Ok, so after 2 years of hard work I have just gotten debt-free besides my house note. I have no real savings to speak of (all went to paying off debt) and outside my company's 401K, no real investment/retirement plan. I currently make around 80K and I am still fairly young (32) and I am wanting some advice on "where to start". Should I go to an Edward Jones or some other investment firm? Should I just go get an IRA? I have no knowledge of the stock market so doing it on my own is out. I am basically starting from scratch....suggestions?
The first question is what are your end goals? Are you looking for a savings plan or are you looking for an income stream?
I guess I am more-or-less looking for a savings plan. I'm looking more toward retirement...you know, I'd like to have my money working for me and hopefully be comfortable when I am luckly enough to retire in 30-35 years.
http://www.fool.com/retirement/general/how-to-retire-in-style.aspx?source=ifltnvsnv0000001 try that article to start
Max out your 401k. The limit for 2011 is 16,500, so defer that amount into the plan. Assuming you max out, and given your compensation level, you will not be able to defer additional money into an IRA. If your plan allows after-tax (not Roth) deferrals, you may also take advantage of that and defer in excess of the IRC Sec. 402(g) limit of 16,500. Also, max out your health savings account (if your company offers one).
Your investment goals will drive the process. Saving for a house in two years? You will want a low risk investment like a bank CD. Saving for retirement in thirty years? You can take more risk since you have a longer time horizon. Given your current situation, you should consider creating a 6-9 month emergency fund. It is not sexy but it will give you a cushion if you should lose your job. Without it, you run the risk of missing your other financial goals (eg using your retirement savings to pay the rent if you lose your job).
If you go to any of these companies they will try to put you in a annuity or VUL policy. They want to make cash. Like others have said, max out 401K, then max out your Roth IRA. Use diversified ETF's and mutual funds to make out your portfolio.
Thanks for the advice everyone....it seems like maxing out the 401K is some sound advice so I will start there. Don't know much of anything about the IRA's so I will look into further. I decided to wait on meeting up with an Investment company like Edward Jones for now basied on your suggestions.
