Investing Resource Recommendations

Submitted by HeWhoIsVeryGullible t3_z8b8sk in personalfinance

I'm currently a 21 year old college graduate saving up to begin investing as I know it is one of the best ways to save for the future. However, I am rather ignorant to the best way to go about that. Upon trying to do some research I keep running into abbreviations I've never heard of and I'm not even sure where to begin starting to invest.

I was wondering if anyone had any tips or resources (books, courses, shows) that might help me better understand it. Perhaps a tip or a book that helped you better understand investing. Any tips or resource recommendations are welcome!

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grokfinance t1_iyaqmfm wrote

If you read and understand the information on these pages you will have better financial knowledge than probably 70-80% of the population...

https://www.fidelity.com/retirement-ira/roth-ira

https://investor.vanguard.com/investor-resources-education/how-to-invest/risk-reward-compounding

https://www.investopedia.com/terms/1/401kplan.asp

https://investor.vanguard.com/investor-resources-education/understanding-investment-types/what-is-an-index-fund

https://investor.vanguard.com/investor-resources-education/understanding-investment-types/index-funds-vs-actively-managed-funds

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HeWhoIsVeryGullible OP t1_iyaqx4t wrote

Thank you stranger! Roth IRAs are one of the things I've definitely been interested in learning about, that and mutual funds, as I keep hearing alot about them. Ill get to reading!

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grokfinance t1_iyarmzm wrote

Roth IRA is just the type of account. Think of it like a box. You put money in the box. For an IRA the money into the box comes from your bank account. For a 401k (another type of box you get from your employer) the money comes from your paycheck. Then, once money is in the box you have to buy investments (stocks, ETFs, mutual funds, bonds (probably not until you are older) with the money.

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HeWhoIsVeryGullible OP t1_iyas00u wrote

Should one have both an IRA and a 401k then? Is two boxes beneficial? I know a 401k is matched up to a certain percentage by your employer, so is it better to just put extra money into that account rather than opening an IRA and investing that extra money into there instead?

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grokfinance t1_iyat189 wrote

Yes, you should have both. General advice is to contribute enough to the 401k to receive the maximum amount your employer matches since that is free 100% return on your money. Then, max out a Roth IRA. If you can afford to contribute more money for retirement then contribute more to the 401k up to the max. The more money you get invested at the youngest age possible the better so your money has longer to compound and grow. At 21 years old, every $1 you invest for retirement now should grow to something like $20-25 over the next 40 years. Wait 5 years to start saving and every $1 will only grow to about $15.

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HeWhoIsVeryGullible OP t1_iyatf1b wrote

Thank you for your help! Are there any tips you've recieved that have helped you with investing?

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grokfinance t1_iyatn20 wrote

The ones I have already given you. Passive index funds. Keep the expense ratio low. Avoid annuities. Avoid whole life, variable life or universal life insurance. Avoid "advisors" that work for insurance companies and banks. Read the links I provided. Those will provide good education.

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mrbrsman t1_iyat355 wrote

Simple Path to Wealth by JL Collins. Great starting point. He also has his stock series at his blog that the book is based on.

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