Age 19, looking to invest

[Work4Fish420]

I am a real estate agent, and cover most of the SE coast of FL. If anyone is interested in some custom tailored lot links for specific areas, email me at [email protected] . I have a business email also, but I'd rather not post it here. For staters, I both bought and sold lots to these peeps (all of my investment thus far has been either in Palm Bay or Ocala/Marion Oaks or Silver Springs Shores)....

http://www.stlucieland.com/

Currently, now that lots have gone WAY down, I'd stay away from the center/rural areas of FL and think Palm Bay at $25k a lot is a steal.

This site is ok, but lots seem to be a little more pricier than average...

http://www.stlucielots.com/

http://www.vacantlotsales.com/

[Work4Fish420]

Or....if you want something shorter term and liquid, can always just bottom-fish and trade the homebuilder stocks instead. I just got back into the market last week after a year hiatus..just a few G in margin account for some extra play money. But, my favorite builders now are DR Horton (DHI) and Lennar (LEN). I think most or all of the bad news is reflected in the beatdown in price, and they are already starting to form a base and creep up again. DHI at $23-$25 and LEN anywhere between $45-$50 should be fine. Any good news that comes out from here should help drift them back to highs...especially if sales start to pick up again in 2007. In my markets, I am seeing signs of at least a bottom and some buyers are returning, which has to be somewhat good news.

[Scorpion Man]

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Thanks for the responses. Only recently have I been playing enough/good enough to make this kind of money/month, but it will be standard.

I am going to look into Emigrant, but my Dad gets P plus 1 on withdraw-at-any time loans with his company so I might put my money there for now since P=8.

I am a little hesitant to start investing in real estate in other states (I don't know enough about it and it looks like a shot in the dark due to my lack of knowledge). Is there any way you could provide more relevant links Work4Fish? Thanks for the responses.

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Don't listen to Work4fish. He is giving you terrible advice for your situation. THis is why you need a financial advisor...it will cost you something but you need the education.

Also -- what does you dad's company do and how big is it? It is not a no brainer that those loans are safe.

[hanster]

Listen to Scorpion Man. He knows what he's doing. Before I even read his post I did not get a good enough vibe from the previous responses. First, putting money in municipal bonds + CD just because it's safe is not smart because you're losing value. Second, you are not looking for long-term investment with IRA which you can take out when you're 59 1/2 (Roth IRA is the better one, there are several types). At the age of 19, you will not be getting your money's worth from a financial advisor who you pulled out from a website/yellowbook. A SOLID referral would be fine. Mutual fund would be the best way to go for you if you really want to "play it safe", per se. I'd suggest you to read some books, browse around the forum a bit to see some posts from Sniper or El Diablo.

BTW, 19 year old + 15k does not get you the real estate that you want. A hole in a wall would be an actual description of the place you're buying.

Hope this helps. [img]/images/graemlins/smile.gif[/img]

[gull]

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Don't listen to Work4fish. He is giving you terrible advice for your situation.

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Thirded.


To answer your second question: in terms of stocks, you should look into investing with index funds.

Also, if it's possible put as much as you can into a Roth IRA. You essentially get to skip paying taxes on your gains. With a Roth IRA, you can withdraw your principle at any time (up to the amount you've put into it). Only your gains are not withdrawable penalty-free.

[zimmer879]

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Don't listen to Work4fish. He is giving you terrible advice for your situation. THis is why you need a financial advisor...it will cost you something but you need the education.

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Agree with the first part diasagree with the second. It doesn't take much time or effort to educate yourself on the basics of investing, and you don't need an advisor to it. Go to fool.com and start reading. Check out the "index funds" section first.

[Scorpion Man]

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Don't listen to Work4fish. He is giving you terrible advice for your situation. THis is why you need a financial advisor...it will cost you something but you need the education.

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Agree with the first part diasagree with the second. It doesn't take much time or effort to educate yourself on the basics of investing, and you don't need an advisor to it. Go to fool.com and start reading. Check out the "index funds" section first.

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So, Greg...you are going to have to use your own judgment on this one. You are going to find that Zim's sentiments here are the majority opinion on these boards. While I do not think it is horrible advice, I think it is not optimal advice for a 19 year old.

I am twice your age, I have an MBA from a top school, I was a professional investor in the markets for 15 years...and I find it helpful to use an "advisor".

The practical problem is that most advisors suck, and a bad advisor is worse than no advisor. That said, a good one would be tremendously helpful to you. The suggestion (made by many on these boards) that you can just read up on indexes and be fine is overly simplistic in my view. THere are many financial products you are going to be introduced to over time -- everything from life insurance, to choosing between ETFs and mutual funds, to being presented with opportunities like the one you are talking about with your dad, to ultimately learning how to investigate individual stocks, to writing covered calls, to understanding the implications of wash sales, to a myriad of tax and ultimately estate related questions. Some of these options have confusing and hidden fee structures...some of them have pitfalls that are hard to see if you have not been around the block. Also, a good advisor will, from time to time, give you ideas that are value added that might make you, for instance, overweight small cap vs. large cap, etc.

There is also research and thought pieces available from the wireline houses that you might find educational.

My take is this -- it is not that expensive to use advisors and there is no lifelong commitment. At the least, start with one and learn the ropes a bit. If, after you gain comfort, you decide you are getting no value out of it or want to do it yourself - toss the guy. It's a very cheap education.

