dcsimg

Investing


  • Survey: 71% of Americans are Behind on Retirement Savings (11 comments)

    Knowing you aren’t saving enough for retirement isn’t a great feeling, but at least you are not alone. A full 71 percent of Americans say they are behind on their retirement savings and more than half, 54 percent, believe they will never pay off their debt fully, according to a new national survey commissioned by Experian together with Get Rich Slowly and other top U.S. personal finance blogs. Entering retirement with a large debt load…

  • How Can You Earn Residual Income Through Real Estate? [Sponsored Post] (2 comments)

    A notoriously lucrative asset class, real estate—both residential and commercial—has become one of the most popular ways to secure residual income. Traditionally, building a residual income stream through real estate has required a large, up-front investment of both time and money; but thanks to new investment vehicles, those interested in earning passive income through real estate have several options from which to choose. Different Ways to Build Residual Income through Real Estate New Technology Platforms…

  • Best Lower Risk Investments for the Average Saver (3 comments)

    Lower risk investments are becoming more popular now that interest rates seem fixed at historic lows. Remember the thrill of bringing your savings account book to the bank when you were a kid? They would stamp it and — ta-daaaa — you had more money than when you walked in. Fast forward to today. Most of us don’t get that giddy feeling after making a deposit with the so-low-it’s-not-even-worth-it interest earned on traditional bank deposit…

  • Retirement Strategies: How are you Doing? (20 comments)

    Ah, retirement strategies. Either a dream or a worry, but either way, you need them. Dreaming of retirement is part of the evolution of life. As a 20-something, you spend time envisioning the amazing career you’ll have and the important work you’ll do. As a 50-something, what you picture is a hammock, an ice-cold beer, and a good book. You picture retirement. For years, The Husband has laughed about the retirees who snag the earliest oil…

  • What the Brexit Vote Means for Your Wallet (11 comments)

    Brexit: A primer for Americans. Voters in Britain singlehandedly ignited an international crisis with their historic decision to leave the European Union last week. The British exit, or “Brexit” for short, continues to dominate the news, spawning talk of regret, a re-vote and recovery from what The New York Times described as a massive Brexit “hangover.” It’s easy to think the June 23rd vote won’t have an impact on family finances over on this side…

  • Our Journey to College…and Debt (23 comments)

    It was all over the news last week that the college Class of 2016 will graduate with an average — an average — of $37,000 in debt, the most ever. This is a 6 percent increase over the Class of 2015 (those lucky dogs graduated with an average loan debt of $35K). Experts say that if these kids’ starting salaries are more than their total debt, they should be able to pay them off in…

  • Is an Annuity a Good Investment? (17 comments)

    Is an annuity a good investment? This is a surprisingly hard question to answer. If you have ever met with a financial advisor about investments, chances are he or she may have proposed annuities as a good way for you to go. However, when you scan the blogosphere for posts about investing, you hardly ever read about annuities. You read about index funds, mutual funds, stocks and real estate and now and then about bonds…

  • 11 Things to Know about Bonds (18 comments)

    Bonds can be great low-risk investments but chances are you have never purchased a bond … and probably never will. Same with me. I simply don’t have the capital to commit over $100,000 to purchase the typical bond. But I do believe there are reasons to learn about bonds nonetheless, even if it’s an investment you don’t think you’ll ever make. Never say “never,” right? Well, the fact is… You may already be invested in…

  • How to Open a SEP-IRA (16 comments)

    Learning how to open a SEP-IRA, a self-employed individual retirement account, doesn’t have to be complicated. Here’s the experience of Lisa Aberle, a Get Rich Slowly contributor who had been working as an independent contractor since 2010, along with working a full-time job, and in 2014 left that full-time job. That meant she no longer had access to a company-sponsored retirement plan and had to figure out the remaining path to retirement as a sole…

  • How to Hire a Financial Planner (or Not) (61 comments)

    Millions rely on financial professionals to do their investing for them but not everyone knows how to hire a financial planner the right way — or when to say no to one. On the surface, the rationale for hiring a financial planner or advisor seems valid. People feel intimidated by the whole investing thing. It seems like a jungle out there and, to boot, most people know someone who lost it all with bad investments….

  • How to maximize returns while minimizing investment risk (7 comments)
    This article is by staff writer William Cowie.

