing books from the library or peruse some quality investment websites. I started with the Motley Fool books, but you can read much of that same information online. That will provide you a good basis for what makes a good company to invest your money.

Another option to consider is ShareBuilder. I haven't used it myself, but the idea is that you can contribute a small amount each month and with low transaction fees buy into stocks or mutual funds automatically. This requires less day to day or month to month management on your part. If you know yourself well enough to know that you aren't going to want to be constantly on top of your investments, then this might be a good option for you.

Good luck to you! And congratulations on taking the first step on building your future wealth.

03-02-2009, 05:05 PM	#2 (permalink)
braisler Addict Location: Midway, KY	You can check on the regulations involved, but you are usually able to participate in a 401k/403b plan and still have an IRA... certainly you'd still be able to have a Roth IRA as those are after tax dollars. Depending on where you work your company might offer a 'match' for your 401k. That is, they will put in the same amount or a % of the amount for every dollar you contribute. If your employer has this, use it to the maximum allowed. It is like getting an immediate 100% return on your money, or better. In my case, I contribute 5% of my income to my 403b and my employer matches to 10%. Big impact obviously! So, if you are starting with $100 a month... it isn't a lot, but it is a good start. Take a careful look at your budget and see if you can't scrape together even more just now. It might hurt now, but will pay off big in the long term with compounded interest on your investment return. Particularly right now as we are in an economic downturn. I'd venture a guess and say that for each $100 you put aside this year, it will be the equivalent of putting away $150 or $200 two years from now. Anyway, if you are looking to start a brokerage account (investing on your own), you can set one up with any of the online companies pretty easily and also set up a monthly automatic contribution. I use Ameritrade, some friends that I know have been satisfied with Etrade. Trades cost $7-10 each. You probably want to wait until you get about $500 together for each stock purchase just to keep the cost of investing down. I mean, if you buy 5 shares of a $20 stock for $100, you just lost 10% to the transaction fee. As far as what stocks to purchase, I'll reserve any recommendations. There is a lot of information out there. I'd recommend you get some investing books from the library or peruse some quality investment websites. I started with the Motley Fool books, but you can read much of that same information online. That will provide you a good basis for what makes a good company to invest your money. Another option to consider is ShareBuilder. I haven't used it myself, but the idea is that you can contribute a small amount each month and with low transaction fees buy into stocks or mutual funds automatically. This requires less day to day or month to month management on your part. If you know yourself well enough to know that you aren't going to want to be constantly on top of your investments, then this might be a good option for you. Good luck to you! And congratulations on taking the first step on building your future wealth.