My life

[steffiegirl]

A couple of you asked about my sponsorship deal with Allianz. Yes, I accepted it and am obligated to Allianz for 5 years after I graduate. Ron had a lawyer review the contract before I signed it and the lawyer said it was very fair, just like the type of thing students attending West Point or Annapolis sign committing themselves to the military

Comments

[knockmeakiss]

Congratulations, Steffie, I'm glad you took it. It sounds like it is working out very well, and you're making good choices with the money.

At your age you can afford to make some high-risk investments, because you're not counting on that money in the very near future, to retire, for example. In any case, a financial advisor is a great idea. At this rate you could own a house by the time your obligation is complete. :-)

[tuil]

two things only (but its better we talk about these things in person):

- im a geographer and im sorry to say, its rather likely a severe earthquake is hitting california within the next decade. if the state is lucky the epicentre is somewhere in the countryside, if unlucky ...

- consider twice or thrice before "investing into what your friend" says. dont forget those who invested into enron. the us (and its economy) is a hot spot. you can win much but also lose all. if you want some safe (european) bets - i can give you some.

Invest yourself ... you're smart enough not to need outside help

[greystroke]

Call Vanguard or Fidelity investments. My wife loves Fidelity. I like Vanguard. You can invest in No-Load (no cost to you) mutual funds and manage your own affairs. My favorite 'radio' investor guide, Bob Brinker (bobbrinker.com) says to diversify through broad based, indexed mutual funds which mirror the particular market segment (Standard and Poor's, SP500, etc

Re: Invest yourself ... you're smart enough not to need outside help

[steffiegirl]

I have already opened an IRA and funded it for both 2005 and 2006.
Ron and I have already discussed my opening moves and they will be fairly conservative. I am going to put something like 2/3 of what I invest into an S&P 500 tracking fund. They do well over long periods of time, have low maintenance fees and I am young so have plenty of time to let that magic work (I retire in 2052 if I work to 67. Ugh.) The rest is going into a money market account that pays 4.15% interest. It will leave me some cash to make a move if anything good comes along and also give a me a cushion should I need it for some emergency.
We are not talking big bucks here. I will open the account with a total of something like 17,000-20,000. It will get added to regularly though. Ron has given me some basics books and for the long hoaul, regular investing over time with a plan in mind seems to be the key.
Thanks for the input.

Re: Invest yourself ... you're smart enough not to need outside help

[greystroke]

I was listening to Bob Brinker on the way home from work Sunday and Terry Savage (another GOOD radio commentator on personal savings) said that since 1926 the average return on the total stock market is 10.4% per annum.

Girl ... you've got a great start to what Bob Brinker calls ... "the land of critical mass" ... i.e. that point where you can call your own shots without depending on a paycheck ...

Again I recommend Vanguard or Fidelity ... no fees ... low maintenance fees on index funds ...

Oh ... and a quick calculation shows that $17,000 at 10.4% ... one million nine hundred sixty three thousand ... at age 67 ...

And if you put it in a ROTH IRA you don't have tax consequences when bringing the money out ... so be sure to fully fund a ROTH IRA

Re: Invest yourself ... you're smart enough not to need outside help

[tuil]

Why do you invest in American stocks?

They were among the lamest last year. Even the German Stock Index performed much better. Not to mention those in Asia or Eastern Europe ...

As long you are still young take some risk (IMHO its not a risk to invest in Eastern Europe anymore), and when you made some money turn to conservative investments.