Monday, February 25, 2008

Intro to Investing Part One

Mutual Funds - This is pooled money that professional money managers invest for you. You purchase shares of the mutual fund and these professional money mangers invest it for you as well as everyone else who is invested in the fund. Every fund has a different theory, growth, income, blend...you have to choose which is right for you at a particular stage in your life. (we'll get back to that) Not a bad way to get started investing, you can go to a T. Rowe Price or TIAA CREF and start buying mutual funds for as little as $50 a month...that's $12.50 a week...just stop eating out one day and put that into a mutual fund. Charles Schwab has it so that you can do it with as little as $100 a month, $25 a week.

DRIPS (Dividend Reinvestment Plan) - Again, its not a bad idea, not quite as diversified as a mutual fund, but if you get a good company that pays out a decent dividend and has growth potential, you could be sitting back, watching your money grow over time. You don't hear too much about these anymore because of all of the alternative possibilities and the fear of not being properly diversified. If you have a company you would be interested in doing this with go to the company home page and look for the investor relations section and there should be some information on how to start investing directly with them. If not, go to computershare.com and they have lists of companies DRIP programs they oversee.

Savings Account - Maybe you are not ready for the market, you want to research a bit more before you jump in, that's more than fair and can be a good idea. Open up a savings account (e-mail me about ING) and set up automatic withdrawal's from your checking account. This way you automatically are saving and you get a guaranteed return, not matter what the market does. Setting up automatic transfers is the best way to approach this, get serious, there is a better opportunity for your cash to make it to the savings account if you set it up automatic as opposed to you having to manually transferring it...doesn't seem like much, but you'd be surprised how much it helps setting it on auto pilot.

more to come.....

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