    Back in 2005, someone wrote that Priceline.com would be a good stock in which to invest. At the time, I used Priceline because I traveled frequently. I also knew of Peter Lynch’s investing-for-success strategy, which boils down to buying stock in companies you do business with. I looked at the stock, which traded for around $20 to $25 at the time, thought about it … and…

  • Why Buying Individual Stocks is a Bad Idea (26 comments)

    Even if you’ve never made an overt decision to invest in the stock market, stocks form the foundation of your retirement investing. (At least if you’re like the vast majority of Americans, they do.) That’s because your 401(k) — or equivalent employer retirement plan — is only allowed to invest in mutual funds, and most mutual funds invest in the stock market. If you are investing through a Roth IRA account, though, you do have…

  • Why investing can be better than repaying debt (46 comments)
    This article is by staff writer William Cowie.

    It’s a difficult choice: On the one hand, you understand the need to begin investing early to make the miracle of compounding work for you; on the other hand, you know that, when you have debt, making those payments hampers the ability to harness the miracle of compounding. So, what should you do with that $500 you have — invest it or pay down the debt?…

  • Starting to Save for Retirement at 40 (27 comments)

    There’s something about reaching the big 4-0 that often causes you to re-evaluate your direction in life. And when you do, it’s hard to escape the fact that your day of retirement is indeed approaching faster than you ever thought possible. If you’re one of those who eliminated debt and made investing for retirement a habit since your 20s, there’s very little to do other than enjoy your 40th birthday and continue on with what…

  • Social investing in the wake of the Volkswagen scandal: Have your say (23 comments)
    This article is by staff writer Katie O’Connor.

    Caught red-handed On the off-chance you haven’t heard about it, Volkswagen, the German car maker, is in a world of trouble. The company was caught using software to game emissions testing, a flat-out cheating move that affects some 11 million vehicles. Not surprisingly, shares in Volkswagen tanked as soon as the news broke, down now by as much as 30 percent. Shareholders raced to clear their…

  • When investing in yourself is wise (38 comments)
    This article is by staff writer William Cowie.

    You’ve heard it before, many times probably: Investing in yourself is the best investment you can make. Really? How do we know that’s true? Google the term “investing in yourself” and you’ll find numerous references to things like explore your creative side, nurture your mind and body, sleep and relax, say no to others, do things you love. You get the picture. The term is commonly…

  • Why you should make a home your first investment (69 comments)
    This article is by staff writer William Cowie.

    Originally, this was to be a two-part series discussing the pros and cons of buying a home as opposed to investing. The purpose wasn’t to pick a winner or loser, per se. (After all, one of the main tenets of Get Rich Slowly is that you really should do what works for you.) Instead, the purpose was to highlight the strengths and weaknesses of both options…

  • How to Invest in Index Funds (8 comments)

    This is the third installment of a three-part series examining index funds. In Part I, we looked at the managed mutual fund market. In Part II, we looked at how an index is calculated and what an index fund is. In this installment, we’ll consider how to evaluate index funds and where to buy them. Despite the fact managed mutual funds still dominate the mutual fund landscape, there has been a steady migration of assets…

  • Should you buy a home or invest? (70 comments)
    This article is by staff writer Holly Johnson.

    The path toward retirement and financial independence usually involves buying a home and investing for retirement and the future. But, what if you had to choose? William Cowie posed this question to me recently and asked which path I would take to financial independence if given the option. My answer: I would invest for the future and forgo the house in a New York minute. Let’s…

  • What is an index fund exactly? (11 comments)
    This article is by staff writer William Cowie.

    [This is the second installment in a series examining index funds. In Part I, we looked at the managed mutual fund market. In this installment, we will look at how an index is calculated and what an index fund is. In Part III, we’ll consider how to evaluate index funds and where to buy them.] In the first part of this series, we saw that mutual…

  • Investing 101: A primer on mutual funds (7 comments)
    This article is by staff writer William Cowie.

    [This is the first installment in a series examining index funds. We’ll discuss the managed mutual fund market first to form a basis of comparison with index funds. In Part II, we will look at how an index is calculated and what an index fund is. In Part III, we’ll consider how to evaluate index funds and where to buy them.] We can’t predict the future…

  • Summertime reads: How to get cheap or free books (31 comments)
    This article is by staff writer Honey Smith.

    I have always been a big reader. Maybe it’s the fact that I’m introverted — so introverted, in fact, that I almost lost my fourth grade reading challenge. First, you had to go up to the teacher and tell her that you’d read something. Second, after you told her, she gave you a big sticker and you had to go up to your name on the…

  • Overcoming the fear of investing (28 comments)
    This article is by staff writer William Cowie.

