Investment Question

[bwdlionfan]

Not sports related but it seems we've had quite a few lately that weren't... and I need some help on this so here goes....

I'm 25 years old, recently quit my job and am about to start a new job next month. From my old job I have around $9,000 give or take in my 401K. Should I roll that in to my 401K at my new job, invest in an IRA (traditional or roth?), or do something else with it? I don't need the money so I'm not wanting to withdraw it and pay a huge penalty on it. I want to grow it for retirement, but at the same time I want something that's somewhat safe.

[PutMeInCoach]

I would go with a Roth IRA, but I'm not an investment expert.

[crzyjournalist03]

Originally posted by bwdlionfan
Not sports related but it seems we've had quite a few lately that weren't... and I need some help on this so here goes....

I'm 25 years old, recently quit my job and am about to start a new job next month. From my old job I have around $9,000 give or take in my 401K. Should I roll that in to my 401K at my new job, invest in an IRA (traditional or roth?), or do something else with it? I don't need the money so I'm not wanting to withdraw it and pay a huge penalty on it. I want to grow it for retirement, but at the same time I want something that's somewhat safe.

you're about the same age I am, and if I switch jobs, I plan on leaving it in a 401k. The market crash IMO is a good thing for people like you and I...we're getting in on almost a ground floor, so when the market turns up, the stocks and options will skyrocket in value compared to where they are now. We have the advantage of having a long time to wait before we cash out, and the market over the course of decades, has always gone up. For those who are close to retirement right now, this is the worst possible thing that could happen, but at the same time, it can really benefit young people who have 40-50 years to wait it out.

[BreckTxLonghorn]

Roll it into a Roth 401k if possible. If not, still roll it in. With the way the economy is, you'll be buying shares at a lower price than what it would be in an 'up' economy. It's more beneficial long term, especially when you're young.

Now if you were in Mid 40s, I'd say IRA. But that's just me.

[STANG RED]

There are lots of cheap stocks out there right now, that have a great chance of growing by huge margins within the next few years. I'd educate myself and take a real hard look at some of those if I were you. Your only 25, but this may be the only chance in your lifetime that you'll see anything like this again. I know if I were 25, with 9K to play with, I'd buy lots of cheap stock that is almost certain the reap lots of gains in a very short time. In about 5 or so years, I'd pull at least 1/2 out, and put into safer long term investments. But then, I'm a bit of a gambler myself.
Heck, 9K isnt really that much anyway, but it could be a nice stake to a future fortune, if you play your cards right.
Take the Wall Street Journal, and get yourself educated on investing. And sign up for Steve Sjuggerud's Daily Wealth daily email newsletter. Seriously, it's really worth taking a look at.

Let me say again. I am a bit of a gambler!!! So keep that in mind. But it has served me well. I just try to make smart bets.

[bwdlionfan]

Thanks everyone for the input. I'm pretty uneducated in this area. With Stang Red's talk of stocks I have a question.... does an IRA earn a percentage interest or is it a diversification in different stocks, bonds, etc?

[crabman]

If you really want to look into something interesting, look at a self directed IRA that allows investments in real estate. The only one I am aware of in Texas is Sterling Trust in Waco. You can take your IRA money and buy rental houses with it and get much, much better returns on your money than stocks or anything else out there. Take your $9,000 and use it as a down payment on a couple of $40,000 rent houses. Pay your taxes and insurance and make about $5,000 to $6,000 clear per year on your $9,000 investment TAX FREE !!!!! Take that money and do it some more. There are rules about third party management but you do it with a friend and manage his properties in exchange for him managing yours. There are books out there on Self Directed IRA's. No one will tell you about these but it is the only real way to get way way ahead with a little bit of money. I was going to do this with a friend right about the time I went into business for myself and I was not able to do it. I had a friend in Victoria that did it and he cannot say enough good things about it. PM me and I can give you his e-mail address if you want to check it out.

