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Money Matters - cellophane
the story of an invisible girl
Money Matters
I've been wondering recently about investments. I'm not very good at investing and accounting and such. I'm good at making money and saving it -- fortunately these are the most important steps -- but what I do with it after that is fairly haphazard.

No it's not under my mattress, don't worry! I have a few savings and retirement accounts and investments with a discount brokerage, but I suspect my money isn't working for me as hard as it could. (I've told it "go forth and multiply", but I'm curious about ways to be more firm.) I'm not focused enough I think. I go through phases where I pay careful attention, research stocks and funds, get everything allocated properly, then I'll hit long phases where I don't think about it much or at all.

I've contemplated turning my savings over to an accountant or somebody who would keep a closer eye on them, but I'm not sure if the fees are worth the return. Also I'm not sure how to go about finding a good person/company for the job. I'm curious about what other people do.

So... what do you do with your money? Not the money you spend, but the money which you save when you're lucky enough to be able to.... how do you make it grow? Do you use an accountant, and if so how did you pick one? What do they do for you?

Do you do your own investing? If so, do you use funds, stocks, cds, or other things? How much time do you spend monitoring and reallocating?

Feel free to answer as little or as much as possible. It's funny, because money can be such a sensitive matter: I feel weird and guilty for even bringing it up! But perhaps I'll end up with some helpful advice, or at least some new ways of looking at things. Heck, maybe other similarly clueless people can find ideas as well!
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dagibbs From: dagibbs Date: August 31st, 2007 01:50 am (UTC) (Link)
I don't even have the periodic good bits that you have.
rmeidaking From: rmeidaking Date: August 31st, 2007 02:43 am (UTC) (Link)
I dont really want to go into details on our personal investments, but for our purposes, an account with a discount brokerage such as T Rowe Price or Fidelity has worked out fine. We have most of the money invested in no-load mutual funds, because I determined that they out-performed my choices in stocks. I have had a couple of courses in savings and planning, which puts me a long way above most people, but a long way below a professional investment counselor.

I am not willing to put the time and energy into investing that some others I know (such as stormlord). I want to make some choices and let the accounts do their thing. Yeah, I am lazy; someday I want to be retired and lazy!

If you can come to VS on Saturday, we could discuss various options in person.
hannunvaakuna From: hannunvaakuna Date: August 31st, 2007 02:52 am (UTC) (Link)
i've heard really good things about Fidelity. yes, of course, they're going to charge fees (probably flat per-transaction fees and others that are more related to how well your money earns more money, etc), but everyone i know that uses them is VERY pleased. i imagine they would sit down with you and talk about your comfort level with the various kinds of investment risks, how quickly you would want access to your funds, your goals, etc.
cannibal From: cannibal Date: September 3rd, 2007 04:06 am (UTC) (Link)
Yes, stormlord talks a lot about his investments, and has very strong opinions. My only concern is that he goes a bit further over the edge than I would be comfortable with, on things like maximizing the float on his mortgage. I think his wife is a CPA, and I know Shane is.

I'm also not comfortable discussing my choices too much in a public post... I will say I go to some free investment seminar things, particularly the ones that come with a free lunch, and did real estate and business law classes when I was a kid, but the kind of classes Roxanne did sound wise.
From: nicegeek Date: August 31st, 2007 02:56 am (UTC) (Link)
I suspect that our financial situations are fairly similar. For me, I want my money to grow, but I want to think about it as little as I can get away with. So, I automate everything as much as possible...paychecks, credit cards, bills, investments...they're all set up to happen on a monthly schedule, without my needing to do anything.

I set aside one Saturday or Sunday afternoon each month as "Money day", during which I download all the transactions for the month into my accounting program, and reconcile all of my paper statements with the online stuff. Then I back up my finance file.

I don't do much with single stocks, because I don't want to bother with the research (although I'm pretty happy with some AAPL that I picked up back in 2000). Instead, my automated monthly investments go into index funds (I prefer broad-based ones). When I've got a large chunk of money to put somewhere, I'll usually buy an Exchange Traded Fund (ETF).

The way I see it, there are two styles of investing: You can bet that you know something that the rest of the market doesn't, or you can just try to invest broadly in the market, to make a return off the growth in the world economy. The former is a zero-sum game - every winner takes money from a loser who made the opposite bet. The latter is positive-sum - everyone can win. Since I don't want to put in the time to out-research the market, I follow the second strategy. The other way has higher potential returns, but requires a lot more care and attention.