    Investing is the most important element of our financial future — but sometimes it takes a while before we really get it, so to speak. Fortunately, I think it’s fair to say most of the readers here at Get Rich Slowly get it. But I’m willing to bet that there are still a few who might get the concept but have yet to put it into…

  • Your teen’s summer jobs could be their first million (24 comments)
    This article is by staff writer William Cowie.

    Few things are as much a part of growing up in America as getting a summer job. And here’s why most agree a summer job is a good thing to have as part of your coming of age: You get a good introduction to the rest of your life, which more likely than not will involve a job — working for someone else. You learn about…

  • What the Chinese stock market crash can teach you (9 comments)
    This article is by staff writer William Cowie.

    By some accounts, China’s stock market has been in free fall. In less than a month, the Shanghai Stock Exchange Composite Index (SSEC) — the Chinese equivalent of America’s S&P 500 stock index — saw a 30 percent drop in value. Media reports have ranged from indifference to breathless comparisons with the great stock market crash of 1929, followed by dire predictions for you and yours….

  • How to pick an index fund (12 comments)
    This article is by staff writer Ryan Takach.

    Stock-picking can be difficult, especially if you don’t have the ability to monitor the market and your investments consistently. Managed investments — such as mutual funds and exchange-traded funds (ETFs) — have become a popular choice because they provide exposure to a wide array of securities that would otherwise be out of reach for the average investor. So many reasons to love index funds The fund…

  • How to invest even if you’re treading water financially (27 comments)
    This article is by staff writer William Cowie.

    A 20-something acquaintance of ours recently received an inheritance of a few tens of thousands of dollars from an aunt unexpectedly. Naturally, all of us were very happy for her, and it wasn’t long before I asked what for me was the obvious question: “So, are you going to invest the money?” She looked at me as if I wanted her to bet on the frog…

  • How to profit from economic cycles (15 comments)
    This article is by staff writer William Cowie.

    (Since April is Financial Literacy Month, a number of articles will be devoted to more educational topics. This is Part IV in a four-part series about how understanding economic cycles could inform your financial decisions. Part I is Understanding economic cycles: An introduction. Part II is Recognizing economic seasons: recovery and growth. Part III is The fall and winter seasons of the economic cycle.) In the…

  • Understanding economic cycles: An introduction (13 comments)
    This article is by staff writer William Cowie.

    (Since April is Financial Literacy Month, a number of articles will be devoted to more educational topics. This is Part I in a four-part series about how understanding economic cycles could inform your financial decisions. Part II is Recognizing economic seasons: recovery and growth. Part III is The fall and winter seasons of the economic cycle. Part IV is How to profit from economic cycles.) Getting…

  • How to build wealth from scratch (39 comments)
    When you are living paycheck to paycheck, down on your luck, or living a student lifestyle, it can be difficult to imagine a world where you are suddenly building wealth. Take this comment from Kendra on one of our Ask the Readers posts, “What do you do when you’re broke?”

    “I feel like like Caleb a bit — in that most of these blogs don’t cover how to get started. I mean for a…

  • Ask the Readers: What rate of return are you seeking and how much risk will you accept? (20 comments)
    This article is by editor Linda Vergon.

    We spent a fair amount of time exploring investments in the month of March. We looked at how to ladder certificates of deposit (CDs), scrutinized the decision to include gold in your portfolio, and even considered the growth of hedge funds. Over the months and years, we have discussed rental properties, peer-to-peer lending and everyone’s favorite, the index fund. There are a lot of reasons to invest…

  • Why gold should be part of your investment portfolio (47 comments)
    This article is by staff writer William Cowie.

    [Editor’s note: This is Part II of a two-part series on whether it makes sense to include gold in your portfolio. Part I is “Should gold be part of my portfolio?“] This is the second installment of a two-part series about gold as an investment for your portfolio. The two posts may appear like a candidate’s debate or popularity contest, but they really aren’t. Our purpose…

  • Should gold be part of my portfolio? (35 comments)
    This article is by staff writer Robert Brokamp.

    [Editor’s note: This is Part I of a two-part series on whether it makes sense to include gold in your portfolio. Part II is “Why gold should be part of your investment portfolio.”] Humans have valued gold for several millennia, and that will likely continue. It is understandable, then, that a human such as yourself might consider trading some green for gold. I say, “Don’t bother,”…

  • The rise of alternative investments (25 comments)
    This article is by staff writer Financial Sam.

    Back during the dotcom collapse of 2000, I was losing money in the stock market like a champ. I was a second-year financial analyst who had a serious case of confusing brains with a bull market. When I turned to my VP and told him I was still bullish about the stock market, he almost slapped me upside the head. “We’re in a bear market, son….

