| Dear OP, you are asking the wrong question -- a person with 1 mil or even 100k has access to different investment vehicles than a person with 10k or 100 bucks to invest. TL;DR: save at least 10% of your gross earnings and earn compound interest with savings. Split your money between 4 ETFs like RSP, DIA, QQQQ, and VEU. 1. Get on a budget. Save 10% of what you earn or pay off your credit cards first by saving 15%. Read "The Richest Man in Babylon" 2. Mutual funds suck. One out of 10 years will be terrible and they only spend a few years on top. How can you get consistent returns? They have high fees. Instead invest in equity traded funds or ETFs. Read "The Big Secret for the Small Investor" by J. Greenblatt and "One up on Wall Street" by Peter Lynch.
Be a value investor not a trader! Plan to let your investments sit and grow for years.
If you want to buy individual stocks, pick for the list of "dividend aristocrats". These are safe bluechips and you can re-invest the dividends for a compounding effect! 3. The fees and limited investment choices make 401ks a bad deal, even with matching. A self directed Roth IRA will tax shelter your growth, but you have to invest with money you paid income tax on (unlike a 401k). 4. Bank account interest rates are a joke! For savings you get 00.05% CD 00.35% Over 500k in money market 00.3%
Inflation is around 3%! 5. For small investment amounts, a US Treasury savings bond is not bad. There is no charge to buy or sell them and you do not have to pay taxes until you cash them in. I Bonds pay the rate of inflation and possibly a bit more. There are some penalties if you cash these bonds in before 12 months pass. Be aware of things like how much it will cost to buy and sell an investment and when you will have to pay taxes on your earnings. For me it was very hard to save until I created separate accounts to keep my funds in. I have been value investing in stocks and my portfolio has earned 8 - 10 % growth plus 3% in dividends. The dividends get reinvested so my holdings grow like a savings account. Read "How to Invest $50-$5,000" by Nancy Dunnan |