FirstBatRgr

Hey everyone. Let me give you a little background on myself. I'm nineteen and enlisted in the Navy. Investing has always been an interest of mine but I've never done it, per se. Right now, I have a retirement fund set up through the DOD's Thrift Savings Plan. Some of you may know about it, others may not...www.tsp.gov is the link to it.

So I am well with my retirement plans, but I would like to 'toy' with some of my income. I've been doing some figures and I can't place where 1,000 dollars of my monthly income goes...(food, movies, clubs, etc).

I'd really like to take a good chunk of that and invest it..long-term, preferrably. Mutual funds are okay but I'd really like to get involved in trading individual stocks as well. Any advice on online brokers, like e-trade or others??

Advice in general on what to do with this money would be greatly appreciated...Thanks folks.

sahtt

You need to start by getting the money before you worry too much about what to do with it. See how much you actually save over the next 4-6 months. If you don't have the discipline to save the $, you won't even have 1/2 the discipline to invest it correctly.

Until then, read every book mentioned in the sticky. Jim Cramer and Peter Lynch are my personal favorites.

I say this because you need a couple grand before we can really help you.

FirstBatRgr

Thanks. Appreciate it.

chroot

I agree with sahtt. You should generally have 4-6 months of salary saved up (in a savings account, money market, etc.) for general financial safety. Anything beyond that can then be reasonably invested in "risky" vehicles like stocks.

If you absolutely must try to get into investing without having any significant capital, you can look into Dividend Reinvestment Programs (DRIPs). Many large company offers these, and you can basically just send in small monthly checks to steadily build up a position. They generally don't charge commissions, which is important if you're only investing a small amount each month.

If you decide to invest your money directly, promise me you'll look right past mutual funds. They almost all underperform the market. Your best bet for (relatively) low-risk, low-maintenance investment are the index funds that track the NASDAQ, S&P 500, etc.

- Warren

FirstBatRgr

Thats interesting because mutual funds are widely chosen by alot of people..never knew that.

chroot

Well, mutual funds used to be a wise choice for the invest-it-and-forget-it crowd... until electronically-traded funds (ETFs) were introduced that are pegged to the major indices (Dow, S&P 500, Nasdaq) and literally thousands of others. The ETF is the "new mutual fund," but they haven't yet become a household word.

These funds are managed by computer programs, not buildings full of people, so they have almost non-existent expenses. More than 80% of mutual funds underpeform even the common ETFs after you include the whopping fees they take out every year. The major index funds are good for a reliable 10-15% per year. If you're willing to take on more risk, you can buy ETFs that represent specific market segments, like emerging markets, the Chinese economy, etc. and can make much higher returns.

If you're only investing with small amounts of money per month, and don't want to use something like a DRIP, just keep a close eye on your commissions -- you don't want them to end up eating a significant part of your profit per share.

- Warren

magician

Not to put too fine a point on it, but ETF doesn't abbreviate electronically-traded fund; it abbreviates exchange-traded fund. Look here.

DryCycle

Consider setting up a Roth IRA fed by a savings allotment. You can get to your contributions (but not earnings) tax free if you need to sometime, and you don't have to think about tax planning when deciding when to buy and sell because earnings are tax-free (assuming that you don't want the money until you are old). Navy Fed might even be able to set the whole thing up for you.

ESCALVANTE

I would like to start a Roth IRA. Where can I get one started and how much is needed to start one?

amao20

Take a look at Zecco (limited number of online trades per month) or Scottrade ($7 per transaction). They are probably the cheapest discount brokers. I don't have any experience with Zecco's transaction speed, but Scottrade is pretty decent.

Also, read up at www.fool.com - Motley Fool offers alot of free investment advice for long-term investors. CAPS is also a good tool to screen stocks, as long as you take what the CAPS players say with a grain of salt before jumping in blindly.