  • How to Ladder CDs (24 comments)

    How to build a CD ladder? It’s a great question — unless you have no idea what a CD “ladder” even is. Let’s start at the beginning. A CD ladder is a method of staggering the maturity dates of certificates of deposits so you can invest your money safely and still keep some of it easily available for emergencies. The Federal Deposit Insurance Corporation (FDIC) insures certificates of deposit (or time deposits) just like they…

  • Hidden advantages of savings accounts (47 comments)
    Savings accounts? Are you crazy? Boo, hiss. These days, savings accounts are only used as joke fodder for late-night comedians, but there are benefits of a savings account. Take the mom who wants to teach her kids the value of prudent financial management, for example:

    For little Bobby’s eighth birthday, his mother takes him down to the local credit union to open a savings account. Figuring that all the grownups in his life would pour…

  • If the recession is over, where are the jobs? (29 comments)
    This article is by staff writer William Cowie.

    A few weeks ago, we asked the question “What is your investment strategy?” and described the survey Get Rich Slowly did of attitudes toward investing and a few related subjects. In that post, we noted, with a degree of surprise, that over 40 percent of respondents did not invest at all — and that the youngest respondents were the largest group of non-investors. What follows might…

  • What should your investment priorities be in 2015? (27 comments)
    This article is by staff writer William Cowie.

    I love snow — not the powder-lining you might long for on an overpriced ski slope, but the simple, white stuff that blankets the neighborhood. Our neighbors and friends all think I’m crazy, with the possible exception of the five or six families that happen to live on either side of us whose sidewalks get shoveled for no other reason than my exuberance for exercising out…

  • How to evaluate mutual funds to boost your returns (14 comments)
    This article is by staff writer Robert Brokamp.

    I’m a bit of a nut about Christmas; I even have a daughter named Noelle. So this time of year can be a bit of downer for me. The tree gets disassembled, the Bing Crosby CDs get packed away, and the holiday cards stop coming. Regarding that last one, however, the void in my mailbox will soon be filled by a different type of tiding —…

  • 30 Days to Better Finances (23 comments)

    Learning to manage your finances isn’t something most people would put at the very top of their “most fun thing to do” list, but we all know that we ignore money and budgets at our peril. Having a strong handle on what money is going in and what money is going out is an essential first step. But you don’t have to be overwhelmed. By setting aside between five and 30 minutes each day, you…

  • Heed the Ghost of Yourself Yet to Come (28 comments)
    This article is by staff writer Robert Brokamp.

    Back in July of 2013, I decided to move on from the turtle-logoed pages of Get Rich Slowly in order to devote more time to other professional and familial responsibilities. However, a few months ago I managed to find time to once again join this merry band of bloggers, which gives me the opportunity to pass along the results of a survey I included in my “farewell”…

  • Are you holding yourself back with these money lies? (35 comments)

    This article is by Suba Iyer, who currently writes for FiveCentNickel.com. In 2009, I was all excited to start looking for a house to buy. I had been working in a well-paying job for almost five years at that point and I figured I shouldn’t be throwing money down the drain renting. Well, reality came crashing down when I finally looked at my savings. It wasn’t even enough to be a good emergency fund, let alone a down payment….

  • Tips for the First-time Investor (43 comments)

    In a recent post regarding the survey of how people invest, the most glaring observation was that over 70 percent of respondents who have yet to experience a recession do not invest at all — not even a tentative first-time investor — nothing. Since the survey didn’t record the ages of respondents, it is fair to conclude that those who had not yet experienced a recession would be aged in their mid-20s. Why doesn’t this group…

  • Women, insecurity and money: Overcoming the confidence gap (48 comments)
    This article is by staff writer Kristin Wong.

    For the past two years, the topic of women and money has come up in my life quite a bit. I’m guessing it has something to do with the fact that I’m a woman who writes about money. But as a woman who writes about personal finance, I feel have given the topic less attention than it deserves — not just in my writing, but in…

  • What is your investment strategy? (64 comments)
    This article is by staff writer William Cowie.

    Get Rich Slowly conducted an online survey of about 2,000 randomly selected individuals on the subject of investing recently, and I found the insights from the results quite interesting. Some of the highlights of the findings of the survey are: 1. Over 40 percent of all respondents do not invest at all at the present moment. 2. Despite investing being more advantageous to the young, the…

  • Indexing vs. stock-picking: You don’t have to choose sides (18 comments)
    This article is by staff writer Robert Brokamp.

