Sunday, October 14, 2012

What do you Invest in?


@stlsmoore - looks like you live in US as I do.

So for me - reducing my taxable income as @dave330i and @vanquish23 mentioned are a priority for me. And deferring compensation using a 401K and other methods are a great way to save and invest for the future.

I can understand your reluctance if you are unfamiliar with how the capital markets work, but if your employer offers a 401k and you are lucky enough to get a matching contribution, a 401K is the absolutely best investment you can make. Most 401K investment choices are geared towards "non-experts". Pick a low-yield bond fund if until you are more comfortable.

After a 401k, I would suggest an IRA if you qualify or purchasing a home.

There is a school of thought, that one should invest in opportunities that one knows best. In our case on TE - that would be IT. But because I already work-full-time in IT, I tend to prefer diversification so I invest in non-IT related opportunities.

For example:
I do invest using the stock-market but I stick strictly to index and sector funds because I don't have the time to track individual stocks. And to limit risk, if I was to invest in mobile homes like you suggested, I would probably purchase a REIT fund that does that instead of trying to be a landlord or tying up capital. The stock market gives you liquidity and reduces your risk.

Some of my colleges and acquaintances in IT similarly invest in non-IT opportunities - for example, gas stations and restaurants - but that just seems like too much work to me

For my family - after doing all above - I do have a share in small partnership where we started to invest in condos which we will rent. The idea is to purchase 2-3 condos. The rental income is primarily a hedge against the possibility of continued falling real-estate prices but our bet is on a recovery in real-estate prices and capital appreciate of the properties. Right now, we bought 1 property and we are in the process of trying to rent it.

BTW - I'm a proponent of paying down debts first before investing.

Source: http://www.techexams.net/forums/off-topic/82451-what-do-you-invest.html

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