I also find that having an advisor around is helpful unless you are a very diligent person. Many people will leave assets lying around in suboptimal ways for years just out of laziness. A good advisor will make sure this doesn't happen.

You have a tremendous amount to learn, and the world does not end with a globally balanced index approach. AFter you get educated, you might decide that that is your preferred approach. But get educated before you make that decision.

Everyone on these boards focuses on the 1% or so (before tax if you structure it right) that it costs to use an advisor. I am focused on the 10-50% potential costs that many people incur out of ignorance.

p.s. after i wrote all this i reread your post and realized you need a bit more $ before executing on my advice above...but I still think you should do what I said. It is also possible you could find a good guy who would take you on if he believes you will have substantial earning power over your lifetime. If a guy would take you on for 1%, you are paying $500 (pretax, you can often cut that down by deducting it) per year for his services at $50k. People don't fill their own cavities, cut their own hair, and file their own lawsuits. I don't understand why people at 2+2 think its a slam dunk that you should invest without any help.

[zimmer879]

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You have a tremendous amount to learn, and the world does not end with a globally balanced index approach. AFter you get educated, you might decide that that is your preferred approach. But get educated before you make that decision.

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Well we can certainly agree on this but have reached opposite conclusions.

There's nothing you can learn from a advisor that you can't learn yourself, and I urge you to do so. At the very least learning the basics will help you to choose a competent advisor and allow you to feel a little bit more in control of your own finances. If you have no desire to learn on your own, by all means hire an advisor, but be very careful about who you choose.

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People don't fill their own cavities, cut their own hair, and file their own lawsuits. I don't understand why people at 2+2 think its a slam dunk that you should invest without any help.

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I really really dislike this analogy. There's a very sobering and oft quoted statistic which may open your eyes to the investment world if you haven't already heard it: 75% of mutual funds on average don't beat the market. That is to say, if you just took your money and plopped it in an index fund and never learned another thing about investing, you would beat 75% of the professionals in charge of mutual funds. Could you, by doing nothing, be more effective at filing a lawsuit than 75% of lawyers, or cutting your own hair than barbers, or filling your own cavities than dentists?

Now there are no absolutes in what I'm saying here. Some mutual funds beat the market, and some financial planners will help you more than you can help yourself, but understand that their first obligation is to themselves and their firms and not you, and you should be skeptical about what they say. The reason most of them exist at all is because their clients aren't educated enough about personal finance to hold them accountable. So do yourself a favor and learn at least the basics of investment and then go from there.

[Scorpion Man]

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You have a tremendous amount to learn, and the world does not end with a globally balanced index approach. AFter you get educated, you might decide that that is your preferred approach. But get educated before you make that decision.

[/ QUOTE ]

Well we can certainly agree on this but have reached opposite conclusions.

There's nothing you can learn from a advisor that you can't learn yourself, and I urge you to do so. At the very least learning the basics will help you to choose a competent advisor and allow you to feel a little bit more in control of your own finances. If you have no desire to learn on your own, by all means hire an advisor, but be very careful about who you choose.

[ QUOTE ]
People don't fill their own cavities, cut their own hair, and file their own lawsuits. I don't understand why people at 2+2 think its a slam dunk that you should invest without any help.

[/ QUOTE ]

I really really dislike this analogy. There's a very sobering and oft quoted statistic which may open your eyes to the investment world if you haven't already heard it: 75% of mutual funds on average don't beat the market. That is to say, if you just took your money and plopped it in an index fund and never learned another thing about investing, you would beat 75% of the professionals in charge of mutual funds. Could you, by doing nothing, be more effective at filing a lawsuit than 75% of lawyers, or cutting your own hair than barbers, or filling your own cavities than dentists?

Now there are no absolutes in what I'm saying here. Some mutual funds beat the market, and some financial planners will help you more than you can help yourself, but understand that their first obligation is to themselves and their firms and not you, and you should be skeptical about what they say. The reason most of them exist at all is because their clients aren't educated enough about personal finance to hold them accountable. So do yourself a favor and learn at least the basics of investment and then go from there.

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Ummm... when you say "open your eyes" are you talking about OP or me? You continue with your simplistic analysis of investing. Of course mutual funds trail the market. Mutual funds, in aggregage ARE the market, but with fees layered on and, generally, modest cash balances holding them back in up markets (which are more common) and helping them in down mkts (less common). THey also have transaction costs, which are negligible in indexes. This is the sort of thing that a good advisor would elucidate.

Indexing is not the end all be all. There are decisions to made around asset allocation, and they are not static. There are other decisions (should I loan my brother money? should I invest in my dad's restaurant) that an advisor can help with. There are some gnarly tax situations if you ever make any real money. I will say it again...it is very cheap to learn this way, particularly when your assets are small. You can always change to investing on your own later in life. You are not experienced enough or old enough to learn what you need to know in totality from the internet. In addition, just having someone on top of your portfolio so you don't get lazy and let things get out of whack is probably worth the price of admission for many people.

Learning on your own is a good thing, no doubt about. YOu have to ask yourself honestly how much time you are willing to put in. It's been twenty years for me, many of which were 14-15 hours per day...and I am still learning. Maybe I should use Zim as my advisor, since he already appears to have it down pat!

[Tien]

if you have no idea where to put your money, put it in the bank.

What you need to do first is spend time to educate yourself in all the methods of investing and choose which ones is best for you.