    A discussion about personal finances can be a polite, congenial affair. Few people come to blows over insurance or budgeting. But some topics inflame financial passions, and one of them is investing. Fellow GRS e-scribe William Cowie encountered this a couple weeks ago when he advocated for investing in individual stocks in certain situations. I thought I would pass along a few thoughts of my own, given…

  • Should you consider ETFs for your portfolio? (14 comments)
    This article is by staff writer William Cowie.

    Exchange-traded funds (commonly known as ETFs) are a relative newcomer to the American investment scene, having been approved to be publicly traded by the New York Stock Exchange just over 20 years ago. However, in that time, they have managed to capture about $1.7 trillion in investor money. Why are they so popular, and should you consider investing in them? Over the past 40 years we…

  • Average 401(k) Balance by Age (44 comments)

    Saving for retirement isn’t easy, but 401(k) accounts are a universally popular way to save thanks to hands-off investing features and contributions drawn directly from your paycheck. But how do you know if you’ve saved enough? How is your retirement savings plan shaping up against people your same age? Here’s the data: Average 401(k) balance up to age 25: $4,048 Median: $1,385 Average 401(k) balance ages 25-34: $22,187 Median: $8,363 Average 401(k) balance ages 35-44: $60,528 Median: $23,944 Average…

  • Investing: Two ways to beat average returns (61 comments)

    This article is by staff writer William Cowie. If you are serious about your financial future, you’ve got to be serious about investing. Enough has been said about that, so I won’t belabor the point. But here’s a financial maxim that can’t be said enough… Financial success comes from doggedly investing over a long period of time and finding ways to: minimize risk so as not to lose what you have maximize earnings so as…

  • 9 reasons you may never retire (45 comments)

    This article is by staff writer William Cowie. My mom passed away a little less than a year ago. All her life she was the picture of health: She walked every day and ate super-healthy. The extended family dreaded going there, because they knew there would be no sugary goodies, only healthy (boring) eats. We used to joke and say she was so healthy they’d have to shoot her on the Day of Judgment ……

  • Reader Stories: Can you really get rich quickly from fix and flipping homes? (46 comments)

    Some reader stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income. Want to submit your own reader story? Mark Ferguson has been a Realtor since 2001 after graduating from the University of Colorado with a business finance degree. He runs a real estate team of 10 that sells over 200 homes a year, fix and…

  • I was intimidated by investing, but here’s how I got started (33 comments)

    This article is by staff writer Kristin Wong. The first time I felt the intimidating pressure of adult responsibility, I was three months out of college. It was my very first job interview, and I was wearing an old sweater and a pair of ill-fitted slacks, sweating. My would-be boss, the man sitting across from me, was only five or six years older than I was, which made me even more nervous. I’d never met…

  • Buying rental property: Sometimes getting rich means taking it slowly (52 comments)

    This article is by staff writer Holly Johnson. I have two second cousins who serve in the military — both brave young men I am proud to call my family. We don’t always talk much, though. The age gap can be a roadblock and those boys are always traveling around, serving overseas and living on bases in order to fulfill their military duties and finish school. Still, social media makes it easier than it used…

  • You can learn how to make money investing: Just do it! (40 comments)

    This article is by staff writer William Cowie. Several readers responded to our “Big Question” post by saying they’d like to see something about investing, and some elaborated that they’d like to see some advice for investing on a small scale. Small in scale obviously means different things to different people — but I’ll relate my experiences, for what it’s worth. My background is in finance and accounting. You’d think having 10 years of college, focusing…

  • What to do during the “What’s Next?” stage of finance (43 comments)

    This article is by staff writer Kristin Wong. When I first started writing for Get Rich Slowly, I’d just become interested in my finances. While I’ve always been frugal, I started to realize there was much more to personal finance than finding ways to save money. Here’s where I was, financially, at that time: I was rebuilding my recently depleted emergency fund. I had just started to earn more. I was working hard for my money,…

  • Act surprised: Your wedding ring is a terrible investment (101 comments)

    This article is by staff writer Holly Johnson. Divorce. It’s an unattractive yet common end to a relatively high percentage of marriages in the U.S. In fact, as many as 50 percent of American marriages end this way, often leaving catastrophic personal and financial consequences that linger for years. The division of assets. Alimony. Child Custody Issues. Who gets the Stuff? These are all things that must be dealt with during and after a divorce, whether…

  • The pursuit of passive income: Is it time to become a landlord? (63 comments)
    This article is by staff writer Holly Johnson.

