Thank you,
To all those who were able to show up and contributed at the first Investment Club.
Since there is such an interest in it, next time we will go over mortgages and how to afford a house.
Here is what we went over for our first meeting.
1) Keep a budget.
Keep a budget so that you can figure out where your money is going.
Here is the Excel Sheet from Nathan to help you get started:
http://www.geocities.com/craigfield12/Budget_Sheet.xls
Nathan also recommended keeping 3 months worth of receipts to keep an average of your costs.
2) Keep track of your credit.
This is the website that is free.
Other sites will try to sell you a service, but this one is free.
annualcreditreport.com
It's good to look at this at least once a year to know that nobody has stolen your identity.
You can also make sure there are no mistakes.
3) Take advantage of High Interest Savings Accounts.
I believe everyone should have a High Interest Savings Account.
This account will be extremely beneficial to you.
Here is the one I currently use:
www.hsbcdirect.com
6% until April, then back to 5.05%.
I can not stress this point enough,
if you have cash that is just sitting in a regular account you are most likely making 1% interest.
Just moving that money into an HSBC account means your money will work harder for you.
4) Make your Credit Card Work for you.
Ben in our group has a good Credit Card Chase Rewards Plus (Visa).
Unfortunately, it doesn't appear to be available right now.
Here is a site that has a comparable Chase card as well as the card I currently have
Citibank Dividend Platinum Select (Mastercard):
http://www.creditcards.com/reward.php
My favorite features of this card are:
3% cash back on gas, groceries etc.
1% cash back on everything else.
Once I have accumulated over $25, I just login and click "send me a check."
I get a couple hundred dollars a year from this.
Virtual Credit Card: This is a program that lets you buy things online with a credit card number that will expire the next month. That way if the company gets hacked and they steel your credit card number, it will expire too soon for them to use it.
Side note:
I have friends who don't use credit cards. They got burned and they stay away from them. If you know you can't trust yourself with Credit Cards then stick with what you are comfortable with. My suggestion would be that if you learn more about credit you will learn to become more comfortable using it. It's also very difficult to get a loan with no credit history. If you don't have a credit card, you won't have a credit history.
5) Take advantage of Compounding Interest.
This file shows what can happen with a little money and a lot of time.
In short, the sooner you start the more you will have for retirement.
www.geocities.com/craigfield12/IRASheet.jpg
If you don't have a retirement account (401K, Roth IRA), then you need to start one now.
6) Read Financial Articles.
Nobody is going to take care of your money better than you.
I would suggest reading the weekly articles posted by yahoo.
These are from authors of many famous financial books.
The authors tend to repeat what is in their books and they speak about more up-to-date information as well.
http://finance.yahoo.com/expert/index
My favorites are Ben Stein, Suzy Orman, Jeremy Seigel and Robert Kiyosaki.
Books from these authors are at your local library.
Here is a website that keeps up-to-date information on the best interest rates.
www.bankrate.com
7) Ask a lot of questions.
For some reason it's a faux pas to speak about finance.
Yet we all need to master finances to take care of ourselves and our family.
Hopefully we will all be willing to share our successes and mistakes so that others may benefit.
Answer to a question:
Here is the article that goes into details about keeping both Roth IRA and 401k.
http://www.fool.com/news/commentary/2003/commentary030416.htm
In short,
1) Fill up your 401K to the amount that your employer matches (around 5%). then
2) Fill up your Roth IRA since it grows tax-free (which is better than tax-differed if you expect to be in a higher tax bracket when you start to withdraw from the Roth).
Roth IRA contribution limit for 2007 = $4000, then
3) If you still have money that you want for retirement, go back to filling your 401K.
Also take into consideration that you want to buy a house. Roth and 401k are investment vehicles for money you don’t want to touch until retirement.
There is the ability to take money out, but the point is to not touch it and let it grow with the tax shelter benefits.
