Lump sum investment

[Billy]

I'm 45 years old as of yesterday the 16th and would like to invest $1500 to $3000 for income growth for 20 years and just leave it and hopefully have a nice nest egg when I retire. I consider myself a high risk taker and aim toward stocks but not sure how to buy into them or how much it will cost me over the next 20 years.

I want the best percentage rate possible and wonder if all worked the way there suppose to how much could I possibly have in 20 years with a good stock option?

Any advice would be appreciated and I also will be seeing an investment advicer next week.

Thanks

 

[BigMoneyJim]

Others are far more experienced than I, but I'll throw in a couple of things:

You probably don't need an advisor. Most or all of us feel that they aren't worth the money for various reasons, the largest being their fee takes away from your returns, and they aren't any smarter than you.

I assume you mean to invest $1500-$3000 per year. For those amounts, brokerage fees would take a larger-than-comfortable bite if you bought individual stocks, so stock fund investing sounds like something to consider, especially if that $1500-$3000 is not a lump sum each year. I'll just say the word "Vanguard" and leave any additional suggestions up to the others.

Okay, a few more words: Vanguard Index 500, Vanguard Total Market Index, Target Retirement series. I'll leave bonds, allocations, book recommendations and such to the others....

 

[Bob_Smith]

Billy, there is no such thing as an investment adviser for folks with $3,000 to invest. The person you are scheduled to see next week is a salesperson disguised as an "adviser". And when he hears you want to talk about $3,000, he won't even be very interested in selling anything to you, and that's a good thing.

If I had $3,000 to invest for 20 years, I'd put it into one of the Vanguard Lifestrategy or Target Retirement funds inside an IRA as BMJ suggests. I would also cancel the appointment with the adviser.

 

[cute fuzzy bunny]

Actually if you go to the vanguard web site and take their little quiz (click 'personal investors' and then in the upper left area 'guided approach to vanguard funds', that should pretty much do you.

Lifestrategy growth or target retirement 2025 or 2035 would probably be good for you.

By the way, Billy, dont be a hero. Dont be a fool with your money. Follow Bob Smiths advice...

 

[Billy]

Yes that is correct the $1500-$3000 is one time only and not a yearly thing.

How do I go about obtaining or buying the Fund stocks or Vanguard. I consider myself a high risk taker and want to put this money to work over a period of time and hope for a good return.

The way I came across this investment advisor was through the Dave Ramsey website and his radio show. Just trying to get information on all of this as he is big on the Mutual funds but I agree with you here that the fee's will eat away at my investment something I don't like.

Thanks again,

Billy

 

[Bob_Smith]

How do I go about obtaining or buying the Fund stocks or Vanguard.   

... the fee's will eat away at my investment something I don't like.

Just log on at Vanguard and request an IRA packet. Actually, you can probably open an IRA online. Go here and look at "Spotlight On..."
http://www.vanguard.com/VGApp/hnw/PersonalHome

And also keep in mind that it isn't just the fees. These salespersons may put you in to some bad investments. I can recall friends and relatives who were sold Limited Partnerships back in the 80s. They lost most of their money.

Vanguard won't do something like that to you, nor will people on this board, so keep coming back if you have any questions.

 

[Billy]

I really appreciate everyone's advice on here I feel right at home. A lot of this is all new to me and feel that everyone on here has a good feel of this investment stuff down and take your advice seriously and will do a big study.

I'll check out the websites suggested and really appreciate all the advice given and yes am cancelling my appointment for next Thursday with that salesperson. I'll be checking back now and then with question if I have any you all have made my day and hopefully a great retirement some day.

Billy

 

[Michael]

I'm 45 years old as of yesterday the 16th and would like to invest $1500 to $3000 for income growth for 20 years and just leave it and hopefully have a nice nest egg when I retire.

Er, if you really want a nice nest egg in 20 years, you will have to save more than $1500. I ran a simulation of what would have happened if you had placed your $1500 into 100% stocks for 20 years in every year from 1871 to the present. The final balance at 20 years ranged from $1639 to $15133 in inflation adjusted dollars. The middle return was $5396. It is unlikely that your returns will be significantly higher than what would have happened in the past.