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Finance
Apr Member 2012

Finance

Posts: 56,428 Emerald Posts by user Forum Profile RuneMetrics Profile
bigpapa663 said :

@Finance, I have some spare money (few thousand), however I am not comfortable trying to start investing on my own. Is it worth getting a broker with this much or do I not have enough to afford one.
I don't really think brokers are ever worth the money. Fees and commissions have a major impact on long-term investment performance. In fact, a mutual fund's expense ratio is the single best predictor of its future return (more expensive funds perform more poorly). To see this with a simple mathematical example,

$3000 compounded at 7% annually over 40 years is worth $44,923.
$3000 compounded at 6% annually (say, after a 1% fee) over 40 years is worth just $30,857.

So the fee actually eats up 1/3 of your money over time.

Before you decide how to invest money, you need to decide what you want to do with that money. House down payment? School? Retirement? Buy a car? This will determine the level of risk you can take. You should only invest money in the stock market if you don't anticipate needing that money in the next 5 years.
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16-Dec-2016 05:11:33

bigpapa663

bigpapa663

Posts: 1,797 Mithril Posts by user Forum Profile RuneMetrics Profile
Finance said :

Before you decide how to invest money, you need to decide what you want to do with that money. House down payment? School? Retirement? Buy a car? This will determine the level of risk you can take. You should only invest money in the stock market if you don't anticipate needing that money in the next 5 years.

Thanks for all the information! It's amazing the kind of people you can meet in this game.

I plan to use the money to make more money and it truly is spare money as I don't need it urgently for anything. Thanks for the advice, a lot to consider.

16-Dec-2016 16:23:41

bigpapa663

bigpapa663

Posts: 1,797 Mithril Posts by user Forum Profile RuneMetrics Profile
Shiavui said :
I'm no expert, but I don't think it takes a lot of liquid to drown someone.

However, to play it safe, I'll pay as cheap as possible.

You're right. People have drowned in bowls of soup before from passing out and having their head land in the soup.

17-Dec-2016 17:01:24

Finance
Apr Member 2012

Finance

Posts: 56,428 Emerald Posts by user Forum Profile RuneMetrics Profile
bigpapa663 said :
I plan to use the money to make more money and it truly is spare money as I don't need it urgently for anything. Thanks for the advice, a lot to consider.
Look into buying low expense ratio, domestic and international stock index funds. The process for doing this depends on your home country (and there may be tax implications). Most major brokerage firms allow you to buy index ETFs for a nominal commission ($7-9) or even free.
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18-Dec-2016 19:23:02 - Last edited on 18-Dec-2016 19:23:51 by Finance

bigpapa663

bigpapa663

Posts: 1,797 Mithril Posts by user Forum Profile RuneMetrics Profile
Finance said :
bigpapa663 said :
I plan to use the money to make more money and it truly is spare money as I don't need it urgently for anything. Thanks for the advice, a lot to consider.
Look into buying low expense ratio, domestic and international stock index funds. The process for doing this depends on your home country (and there may be tax implications). Most major brokerage firms allow you to buy index ETFs for a nominal commission ($7-9) or even free.

Thanks, seems like a much safer option.

19-Dec-2016 19:36:09

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