How Can A New Income Investor Break Into Investing In Stocks And Bonds

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How Can A New Income Investor Break Into Investing In Stocks And Bonds

By : Richard Stooker 29 or more times read

Submitted 2010-08-25 16:09:29

When you're young and still inexperienced, you may wonder just how to break into investing in stocks and bonds to become an income investor.

The basic means of investing seems obvious after you've done it, but like so many things, is not obvious to newcomers. And our educational system is little or no help.

The Simplest Thing is an On the Job Retirement Account

The simplest way is to sign up for a retirement account where you work -- if one is available. If you can, contribute through a 401(k), 403(b) or Federal Thrift Savings Plan. These plans vary. For details of what's available to you, ask somebody on your job.

On Your Own, Open a Brokerage Account or Go With a Mutual Fund Family

If not, you are on your own. Your first basic choice is to open an account at a brokerage (recommend the better known deep discount online brokers such as Scottrade, E-Trade, Ameritrade and others). They will charge you a small commission to buy individual stocks and Exchange Traded Funds.

You can also open up an account with a mutual fund or family of mutual funds. The only one I really recommend is Vanguard, because they're the most truly investor-friendly. The others act and talk friendly, but they charge too much. Vanguard keeps its fees as low as possible.

You can open an IRA or Roth IRA with either brokerages or mutual funds.

You Can Buy Stocks Directly (and Cheaply) From Company DRIPs

You can also buy stocks directly from many companies, through their Dividend Re-Investment Plans (DRIPs). Here's a list:

wall-street.com/directlist.html

Those are your basic choices for stocks.

Bonds in general are not as easy.

Buy Government Bonds From the Government

You can buy United States government bonds directly from the United States Treasury at treasurydirect.gov .

You can buy individual municipal and corporate bonds from brokers, but this is both extremely expensive (they may claim to waive commissions, but that just means they're making a big profit from the sale) and risky (you could lose your money).

You buy municipal bonds through mutual funds devoted to them or through buying Exchange Traded Funds devoted to them (my suggestion).

You can buy individual corporate bonds through Direct Access Notes. Or by buying mutual funds or Exchange Traded Funds devoted to them.

Buy mutual funds directly from the mutual fund families. Buy Exchange Traded Funds through a broker.

Open a Money Market Fund for Short-Term Savings

It's also a good idea to have a money market fund. This is like a savings account that pays market rates of interest on very safe, short-term commercial loans. They're good for holding your money.

When you have a brokerage account, cash you receive from the dividends you receive from your stocks and Exchange Traded Funds will automatically be kept in a money market fund. You let it accumulate, along with new deposits, until you have enough to buy more shares.

Mutual fund families all have money market funds. I suggest checking out Vanguard's, because they're keep their expenses low.

The mechanics of investing are not hard once you get started.

Saving the Money to Invest is Harder Than Actually Investing

What's harder is getting your personal financial situation to the point where you can afford to invest.

What's even harder is recognizing that neither you nor anyone else can beat the market.

Your job as an intelligent income investor is to simply buy as many good income-producing investments as you can, reinvesting the income, and hold on until you retire.

Author Resource: You can build a permanent, income generating retirement portfolio. Click here to get the information you need to effectively make money from your investments whether the markets go up or down. If you're ready to discover how, as an income investor you too can retire with financial security, visit this page, enter your email address into the form and click on the Submit Button. Then go to your inbox and verify that. It's free for the taking. http://www.incomeinvesthome.com/.

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<!DOCTYPE HTML PUBLIC '-//W3C//DTD HTML 4.01 Transitional//EN' 'http://www.w3.org/TR/html4/loose.dtd'><html><head><title>Ad Free Articles | How Can A New Income Investor Break Into Investing In Stocks And Bonds</title></head><body><h3>How Can A New Income Investor Break Into Investing In Stocks And Bonds</h3> By: Richard Stooker When you're young and still inexperienced, you may wonder just how to break into investing in stocks and bonds to become an income investor. The basic means of investing seems obvious after you've done it, but like so many things, is not obvious to newcomers. And our educational system is little or no help. The Simplest Thing is an On the Job Retirement Account The simplest way is to sign up for a retirement account where you work -- if one is available. If you can, contribute through a 401(k), 403(b) or Federal Thrift Savings Plan. These plans vary. For details of what's available to you, ask somebody on your job. On Your Own, Open a Brokerage Account or Go With a Mutual Fund Family If not, you are on your own. Your first basic choice is to open an account at a brokerage (recommend the better known deep discount online brokers such as Scottrade, E-Trade, Ameritrade and others). They will charge you a small commission to buy individual stocks and Exchange Traded Funds. You can also open up an account with a mutual fund or family of mutual funds. The only one I really recommend is Vanguard, because they're the most truly investor-friendly. The others act and talk friendly, but they charge too much. Vanguard keeps its fees as low as possible. You can open an IRA or Roth IRA with either brokerages or mutual funds. <object width="640" height="385"><param name="movie" value="http://www.youtube.com/v/SpA-QcnpI5M?fs=1&hl=en_US"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/SpA-QcnpI5M?fs=1&hl=en_US" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="640" height="385"></embed></object> You Can Buy Stocks Directly (and Cheaply) From Company DRIPs You can also buy stocks directly from many companies, through their Dividend Re-Investment Plans (DRIPs). Here's a list: wall-street.com/directlist.html Those are your basic choices for stocks. Bonds in general are not as easy. Buy Government Bonds From the Government You can buy United States government bonds directly from the United States Treasury at treasurydirect.gov . You can buy individual municipal and corporate bonds from brokers, but this is both extremely expensive (they may claim to waive commissions, but that just means they're making a big profit from the sale) and risky (you could lose your money). You buy municipal bonds through mutual funds devoted to them or through buying Exchange Traded Funds devoted to them (my suggestion). You can buy individual corporate bonds through Direct Access Notes. Or by buying mutual funds or Exchange Traded Funds devoted to them. Buy mutual funds directly from the mutual fund families. Buy Exchange Traded Funds through a broker. Open a Money Market Fund for Short-Term Savings It's also a good idea to have a money market fund. This is like a savings account that pays market rates of interest on very safe, short-term commercial loans. They're good for holding your money. When you have a brokerage account, cash you receive from the dividends you receive from your stocks and Exchange Traded Funds will automatically be kept in a money market fund. You let it accumulate, along with new deposits, until you have enough to buy more shares. Mutual fund families all have money market funds. I suggest checking out Vanguard's, because they're keep their expenses low. The mechanics of investing are not hard once you get started. Saving the Money to Invest is Harder Than Actually Investing What's harder is getting your personal financial situation to the point where you can afford to invest. What's even harder is recognizing that neither you nor anyone else can beat the market. Your job as an intelligent income investor is to simply buy as many good income-producing investments as you can, reinvesting the income, and hold on until you retire. Author Resource:-> You can build a permanent, income generating retirement portfolio. Click here to get the information you need to effectively make money from your investments whether the markets go up or down. If you're ready to discover how, as an <a href="http://www.incomeinvesthome.com/free/">income investor</a> you too can retire with financial security, visit this page, enter your email address into the form and click on the Submit Button. Then go to your inbox and verify that. It's free for the taking. <a href="http://www.incomeinvesthome.com/">http://www.incomeinvesthome.com/</a>. Article From <a href='http://www.adfreearticles.com/'>Ad Free Articles</a> </body></html>

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