I'm ignorant when it comes to money

[masterMood]

Make it brief, save you time, you earn more money that way too.

1) Want to be confident about investing money (i.e. portfolios, stocks, mutual funds, real estate, health field, um gold/silver, mines, foreign countries, etc. I dunno whatever the whole list is
2) Want to learn the system well and be comfortable selling/buying/finding good brokers/good strategies
3) Don't recommend "Poor Dad Rich Dad" mostly fluff. I'm reading "Millionaire Next Door" (mostly fluff, and basically said that to be a millionaire you need to save a lot of money and be frugal) and will read probably over summer "How to influence people or w/e its called" by Dale Carnegie --- looks good.
4) I know what a stock is, now there are like a googol terms A/E, etc. i have a very very very basic understanding of money, inflation, taxes, loopholes, investing in good companies, proper research, good books.

Need advice 4 real

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[DrBowtie]

Buy a personal finance for dummies book. You might want to purchase some real cheap penny stocks just to see the motions of buying stock, getting their financial statements.

You probably won't be investing in futures or much of the stuff you listed unless you want high risk/high reward but you won't have that kind of money to play with most likely.

 

[masterMood]

yeah i have that "dummies" series book for investing, i've found that most of the "bestseller" books that show the secrets to making money are mostly fluff which could've been described in 2-3 pages.

 

[Shredder]

good thread, i agree about the fluff factor.

check some fundamentals of finance books. millionaire mind and next door are kind of lame. many books are more inspiration and less substance, like those two. motleyfool.com, now fool.com is a good site. i too want to learn about it, but ive largely put it on hold, since its really hard to learn without actually having a substantial amount of money to practice with. its a lot like learning science without lab classes or research, or learning medicine without patients/residency. tough.

finance, accounting, macroeconomics--these subjects may be helpful in building a base for personal finance. there are some good reads on futures and options out there which are more sophisticated, but like brett said they are risky and require either lots of money up front or large margins. they seem like a lot of fun though. and a great way to profit from political situations or natural disasters, such as oil, katrina and wars.

i didnt really like "how to influence ppl", its advice seemed intuitive. be nice, praise ppl, talk about others rather than oneself...so on and so on. it didnt have a thing to do with personal finance/investing though? learn to interpret financial statements and evaluate mutual funds of all sorts. oh, a good read is "wall street journal to investing" , and theres one on personal finance that i have yet to check out

 

[DrBowtie]

I'll second fool.com

Basically it has lots of info which will takes days to wade through. I learned a lot about life in general on the site (like insurance, home mortgage etc.)

I'll also second learning how to read a financial statement. IE do they use FIFO or LIFO can make a large difference in the income of the company and therefore perceived value in the stock.

I think you can get some of these on the SEC.gov website.

 

[Shredder]

fifo and lifo..i vaguely remember that. is it related to JIT, dell style? also straight line depreciation or double decline--ick, i didnt like that stuff much. marketing was so much cooler, but not pertinent to this discussion.

its all about determining undervaluation and overvaluation. markets are so neat--the combined information of millions of investors coming together to put exact values on stocks or events. betting markets are more accurate than any expert opinions. they can predict weather better than meteorologists i think, just anything imaginable, even terrorist attacks. good book on that is "wisdom of crowds", thought provoking concept. and getting the information edge is the trick to winning, but its so hard. insider trading!

 

[Law2Doc]

Make it brief, save you time, you earn more money that way too.

1) Want to be confident about investing money (i.e. portfolios, stocks, mutual funds, real estate, health field, um gold/silver, mines, foreign countries, etc. I dunno whatever the whole list is
2) Want to learn the system well and be comfortable selling/buying/finding good brokers/good strategies
3) Don't recommend "Poor Dad Rich Dad" mostly fluff. I'm reading "Millionaire Next Door" (mostly fluff, and basically said that to be a millionaire you need to save a lot of money and be frugal) and will read probably over summer "How to influence people or w/e its called" by Dale Carnegie --- looks good.
4) I know what a stock is, now there are like a googol terms A/E, etc. i have a very very very basic understanding of money, inflation, taxes, loopholes, investing in good companies, proper research, good books.

