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NewDArt
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If you have any questions, let me know. I've been helping people invest for a while now.
I just might take you up on that
If you have any questions, let me know. I've been helping people invest for a while now.
This is how I went with it.
I was working, I had about $13k in the bank (no credit card debts). I felt like that money was wasting, so I took $5k and put it in the stock market while I worked.
That 5K soon enough turned into 7, in the meantime my bank account again reached 12k or so (I'm not a big spender so after expenses and taxes I was netting about 1k/month from my salary). Again, I added 5-6k to the stock. I did that for years, portfolio growing from its own growth plus periodic injections from what was left of my salary after expenses. I think I started when I was 31 or so, so in about 13-14 years it was high enough that I could decide to retire.
Yeah, I wish I'd cared about this a lot earlier. I'm 41 now.
But I've had some hard lessons to learn about money - so I guess I wouldn't have been ready before anyway
I use (and pay for) a professional boutique financial advisor who does all the heavy lifting and pay 0.55% of my total portfolio in fees. Finding the 'right' advisor takes some effort and research, but it is VITAL. Fortunately, after visiting a few I got some recommendations from friends which helped. I spent a year planning before I invested in the funds just to make sure I got everything right, then I retired from full time work!!
Also, I'm not that smart.
For instance - let's say I have $10K in debt and $10K cash to invest.
If I pay that debt, how would I go about investing? Then I would have to save up money over a long period of time - which while it might be "cheaper" from that perspective, it doesn't leave a lot of potential for a return on investment for a long time.
Is the idea that I would instead invest minor amounts of money over time instead, or?
I thought the general notion was that, the more money you have for investments - the more you can expect to get in return through smart investments. Which should mean that I'd be able to pay off the debt eventually without missing a beat in terms of investments.
As for a "fun" account - I think that sounds good
As @Corwin; said, if you're going to use a financial adviser, it's key to find the right one. If you can find one that does not work on a commission, that might be ideal. They usually work off the commission of various funds that they sell, so it's in their interest to not sell you un-managed index funds, since they wouldn't be able to make a living off of it. Again with management expenses, even half a percent could mean 5 to 6 digits worth of fees that could have gone to you instead.
This Article Explains it well
I would argue that you do not need a financial adviser (in over 15 years, I have yet to find a financial adviser that could recommend funds that would beat the market average of 7% over the long term, even with crazy funds that started out over 20% in the first few years), as long as you do your due diligent research prior, then after that you only need to spend about 30 minutes every year re-balancing your portfolio percentages.
Two small points: First, using an adviser most of my funds have beaten the market average and all at least equalled it. Second, an adviser is often able to get a better deal on costs. I get wholesale funds rather than retail, which ends up saving me several percentage points. I have found using an adviser is worth the cost since they are experts in the field, they know much more than I do and it's in their best interest for me to do well. However, in the end, it's a personal choice.
I've had other people's advisers try and convince me that their mutual fund is the one to buy, and is and will continue beat the index. I ask them 2 simple things:
1) Has this fund been available for over 15 years?
1) Show me proof of your investment in this fund since inception.
Caddy, I am retired, therefore the only additions to my fund come from growth and re-invested dividends. As I said earlier, I made a NET of 15% in the past year after all fees were taken out. I draw down on my capital throughout the year, and yet the value of my portfolio has not decreased since the GFC and has actually increased in the last few years, so my adviser must be doing something right!! Oh, she has 2 degrees and is licenced by the Gov't.
It depends on the type of debt.
If you have a mortgage at 3% interest rate, then it does not make any sense to pay it off as your expected returns from investments should be higher than that (in addition to the house value hopefully going up).
If your debt is credit card debt at 40% interest rate per year then you should do everything you can to pay it off quickly, because otherwise it doesn't matter how much you invest, it is unlikely to generate more than 15% a year (unless you're a very lucky SOB).
Oo, one of my favourite subjects
A lot of good stuffs had been said already. But here are some ( Nordics specific stuffs )
In sweden we have something called ISK ( Investment Saving Account ) I think there is something similiar in Denmark. But the danish one is limited to 500 000 danish crowns, so for your sum it should be perfect. This account has a fixed tax of your full amount per year, but no tax on your gains. So either start such an account, or start a capital insurannce. Otherwise you have to pay 30% tax on all income.
Use an online broker, nordnet is a good one in my opnion, they are cheaper for buying and selling and they also have a lot more to choose from.
If your after returns, you can get better than what the other people recommended here, for example this fund: http://www.carnegiefonder.se/fonder/strategifond-a/ , that fund started in 1988, and has beaten the stock market average since then. Just an example there are a lot of different funds. I can specify more if you decide to go that way.
These days there are also a lot of day traders who make huge returns, but they are full time expert traders, look at this for example: https://www.shareville.se/medlemmar/it4ever/portfolios/86942/yield check his five years return ( 5 år for english people who want to check ). However his the best so don't expect to reach that level. Just to confirm that is it possible.
Another thing I have to say is that if you are willing to take the risk it can really payoff to invest in smaller stock companies. Especially in the fields of technology or medtech. This is high risk. But you can never lose more than 100%, however you can gain large returns for example: https://finance.google.com/finance?q=VITR,+Vitrolife ( check 5 years ) , in my view it is kind of a no brainer that this company would do well, people are older and older than they get children. So the need for the services Vitrolife is offering is very likely to increase. Same with internet of things companies for example. If you know technology you can do pretty well. But if there is a crash you might lose most of your capital in this way.