    If you visit personal finance or investing blogs on a regular basis, you’ve probably read countless articles on the virtues of passive income. After all, many personal finance experts believe that passive income is the key to early retirement, financial independence, and permanent wealth. But, what is it exactly? A definition: Investopedia describes passive income as “earnings an individual derives from a rental property, limited partnership or…

  • The new way to get rich slowly (84 comments)

    This article is by staff writer William Cowie. The face of getting rich slowly is changing right before our eyes, even as the status quo is failing. Before this year’s State of the Union address, the President’s media supporters, fretting about his low approval rating, fumed: “…never during his time in office has the state of the economy been better — yet rarely has he gotten such low marks from the public for his handling of it.”…

  • Best CD Rates | Certificate of Deposit Rates (34 comments)

    Identifying the best CD rates It is important to think through how best to use a certificate of deposit in your overall financial plan, but it starts with understanding your goals and how a CD can help you reach them. Interest rates change constantly, so having up-to-date rate information is critical to identifying the best CD rates and terms to make the most of your investment. We have made the whole process easier in a…

  • Reader Stories: The Notebook (Part 2) (23 comments)

    Jim, a reader of our Facebook page, shared some of his personal finance journey in Facebook comments a while back. We reached out and asked him if he would elaborate so we could share his story with the Get Rich Slowly website readers. This is Part 2. Some reader stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial…

  • What Are Dividend Reinvestment Plans? (28 comments)

    In my previous post, I listed three things you need to start investing. Number three was opportunities. Sometimes those opportunities are unique, one-off types of things; however, they can just as easily be something that’s always been out there but you just weren’t aware of them because you weren’t paying attention to investing. Let’s explore one of those little-known opportunities — one that’s legit, good, and yet often overlooked because it’s a little, well, boring. It’s…

  • Professional investment advice (and why you should ignore it) (77 comments)

    This article is from J.D. Roth, who founded Get Rich Slowly in 2006. J.D. recently appeared on the Microblogger podcast, where he talked about taking control of his financial life, moving from debt to wealth. In January, I accompanied Kim to an appointment with Paul, her investment adviser from Edward Jones. Paul’s brother was my best friend in grade school and junior high, and we have many mutual friends. I sat and listened while Kim…

  • How to get started investing (33 comments)

    This article is by staff writer William Cowie. Confession time: Despite a financial and business education more comprehensive than most, I never invested. I grew up poor and just couldn’t wait for my first “serious” job and those big bucks. It was so bad, I decided to drop out of college in my senior year. “None of this ivory-tower crap is going to make me any more money,” I told everyone who would listen. Fortunately,…

  • The opportunity fund: How to be prepared for lucky breaks (32 comments)

    Note: This article is from J.D. Roth, who founded Get Rich Slowly in 2006. J.D.’s non-financial writing can be found at More Than Money, where he recently wrote about how to retire early. The first step on the road to financial freedom is to eliminate debt. The second is to save for emergencies. Your emergency fund acts as self-insurance, cushioning you from small disasters. Life is full of unexpected surprises, many of which cost money…

  • Investing Ideas that Avoid the Stock Market (37 comments)

    Investing requires resolve and a long-term vision, but it doesn’t actually have to involve the stock market. Here’s a guide to non-stock investing options: Precious metals During the Great Recession, precious metal commodities like gold and silver were all the rage. As the stock market lost more than 50 percent of its value, gold and silver started a monumental rise in price. Gold went from around $600 per ounce in 2007 to peak at $1,900…

  • Too much emergency fund? Spend it! (79 comments)

    How big is your emergency fund and when should you spend it? Growing up, I learned all kinds of money lessons from my mother. An avid saver, she socked away every cent that she possibly could. She cut coupons, shopped at garage sales, and drove cars without heat or air conditioning. She even paid for our family piano with money she got from refunding (people often earned extra money sending in for small rebates in…

  • How to Handle a Windfall (29 comments)

    When my father died in 1995, he left behind a small life insurance policy that awarded each family member $5,000. It wasn’t much, but it was the best he could do based on the fact that he had cancer. He hadn’t been much of a planner, and hadn’t been good with money, so that $5,000 per person was actually a significant amount. At the time, I was deep in debt. I had over $20,000 in…

  • The Sheep and the Wolves: Smart investing made simple (36 comments)

    Note: This article is from J.D. Roth, who founded Get Rich Slowly in 2006. J.D.’s non-financial writing can be found at More Than Money, where he recently wrote about winning the jackpot. Imagine that you’re a farmer. You live in a rural county where everybody raises sheep. The county’s farmers, on the whole, prosper. Their flocks tend to grow by 10 percent every year. Some years are better than others. In the best years, the…

