My efforts at investing and documenting what workes for me
I will be documenting what I am doing in effort to invest my money so that way I can keep track of what I did and document what worked for me.
Here are the types of investments that I know about: S&P 500 low risk, auto investing by rounding up apps like "Acorns" low risk, Roth IRA and 401k retirnment plans by using companies like Vangaurd low risk, gambeling esk high risk investment apps like "Robinhood", investing in cryptocurrency risk depends, and investing in things like real estate (air b&b, property ownership by becoming a landlord).
Low risk: conservative and the risk is low in losing money
High risk: Higher in risk and I often view it as very similiar to gambling
My plan is to invest in conservative approached using low risk because I am not a gambler and I can't imaging just being okay with freely giving other people the money that I earned by working at an entry level job.
My Research
S&P 500: also known as "Standard & Poor's", is a financial services company founded in 1860. It evaluates the performance of U.S. companies by tracking credit history to assess how reliable the companies are in repaying loans. The company uses a grading system. If you are interested in looking at their system they use the wiki page has all that info. They do other things too like publish research on stocks, bonds, and commodities. And the "500" part just means the top preforming 500 companies in the U.S.
Going off of this description it makes sense why most people say that it is a safe and good way to invest. It's essentially means you can trust this company to do the work for you and hold on to your money because they keep track of which companies are preforming the best financially and are trust worthy. They will also use your money and divide it evenly amongst these companies lending them your money which in turn will muiltiply your money and give you a more money back in return for allowing them to borrow some money.
While at my work a coworker of mine went off about buying another "mystery box" from Amazon again and spending $500 on it. These boxes are items customers have returned to Amazon for xyz reason and Amazon consolidates all of these items together in a box and sells them to people. To me it seems too close to gambeling and there is no way I would spend $500 of a box of stuff that I don't even know what is in it. On top of that my co worker has to travel 12+ hours to Michigan to pick it up.
This all seems pretty retarded to me. This time around after hearing more about it I mentioned that my coworkers would be better off investing in S&P 500. My coworker replied with "what's that?" I responded with a brief description. Then my coworker said that they were forced to invest money their whole life by their parent's and that she wont even be able to touch that money until she is 65. She probably thought I was talking about a 401k retirnment plan in which you do have to be 59.5 years old to withdraw and pay a fee and taxes.
The S&P 500 stocks can be withdrawn at any time for any reason, although you will have to pay captial taxes on that money.
What the experts say
The one expert that stuck in my mind is Graham Stephan on YouTube. There are a lot of people on YouTube claiming to be experts in all kinds of fields and same goes for the internet and the world. It's annoying that I have to sort through who to trust is telling the truth and actually going to help. This is one of the few out there who I have heard talk about investing and financing that I made sure to remember because he doesn't over complicate things and seems very transparent about how he made his money. Also he genuinly seems to care that other people make money too. But this is all a matter of opinion but it's going to be my starting point on picking an "expert" to research.
Roth IRA/401k retirnment plan: the benefits to this are compound interest, investing while in the lower tax bracket means.... good because....
What I have done so far
I created an account with Everbrite and started an application for a HYSA for the $2,000 sitting in my savings account. I need to talk to my wife before making the transfer but with a %4.5 interest rate I will be making around $50 for the first year with $2,000. This is better than not gaining any interest where it's at now. When I get that saving account up to $12,000 which is my ideal emergency fund, I will be making around $550/year in interest. This is assuming the interest rate stays the same.
...to be able to invest in a retirnment plan and invest in the S&P 500 all in one spot. Also I downloaded the "Wallet" app on my tablet to be able to consolidate all my money information from all my bank accounts and investing.
Before investing it needs to be made known and handled any interest I or you are paying right now and to see if we can get out of that. I am paying interest on my truck right now, so what that is doing is taking money away from me over time when it doesn't need to if I can find a way to pay it off early.
Steps I am taking to get started with investing
Step 1: Create a 3-6 months of expenses in a savings account for emergency funds. For me based off of mine and my wifes spending habbits ~$2,000/month, which makes my emergency budget ideally $12,000. Keep the emergency fund in a high yield savings account (HYSA) which offers a much higher interest rate than traditional savings accounts. I need to ask my wife if it's okay to move our savings from the USAA savings account to a that new one before finishing the application for the HYSA.
Step 1.5: Find out what the APR rate is that I am paying on my truck loan. Because if it is higher than 6% that needs to be addressed first. I don't think it is higher than 6%, from what I remember it is 4.5 or something close to that.
Step 2: Open Vanguard account and start funding Roth IRA retirnment.
Investment Apps
Automated deposit's/round up/micro-investing apps like the apps "Acorns" & "Wealth front"
