A Penny Saved

There has been a lot of talk lately about the stock market and the correction/crash that it’s currently experiencing.  I’ll be honest.  I just don’t care.

Why don’t I care?  I’m only 26.  I’m not invested heavily enough that the dividends from the stocks that I own make up any serious part of my income.  I contribute regularly to my 401(k).  That means that I can take any losses in value that may occur.  That also means that while everyone is worried about the drop in value for their stock, I’m rejoicing.  I’m buying stock at a discount!

History shows that the stock market will rebound from anything that gets thrown at it and will eventually be all that much better for it.  And in the immortal words of the Rolling Stones, “Tiiiiiiimmmmee… is on my side.  Yesss it isss!”  (just be glad you only had to read that and not listen to me sing it.)  I’ve got just under 40 years left before I really need to worry about what the stock market is doing.

Technorati Tags: invest, stock market, stock market correction, retirement, 401(k), retire, IRA

This post is the fifth in a series of 10 that covers each point of the MSN Money top 10 mistakes and hopefully will elaborate and add a little new parent thinking to the equation.

Money Mistake 5:

Forgetting whats most important: Retirement Savings

Once you’re faced with the monumental task of saving for your child’s college tuition, it’s easy to shrug off saving for retirement.

This is a mistake that I really could see myself slipping into. The reason for that is simple. My parents didn’t save for either, and as a result, I paid for my college education entirely. If it were not for my college loans, I would be in much more sound position financially. I do not want to do that to my children. It isn’t a fault of my parents, but I want to give my children the gift of a better financial situation when they finish school. So, yes, I can see myself saying to heck with the IRA and bring on the College savings account! Luckily, the easiest way around this is something that I already do. I participate in a employer sponsored 401(k) plan. My retirement money is on it’s way to my account before I even see it. That way it’s nearly impossible for me to redirect it into a college savings account. It is important that both parents have a retirement plan though, and my wife doesn’t have a plan that she contributes to at the moment. She can begin participating in her companies retirment plan next month!

Part 4: Delaying savings for college

Part 6: Postponing a Will

Technorati Tags: parent, money, mistakes, retirement, savings

Do you like the idea of buying and selling stocks? Can’t afford to meet the minimum starting funds for the traditional stock brokers? Well there are alternatives. They call themselves dollar based stock purchase brokers.

• No Account Minimums
• No Inactivity fees
• Invest any amount(minimum purchase applies)
• Only $4 a trade

• $6.99 a month
• 2 trades included
• No minimums($20 minimum stock purchase)

I have personally used BuyandHold before but ended up closing the account because I wasn’t making use of my 2 free trades each month and essentially turned the $6.99 a month fee into an inactivity fee. If I were to start again, I would most likely decide how much activity I was going to partake of and decide on that. Both have a limited number of stocks that you can choose from in comparison with a true broker, but you should find that most of your standard stocks and a many others will be available. At last count each had roughly 2000+ stocks available. Both give you the ability to buy a dollar amount in a company instead of a share in a company. So instead of buying 1 share of Google at $360, you can buy $20 for .056 shares of Google. It’s a good way to begin dabbling in the Stock market for the person who cannot afford the $1000+ startup cost that most common brokers require.

Technorati Tags: stocks, shares, buyandhold, sharebuilder, retire, save

Motley fool has an excellent post on the reasons that you should have an IRA.

What’s the No. 1 goal for investors? Retirement, according to most polls. Yet not every investor has an individual retirement arrangement (or account, depending on whom you ask) — better known as an IRA.

This is a travesty — a retirement-killing mistake. Every working American should have an IRA. Here are five reasons why.

I’ve shortened the descriptions out, but here are the 5 reasons:

1. How else will you retire?

2. Lower taxes, lower taxes, and lower taxes.

3. If you don’t put money in an IRA, you’ll spend it.

4. You want more control over your investments.

5. Favorable treatment for parents, debtors, and mortals.

A pretty good list.  Especially once you go and read the descriptions.  Essentially, it breaks down to not counting on a pension or social security to fund your retirement and taking advantage of the benefits of an IRA to save yourself money and keep that money nestled away for retirement.  IRA’s are an excellent retirement mechanism.  If you have the money to max our your IRA, you really should discuss doing so with your financial planner.