  • How I kept saving even during a job loss (57 comments)

    This article is by staff writer Kristin Wong. A few months ago, I wrote about a job loss. It was a first for me. To recap, a high-paying client let go of the majority of their freelancers, which included me. I felt rejected, but I quickly came to terms with it: It’s business. However, since I’d been focusing 90 percent of my work life on this client for the past couple years, I consequently lost…

  • What is market timing, and should you do it? (20 comments)

    This article is by staff writer William Cowie. In my previous post, a few commenters brought up the issue of market timing, generally taking me to task for appearing to advocate it. Market timing is a topic of much discussion, primarily in the world of stock investing. With this post, I hope to explain the issue and show how it applies to you, even if you never invest in a stock or mutual fund. What is…

  • The one-page guide to financial freedom (74 comments)

    This year, I learned a lot about money. I think the biggest breakthrough I had in 2013 was to connect the ideas of personal and financial freedom. I spent a week in Ecuador talking with folks about this subject, and then I spent a couple of months putting my thoughts onto paper. I’ve done a lot of writing and thinking and speaking on this topic. But you know what? I’ve come to realize that the…

  • Understanding the IPO process (17 comments)

    This article is by staff writer Sam. Sam spent 13 years working in Equities on Wall Street and discusses financial independence strategies on Financial Samurai. Sam is also the founder of the Yakezie Network, the largest personal finance blog network on the web. So you missed out on Twitter’s meteoric first-day rise because the stock gapped up to $45 from the initial public offering price of $26 and you couldn’t get in. With a market…

  • What are savings for? (62 comments)

    Note: This article is from J.D. Roth, who founded Get Rich Slowly in 2006. J.D.’s non-financial writing can be found at More Than Money. Last week, I wrote about a conversation with my investment adviser. In the article, I mentioned that my current income roughly covers my current spending except that I’ve been spending an average of $2,000 per month on travel. Because of that spending deficit, I’ve been drawing down my medium-term savings, which…

  • A Meeting With My Financial Adviser (90 comments)

    Note: This article is from J.D. Roth, who founded Get Rich Slowly in 2006. J.D.’s non-financial writing can be found at More Than Money. Once every six months, whether I need to or not, I meet with my investment adviser from Fidelity. I’ve been doing this for five years, and have come to value the experience as truly educational. On Tuesday, for instance, my new adviser Michael talked me through some income planning. My financial…

  • A primer on the most important economic metric (63 comments)

    This is a guest post (Part I in a three-part series) by Sam, author of Financial Samurai, “How to Engineer Your Layoff,” and founder of the Yakezie Network. Part II is A primer on the most important economic metric (Part II) and Part III is A primer on the most important economic metric (Part III). Finance and investing don’t have to be complicated. Consistently buying low and selling high can make you rich beyond your wildest…

  • How to avoid hiring a shady financial adviser (25 comments)

    This article is by staff writer Jeff Rose, CFP. How would you feel if the financial adviser you hired to take care of your investments had four previous instances of customers filing a complaint against them? What if they had been fired from two previous financial institutions? Hopefully it would give you the same sick feeling it gives me. How would you feel if you learned that you could have discovered all of this if…

  • Thoughts on Financial and Personal Independence (88 comments)

    Note: This article is from J.D. Roth, who founded Get Rich Slowly in 2006. After a year off, J.D. is once again writing here at GRS. His non-financial writing can still be found at More Than Money. ¡Saludos de Ecuador! For the past two weeks, I’ve been enjoying my third trip to that seldom-remembered continent, South America. I love this place, and love it more each time I visit. My past trips have been personal…

  • Top 10 High Interest CDs that can double your interest income (15 comments)

    This guest post is by Richard Barrington, CFA, senior financial analyst for MoneyRates.com. The latest cruel trick played on savers is that while mortgage rates have started to rise, bank deposit rates haven’t budged. If you want higher interest rates on your deposits, you’re going to have to do something about it yourself. According to the FDIC, five-year CD rates (certificates of deposit or CDs) are currently averaging just 0.75 percent nationally. Fortunately though, not…

  • 7 Rules for Growing Slow (But Sustainable) Wealth (31 comments)

    You can grow — and sustain — wealth if you have nothing right now. Many will argue that fortunes can be made overnight; while that may hold very true in some cases, the majority of those who have made it will tell you it did indeed take a great deal of time coupled with some correct financial choices. For me, wealth did not come solely from entrepreneurship or financial risk, but rather it came as…

