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amother


 

Post Mon, Mar 31 2014, 11:02 pm
We are married for 3.5 yrs and have not put away $ bec my husband doesnt know where to put the $. He diesnt just want to put it in a savings account bec we will end up accessing it when were running low. The question is- who guided you as to where or in what you should 'invest' your $ in so that you can eventually marry off your kids.
We always get offers for life insurance but its not a good investment- you ultimately dont earn much.
How do you know whom to tryst when it comes to investment reccomendations?
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amother


 

Post Mon, Mar 31 2014, 11:20 pm
Please don't invest in life insurance only buy term. I feel bad to do this to the brokers but I'm talking from experience. At the end of the day there is hardly or any returns. They try to talk you into payments that are higher than you can afford and if you can't keep it up you lost all the money you put in. Try to invest in real estate. People Always have to have where to live and rents keep getting higher
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naomi6




 
 
    
 

Post Mon, Mar 31 2014, 11:21 pm
Please don't invest in life insurance only buy term. I feel bad to do this to the brokers but I'm talking from experience. At the end of the day there is hardly or any returns. They try to talk you into payments that are higher than you can afford and if you can't keep it up you lost all the money you put in. Try to invest in real estate. People Always have to have where to live and rents keep getting higher
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amother


 

Post Tue, Apr 01 2014, 12:56 am
From experience, we invested in real estate long distance landlord and it flopped. We were married just a couple of years and lost 12,000. A TON of money for us at that time.
We haven't invested since we were so burnt. Recently we decided we MUST do something at least to be able to marry off our kids iyh. We bought a whole life insurance policy, according to the return in 10-12 years from now when we will start marrying off our children we should have enough to cover their weddings and still have coverage in case of death ch"v.
So we're clearly not the expert on investments. Just sharing what we did. I wish there would be some kind of investment guidance for young couples.
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amother


 

Post Tue, Apr 01 2014, 12:59 am
I wanted to add that since we are in the market to buy our own home in Brooklyn we need all the money we have, available in a short time. I wish we would've done some real investments when we were married 3 years... Now it's too late
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amother


 

Post Tue, Apr 01 2014, 1:47 am
We put spare money in various indexed funds. We put some in fixed funds to balance as well.
I've been depositing money in retirement funds - also indexed - for the last almost 30 years and b"h it has done well.
But if you go this route be prepared for ups and downs.
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happy_tobeme




 
 
    
 

Post Tue, Apr 01 2014, 4:08 pm
Buffet recommends investing in a very low-cost S&P 500 index fund, he specifically singles out using Vanguards index fund.
Also it's important to invest in fixed income, such as CDs or bonds to alleviate the risk. The exact proportion of stocks and fixed income should be determined based on your investment time frame and risk-level.

http://www.businessinsider.com.....014-3
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OOTforlife




 
 
    
 

Post Tue, Apr 01 2014, 4:34 pm
In my opinion you should build up an emergency fund of at least a few months' worth of expenses (ideally at least six months) before you invest in anything less liquid. The only exception would be if your employer matches 401k investments. Then invest just enough to get the match.
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happy_tobeme




 
 
    
 

Post Tue, Apr 01 2014, 4:36 pm
OOTforlife wrote:
In my opinion you should build up an emergency fund of at least a few months' worth of expenses (ideally at least six months) before you invest in anything less liquid. The only exception would be if your employer matches 401k investments. Then invest just enough to get the match.


I agree. Basic investment advice says to be debt free, and have a few months of an emergency fund before investing.
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amother


 

Post Tue, Apr 01 2014, 4:47 pm
naomi6 wrote:
Please don't invest in life insurance only buy term. I feel bad to do this to the brokers but I'm talking from experience. At the end of the day there is hardly or any returns. They try to talk you into payments that are higher than you can afford and if you can't keep it up you lost all the money you put in. Try to invest in real estate. People Always have to have where to live and rents keep getting higher

what is term life insurance?
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amother


 

Post Tue, Apr 01 2014, 4:48 pm
amother wrote:
We put spare money in various indexed funds. We put some in fixed funds to balance as well.
I've been depositing money in retirement funds - also indexed - for the last almost 30 years and b"h it has done well.
But if you go this route be prepared for ups and downs.

Can you explain what indexed and fixed funds are?
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amother


 

Post Tue, Apr 01 2014, 5:03 pm
We have money pulled out of our account monthly and put into very conservative mutual funds.
We have a different acount for each child plus 401 K savings and general account.
We plan on using our children's account for weddings\bar mitzva\support etc.

We do it monthly because this way as the market fluctuates we buy during highs and lows and hopefully at the end we will come out better.
I like that it is pulled out automatically, this way we know the money is going out and we cannot spend it.
We deal with someone who has been in the business for a long time, and is well known for what he does. He deals more with people like us, small investments and doesn't take risks.

We also have a savings account in a non-physical bank. They used to have great interest rates - not anymore. Because we don't really bank there we don't touch the money and it just sits. We transfer money there every so often.

We do own a few small cheap homes as an investment. the returns are sometimes nice and sometimes we come out in the negative. My DH has worked in real estate in the past and works near the homes so he does the management. if we had management fees on top of everything we would make almost nothing. It can sometimes take a lot of time especially if dealing with HUD or Section 8 and repairs can get very costly. A new roof or boiler can use almost the entire profit of the year or more. Also due to new federal regulations you can't really get a goo loan anymore for more then 5 homes, so after that you have to take private loans with much higher interest rates, so cashing out when refinancing isn't as lucrative. I would not recommend real estate unless you really look into it. I have a hard time believing a lot of the get rick quick ideas.
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amother


 

Post Tue, Apr 01 2014, 5:05 pm
I'm the amother above. We also have term life insurance.