Need advice 4 real

If you want to be "confident" in investing, do you mean safe? If so diversity is the key -- a mix of equity and debt investments. Mutual funds are nice because a professional fund manager has already diversified the holdings across a range of stocks and presumably does the research for you. The goal with these is to make steady returns over time. But in general, your ability to make money more rapidly is tied to the amount of risk you are willing to take, and unless your information (and the rapidity you get it) is superior, you can never be "confident". In terms of books, the Dale Carnegie book is great for life but not great for investing. It provides you with good public interfacing tools. If you took it to heart, it could probably could help you down the road in landing jobs, clients, but certainly has no worth in terms of investing.

 

[aamartin81]

I just wrote a response in another thread regarding books written by Peter Lynch and Warren Buffet. These provide some background into financial markets. Stock selection, for the most part, is better left to someone who makes it there business. There sheer volume of information that needs to be analyzed is overwhelming for an individual investor. Companies that provide investment services often do this research in house (Ie Wachovia, large institutions) or purchase it from a third party (Hedge Funds).

A site that provides information regarding SEC Filings (Multiple hundred page documents) and information in more simplistic terms is hoovers.com. You can find info on key competitors, people, etc...

As far as learning the basics for yourself, I suggest enrolling in basic finance courses. There is only so much to learn on your own and asking people on a public forum to dessiminate (spelling?) thousands of pages of text into a message that accurately reflects the body of information is not possible.

Good luck, and remember that sometimes, that percentage charge makes sense!

 

[ChuckRock]

I would also recomend watching financial news networks like cnbc to get a better feel for how the sentiment of the market works. It's help you better understand what moves the market beyond just the price of oil. Some of the stock picking shows like Mad Money are pretty good too, just don't get too excited about the recomendations, the real value there is when they explain the thought process you should go through when picking investments.

 

[Shredder]

thats a good point, you can also read things like WSJ and forbes (best mag)...well, robb report and worth are pretty good too for inspiration hehe

 

[Law2Doc]

thats a good point, you can also read things like WSJ and forbes (best mag)...well, robb report and worth are pretty good too for inspiration hehe

Just bear in mind that even the professional investors who do poorly read the journal -- it is the bible of the industry, so that clearly doesn't give you any edge, it just lets you talk intelligently. I'm guessing, but suspect those folks who are successful enough to get profiled in forbes, worth etc. tend not to waste their time reading those mags. Good for the bathroom though. (perhaps that's what you meant by inspiration ).

 

[ISUbus1doc]

The simplest way to invest is just to buy index mutual funds....

These mutual funds offer the lowest cost, very low risk, and are easy to follow. Even better may be ETFs (Exchange traded funds)...these are like buying shares of an index instead of buying shares of a mutual fund that mimics the index.

Either way, these two methods cut down on broker/fund company costs (<1% per year for index funds...closer to 3% for std mutual fund), manage risk (you are diversified), and offer better returns because even the best investor will not beat the market every time. ETFs and Index Mutual Funds are like savings accounts that will earn the average annual return for the market of around 6%.

If you want to get fancy with stocks, derivative (options, futures), bonds, commodities....leave it to a broker and don't bank huge returns. ETFs and Index Funds are the way to go.

 

[Law2Doc]

The simplest way to invest is just to buy index mutual funds....

These mutual funds offer the lowest cost, very low risk, and are easy to follow. Even better may be ETFs (Exchange traded funds)...these are like buying shares of an index instead of buying shares of a mutual fund that mimics the index.

Either way, these two methods cut down on broker/fund company costs (<1% per year for index funds...closer to 3% for std mutual fund), manage risk (you are diversified), and offer better returns because even the best investor will not beat the market every time. ETFs and Index Mutual Funds are like savings accounts that will earn the average annual return for the market of around 6%.

If you want to get fancy with stocks, derivative (options, futures), bonds, commodities....leave it to a broker and don't bank huge returns. ETFs and Index Funds are the way to go.

Mutual funds are clearly the safest way to invest in equities, but as you correctly noted, over time the best you will do is 6-8%. The funds are safer than normal investments because they are very diversified, but for the same reason cannot grow much, because they reflect a market index weighted average. I suspect those on this thread with dreams of wealth through investing are going to need to take substantially more risk though. And while you might be able to do better than the market, you will not do so by passive investment. You need to do signifcant research and homework, to predict trends better than the professionals. And medicine is not a career during which you have the time or inclination to do this kind of research. You will not get what you need just by reading the WSJ.