[rockdale80]

I recently picked up GM, Ford, Citi, and AIG at incredibly low prices. They have all made me money based on the initial purchase price but people still think I am crazy for doing it. I picked up 1000 shares of Ford at $1.10 a share and it is over $5 now. :D

As long as none of them tank/bankrupt I think I will end up making some coin on the deal. We shall see....

[STANG RED]

Originally posted by crabman
If you really want to look into something interesting, look at a self directed IRA that allows investments in real estate. The only one I am aware of in Texas is Sterling Trust in Waco. You can take your IRA money and buy rental houses with it and get much, much better returns on your money than stocks or anything else out there. Take your $9,000 and use it as a down payment on a couple of $40,000 rent houses. Pay your taxes and insurance and make about $5,000 to $6,000 clear per year on your $9,000 investment TAX FREE !!!!! Take that money and do it some more. There are rules about third party management but you do it with a friend and manage his properties in exchange for him managing yours. There are books out there on Self Directed IRA's. No one will tell you about these but it is the only real way to get way way ahead with a little bit of money. I was going to do this with a friend right about the time I went into business for myself and I was not able to do it. I had a friend in Victoria that did it and he cannot say enough good things about it. PM me and I can give you his e-mail address if you want to check it out.

I'm not saying your wrong by any means. But owning rental property, brings a whole host of problems and headaches with it. Dealing with tennants and maintenance issues can be extremely frustrating, expensive, and time consuming. But I agree, lots of money can be made doing it.

[jason]

i currently have 2 accounts that i play with - a traditional IRA and a TRS...

every month, a certain amount is automatically taken out of my check (pre-tax) and put into the TRS and that full amount will be matched when i decide to leave or roll it over....

in my ira, a certain amount is automatically withdrawn from my bank account every month, this is my 'play' account - i have it in mostly high risk stocks and one mutual fund, i too like to gamble, but with the way the market is now, i am really putting money in....


my latest purchase was AIG, i talked myself out of it when it was under a dollar but finally got it at $1.29....


being so young, you have a ton of choices - you can either be safe and go with strictly mutual funds, which are pretty safe, or go all in with high risk stocks, or you can split it up...

if you cant find the information you want here, i would go to a professional financial planner and have them explain all of your options to you...


btw my high risk stocks are aig, useg, zolt, and cype - the mutual fund is fniax....

[bwdlionfan]

I'm thinking I want to split it up. I know I don't have a lot to play with, but I think I have enough to play some... I'm thinking split it and go with some safer investments, but then also look in to some "penny stocks"

I'm still curious about this real estate thing as well though.

I've got a decent amount of money in the bank that I could put with this too, I'm just not so sure I wanna risk what I've got in the bank... I keep it in a money market that I can access whenever I want... but the money market rates suck.

[jason]

Originally posted by bwdlionfan
I'm thinking split it and go with some safer investments, but then also look in to some "penny stocks"
check out Century Petroleum (http://finance.yahoo.com/q?s=CYPE.OB) . The stock is fairly low right now but the long term estimate would pay off pretty big - we hope that it will eventually get to the $2 range which would make for big profits....

i have several thousand shares of this so i am hoping it gets up there around $2.....

[rockdale80]

Originally posted by bwdlionfan
I'm thinking I want to split it up. I know I don't have a lot to play with, but I think I have enough to play some... I'm thinking split it and go with some safer investments, but then also look in to some "penny stocks"

I'm still curious about this real estate thing as well though.

I've got a decent amount of money in the bank that I could put with this too, I'm just not so sure I wanna risk what I've got in the bank... I keep it in a money market that I can access whenever I want... but the money market rates suck.

Smart man. Keep between 5 and 10k in a money market just in case. Then invest, within reason, whatever you can spare after that.

[I. B. Watching]

roll it into the 401K if you can. When times are good, the company matches are really very hard to beat, and when times aren't so good, you're still not any worse off than you would be in a Roth

[BwdLion73]

crazyj03 and brecktx both gave you some of the best sound advice for your age.....

At my age I would go to the casino and give it a whirl!:thinking: 9 grand and let it ride;)