Originally posted by DYepes
Besides the end of society scenario, considering my income what am I doign wrong or right, and what should I change? I am of the poor persons, and do
not exactly have the sort of wealth you guys have to own stock accounts. I am thinking about these bonds, but what kidn of quantities do yall buy
I started out where you did, or a notch lower. Yep, I'm pretty sure shoveling horse***t ranks below the blue vest.
Remember, the secret to riches is NOT increasing your income. All it takes to become rich is this:
To live below your means.
Spend less than you earn. Cut corners.
Here are the books that got me out of the oppressed classes, and into white collar grime:
"Your Money or Your Life."
"The Richest Man in Babylon"
"The millionaire next door"
(and the book of Jonah out of the Bible. But that's another story)
Anyway, I would suggest you buy a firesafe and a bicycle lock. lock the handle of the safe to your bed, so no one can steal it. Every paycheck, put
10% of your income in the box. Focus on first on an emergency fund of 1000 dollars. Then focus on getting out of debt. (The grand will make sure
that car problems or dental bills don't keep you using the plastic.)
Since most credit cards are between 12 and 18 percent interest, and most investments don't pay as well, the BEST investment is wiping out your own
debt. The return on your investment is much more rapid than even a GREAT year on wall street.
Next, start piling up cash in your box. Every three months, divide the money into 3 stacks. With the first, keep it in cash. With the second stack,
go to the bank and tell the clerk you want a Government savings bond. You can go to the govt website and buy them online. I suggest either series I,
which will vary with inflation, or Series EE, which wont. Personally, I like the fixed rate, because I play them off against rising interest rates.
But either is fine.
With the last third, go online. I used to use a website called "Netstock Direct." Another is "Sharebuilder." Basically, they give you the
information on companies that will sell you stock directly, without using a broker. There are a couple of drawbacks. First, they will only fill your
order once a week, and you cannot predict exactly what price you'll get. Selling is the same. But on the other hand, the handling fees are pennies
instead of dollars, and they wont pressure you to buy buy buy like a broker will. The power is that you can buy a given stock in dollar amounts-- $5
or $10 or $50, instead of having to buy whole shares. This is a lot easier for the little guy. They will also buy your stock back on whatever
weekday they trade, and mail you a check.
I would only buy stock on the Dow 30, the list of the 30 biggest companies in the NYSE. I would also go to a used bookstore and get a little book put
out as a come on for a financial paper. it's called
"The Wall Street Journal Guide to Money and Investing."
It explains things like the federal reserve, and how to buy bonds. It is free if you subscribe; but I'd get the WSJ at the library. A lot of used
bookstores will sell old second hand copies of the booklet, because it is that high in demand. you don't need to be a stockmarket ace, as long as
you stick with long-term stable companies, and average your purchases over years and years.
If you take the advice in this post, I've given you everything you need to retire a millionaire, if you are under 35 and have discipline.
The discipline is a lot more important than the age, by the way. I've seen a 50 year old get serious and retire a millionaire, ---in addition to
opening his own brokerage!