We have 20 years term insurance, and restart every 5 years in case there will be any issues. This keeps our rates very low because we are young. We figure we only need it until our youngest turns 20, or is married.

both of us have insurance.
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cookiecutter




 
 
    
 

Post Tue, Apr 01 2014, 6:42 pm
amother wrote:
Can you explain what indexed and fixed funds are?
Index funds are funds that are based on an externally created "index" of individual stocks. The classic example is the Vanguard S&P index fund. When Buffett recommends index funds (I gather) he is saying you should invest in index funds as opposed to managed funds. The idea is that nobody can beat the market, so you shouldn't pay someone huge amounts of money to merely equal the market.

Not sure what that poster meant by "fixed funds" but she could possibly have meant bonds. Bonds are sometimes called "fixed return" because the payments don't fluctuate the way dividends on stock fluctuate; rather, bonds give X amount a year. The underlying value, though, fluctuates depending on bond prices and credit ratings. If you have a corporate bond from, say, Intel, and their rating goes down, your bond is worth less because it is paying 8% but the risk ought to make them pay 8.5. Or if interest rates go up across the board, the same is true - they are paying x above the no-risk rate, and the no-risk rate is now higher.

There is a bit of debate, though IMO there shouldn't be, whether it is possible to beat the market. But that debate is in the context of sophisticated investors with up to date knowledge and tools. For people who would articulate the question "where should I put my money", (and I am right there with OP), it is incredibly foolhardy to attempt to pick stocks. For us, the only reasonable path is to use index funds.
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Mrs Bissli




 
 
    
 

Post Tue, Apr 01 2014, 8:03 pm
Responding to OP's post, firstly, kol hakavod for aiming to have enough savings to marry off your children. As for finding where to invest, there are many books written in plain language about investing so find a book at the library and familiarize with terminology and concept.

Two key questions: how long are your investment horizon (ie how soon will you need the money) and what is your risk-return tolerance/appetite (high/medium/low)? Since you said you are married for 3.5 years, I assume you have 15yrs + to grow your money. The power of compounding interest is your friend. Also that means you can take a bit of risk/invest in something that has a bit of volatility.

As someone said, I also recommend tracker index fund. Generally equity market is considered to give a good mix of return/risk for a fairly long horizon. If you want higher risk/higher return you can consider adding a bit of small or medium cap funds. You won't need too much cash/money market funds or fixed income (ie bonds, treasury, savings bonds, muni bonds) UNLESS you think you may have to use the money in near-term (or need it for emergency purposes), esp as they normally offer high return. Make sure your returns are reinvested (most funds should offer that option). I said index/tracker/passive funds, simply because they're normally lower costs and there are less divergence among different funds. They invest in companies that make up stock market index so their return should be similar to overall market.

I'm very ambivalent about property investment. If you know your market and have expertise, not a bad idea though you do need to be more actively involved. And you need to think about what the realistic returns are in the neighbourhood. Of course you'll need to consider vacancy risk which cuts into your return.

Insurance is not really an investment. It is a protection. Though I won't completely dismiss life insurance in favour of term policy--try getting term policy when you're in mid-50s.
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amother


 

Post Wed, Apr 02 2014, 12:16 am
The Gemara says to put your money in three places. Try to get the right financial advice. Then we need Hazlacha.
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wife2




 
 
    
 

Post Wed, Apr 02 2014, 1:42 am
Vanguard's index fund is a great option as it has low costs in fees and is spreads your money into a little bit of everything (stocks, bonds) and varied across the market.

Another option to consider is a target-date fund. This basically mixes the amount of stocks and bonds you have as you get closer to the date that you will need your money by (your "target" date). For example, if you are 25 and don't need your money until you retire at 65, the first years of the fund will mostly be invested in stocks since you can risk some loss as you have time to build your money back up. As you gradually get closer to 65, the percentage changes to more bonds which is safer so you won't lost as much money in the ups and downs of the market since you won't have time to build your money up again. This is easier than constantly re-evaluating your investments every few year as it automatically rebalances your funds for you to meet your goals.
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amother


 

Post Wed, Apr 02 2014, 1:46 am
Quote:
He deals more with people like us, small investments and doesn't take risks.


can you advise who?

what is considered small investments

I have like $50,000 I want to invest - is that enough?
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amother


 

Post Wed, Apr 02 2014, 2:18 am
we keep our down payment savings in Barclay's- it's online and has one of the best interest rates in the country.

Investments are separate with a big firm, we have IRAs and SEP IRAS (for business owners), we do automatic withdrawals so we don't think about it.

Save for retirement using either Traditional IRAs, 401Ks, 403bs or Roth IRA-- you need a financial advisor to help you figure this out. Also makes a difference with taxes.

If you're going to save for kids' college then open college accounts, I think they're called 503b? It's very late so I might be mixing this up.

Get real professional advice. It is so important!!
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amother


 

Post Wed, Apr 02 2014, 3:40 am
amother wrote:
Can you explain what indexed and fixed funds are?

I am the amother who mentioned indexed funds and fixed funds. I am not a finance expert but this is what I meant:

Indexed funds were described well above. They are put together to mimic, for example, the S & P 500 Index - with a wide exposure. These traditionally go up over the long term but not necessarily and definitely not always. There is a risk to these investments.
By fixed funds I meant fixed income investments. They offer a pre-determined rate of return for a set period of time for example bonds, annuities, money market accounts, CDs. These return higher than your average savings account but are still considered safe.
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