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I know what you’re thinking; “When is this guy going to get back to ball waxing? I don’t care about investing!” While nothing makes me happier than knowing your balls are smooth, it would make me equally happy to know that you were rich. Keep reading. If you’ve already read part one, hopefully you’re feeling a little better every time you see a “special report” about how the stock market sucks pop up during your favorite afternoon television. If you haven’t read part one yet, you can check it out HERE. In part one I talked about some general ideas about the stock market and why you shouldn’t be afraid of it. Now lets talk about how you can use stocks and other investments to make yourself rich:
6 Things Every 20-Something should Know About Investing and The Stock Market (Part 2)
Again, I want to point out that this blog is for educational purposes only. While you should be investing, there is a very real chance that you will lose money even if you do all of the research in the world. Proceed with caution. I don’t want anyone’s mom showing up at Sumo HQ to yell at me. Lets do this:
4) If You Haven’t Set Up A Retirement Account Yet, You’re Late
And I don’t mean fashionably late either.
While you aren’t necessarily late in the “everyone else is doing it, why haven’t you?” sense, you’re late in the “Get off you ass and do something, don’t you want to be rich?” kind of way. At the very least you should be taking full advantage of the 401k offered by your job. Many companies will even offer to match what you put into your 401k. If you aren’t maxing out this amount you are costing yourself thousands of dollars in “free” money.
If your job doesn’t offer a 401k option, or even if it does, you should open a Roth IRA. While these kinds of accounts have some restrictions on how much money you can put in during any calendar year, and how much you can make, you will end up saving thousands in taxes (compared to your 401k and other types of retirement accounts) when you take the money out. That is because you pay taxes on the money when you put it in to the account, not when you take it out like you would with a normal account. Since the taxes are paid on the initial amount your money is free to grow, tax-free.
5) You’re Young, Now Is The Time To Take Risks
If you are under 25, there is no reason that you shouldn’t be taking, let’s call them “calculated”, risks with your investment portfolio. If you are under 30, there is no reason not to take risks unless you have children, and even then I still think it’s worth taking a chance. To tell the truth, there are plenty of very safe investing options out there. US bonds are a good example. You invest your money, 10 years or so later you cash the bond in and your money is still there, plus some more. These are fine if you are getting close to retirement age, but if you’re young you still have time to make some mistakes, recover and get back on the horse. No one ever got rich by buying bonds (not true, but you will not get rich by buying bonds). Never invest money that you cannot afford to lose, but if you can afford to lose it invest it in something a little bit more risky.
Whatever you do don’t put all of your eggs into the same basket. Spread it out a little and one of those risky little investments could end up being the next Apple or Southwest Airlines.
6) Doing Something Is Always Better Than Doing Nothing
If you take one thing from this blog, I hope that it’s this. Invest in SOMETHING. Whatever you’re comfortable with. If you’re comfortable with the stock market, invest in stocks and funds. If you’re comfortable with bonds, invest in bonds. If you’re only comfortable with a money market or even just a regular savings account do that. Just do SOMETHING! If your money is all in your checking account or hiding under your bed in a jar you are only cheating yourself out of the money your money could be making for you. I’m not saying to take your life savings and throw it all onto the stock market, but if you can afford to invest a little (it doesn’t take a lot of money, $50 a month will go far) please do it.
Have a Question about Stocks, Bonds or Just want to tell me to shut up and stick to Ball Waxing, Tweet it @johnnie_cake and Discover more today
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