I don't use an accountant, although I've been tempted these last couple of years, due to the paperwork for my stock in my last employer. Once that's gone, things will get simpler again.
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radiantsoul From: radiantsoul Date: August 31st, 2007 06:41 am (UTC) (Link)
Generally you are trading off risk and return. The greater the potential return the greater the risk you must bear. I am not sure brokers will tell you much more than that. So you need to decide how much risk you are comfortable with. Because you are relatively young you can afford to take more risks than an older person(someone who is six months from retiring might not want to invest in shares as a sudden stock market crash would wipe out a large portion of their wealth, whereas in the long run the stock market does go up).
Probably some sort of portfolio is a good idea with some money in a relatively safe and quick to liquidate method for any short term need and the rest held somewhere with more exciting returns.
madtechie2718 From: madtechie2718 Date: August 31st, 2007 11:54 am (UTC) (Link)
From a personal perspective, I long ago decided that while I could live with not *making* much money from the markets from time to time, I would be very vexed to actually *lose* much of it.

That being so, and given that I don't want to spend my life boning up on investment strategies, I keep around 75% of my investments in Multi-PEP (Personal Equity Plans - I'm not sure what the US equivalent is called) and let the fund managers manage it day to day.

Then every 3-6 months I do a portfolio rebalancing exercise, the last major one was when dramatic growth in one part of the world left me with a higher % of my funds in higher-risk investments than fits my low-risk strategy, so rebalanced to safer harbours.

I keep most of the remainder in zero-risk goverment funds of different sorts, especially tax-exempt ones and some Premium Bonds - http://www.nsandi.com/index.jsp.

The Premium Bonds do return a useful rate of income, especially if you are a high rate taxpayer, since all income from them is tax-free. Think of them as a lottery ticket, but one that once purchased, never expires and can be reclaimed at any time. Not sure of their status for foreigners, but if you'd like to invest in my government, please go ahead...

The final chunk (around 5%), the 'oh sh*t' money sits in whatever building society is currently offering good rates, but with instant access. Rates of 6.5% or greater guaranteed for a year or more are on offer at the moment, so probably time for a change.

Of course, I get friendly emails almost every week from helpful people in Nigeria wanting to make lots of money for me, but I'm not ready to be found dead surrounded by a pool of blood in a hotel room, so have not opted to invest with them...
specialagentm From: specialagentm Date: August 31st, 2007 03:27 pm (UTC) (Link)
My nephew, who is amazing and super-smart, just took over all my stuff for me. He's building up his portfolio right now, so he is totally all over giving the best service to his clients. He whipped my stuff into shape.

Email me if you want his contact info. He would love to help you, "eager" doesn't even begin to describe his attitude. Plus, he's sharp -- the portfolio he laid out for me looks great, and he even advised me on how to invest my 401K (which wouldn't be under his management, but he figured he'd clue me in on how to diversify).

Bonus plus: This is Greg, the "Diet Coke sucks" kid. He's grown a lot in the 10+ years since you made fun of him for that. :-P
amanda_lodden From: amanda_lodden Date: August 31st, 2007 04:36 pm (UTC) (Link)
I'll toss in a "me too!" for the index funds. I put most of my money into SPDR (AMEX:SPY), which is an exchange-traded fund that tracks the S&P 500. I lack the time and motivation to keep up with individual stocks, so I have very few. The ones that I do have are "buy and hold" stocks-- I have confidence in the company in the long run, so unless something odd turns up on the company's annual filings (like suddenly taking on a massive amount of debt with no announcements of capital expenditure to explain it) I don't need to spend huge amounts of time poring over the data.

I do use an accountant for my taxes, but not for my stocks-- my stocks are at E*Trade. (We run our own business, which includes employees, so our taxes are ridiculously complicated, which is why I have an accountant.)
jeffreyab From: jeffreyab Date: August 31st, 2007 08:25 pm (UTC) (Link)
I have a retirement fund invested via what used to be a credit union and is now a bank.

If I buy their mutual funds there is no fee and I use various guide books to determine which ones to buy each year.
From: numignost Date: September 9th, 2007 03:33 pm (UTC) (Link)

You should read Burton Malkiel's "A Random Walk Down Wall Street", it has practical suggestions as well as some good background info.
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