  • Confessions of a former online trading broker (50 comments)

    This is a guest post from John S. John is the founder of Frugal Rules, a dad, a husband and a veteran of the financial services industry. He’s passionate about helping people learn from his mistakes so that they can enjoy the freedom that comes from living frugally. Follow him on Twitter. Learn investment lessons during his years working as an online trading broker. For four and a half years I dragged myself dutifully to…

  • Book Review: ‘The Smartest Investment Book You’ll Ever Read’ (18 comments)

    This post is by staff writer Honey Smith. There are many personal finance books out there, useful to people in all stages of personal finance. I have a lot to learn before reaching financial independence, and the editorial elves thought it would be useful if I shared some of what I learn with you. My recent reviews include “More Money, Please: The Financial Secrets You Never Learned in School” and “The Money Book for the…

  • Reader Story: I bought a foreclosure house on the courthouse steps (77 comments)

    This guest post is from Naomi Mannino. Naomi is a freelance consumer personal finance and health journalist who reports on health, medical and personal finance news and how it will affect your life today. You can follow Naomi on Twitter @naomimannino. Some reader stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income. Want to submit your…

  • Easy ways to give your 401(k) a tune-up (34 comments)

    This is a guest post from Jeff Rose, CFP. Jeff is well known among bloggers for his various causes: The Debt Movement, The Roth IRA Movement and The Life Insurance Movement. He also blogs at Goodfinancialcents.com. As it stands right now, there is just over $4 trillion in 401(k) plans. That’s trillion with a capital “T.” If you’re working for a company, then you’re probably one of the 67 million Americans who have a 401(k). It was included as…

  • Farewell, Get Rich Slowly — and why bother getting rich anyway (51 comments)

    This is the final post from staff writer Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool’s Rule Your Retirement service. It is with heavy heart and overflowing to-do list that I have decided to hang up my Get Rich Slowly writing boots. An expanded role at The Motley Fool (my home planet) and the growing responsibilities of growing kids have led me to make…

  • Five factors for your asset allocation (16 comments)

    This is a post from staff writer Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool’s Rule Your Retirement service. When you think of your portfolio, visions of stocks, bonds and cash likely dance in your head. Generally, the mix of those investments is based on some measure of risk tolerance, with a little bit of time horizon calculation thrown in, and — voila! — you have yourself…

  • SEP IRA vs. Self-Employed 401(k) (46 comments)

    A couple of months have passed since my 30th birthday, and that means getting started on some of my money resolutions for the year. One of those resolutions was choosing an additional savings plan for retirement. Currently, I have an IRA that I’m planning on — and getting close to — maxing out for the year. Last time I wrote about my financial goals, I planned to save more for retirement by opening a self-employed 401(k)….

  • Where to put your next investment (16 comments)

    This is a post from staff writer Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool’s Rule Your Retirement service. Let’s say you’ve decided to add a new investment or two to your portfolio — maybe a stock, maybe a bond, maybe a mutual fund that invests in either or both. But now you’re confronted with another decision: In which account should you buy them?…

  • Coverdell Savings Account: Definition, Pros and Cons (39 comments)

    A Coverdell savings account, or a Coverdell Education Savings Account (ESA), is an investment account that is tax-free when used for qualified higher-education expenses. Assets in Coverdell accounts can be transferred to other family members if the beneficiary doesn’t need the money (whether because of scholarships or other circumstances) and many find the main benefit is that these funds can also be used for K-12 school-related expenses. The biggest drawback is that you cannot contribute…

  • Understanding fundamental and technical analysis (11 comments)

    This guest post is by GRS reader Russell Kith, an avid value investor, fan of Warren Buffett and personal finance blogger. You can find more of his articles on investing on his blog, Money Street Smart. Investing is a lot like going to college. You start off with a broad range of general options (mutual funds or classes), then once you have a solid foundation, you learn the value of specificity (investing in stocks or…

  • Invest like Warren Buffett… but not really (35 comments)

    This is a post from staff writer Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool’s Rule Your Retirement service. If you want people to read your investing-related post or book, you’ll increase your chances by mentioning Warren Buffett in your title. After all, I just did it — and it might be why you chose to read this. Every financial media company does it, including…

  • How to audit your own investments (23 comments)

    This post is from staff writer Lisa Aberle. I’ve hinted before that I was a passive investor. And by passive, I mean that I have always set up a 401(k) and IRAs, then promptly ignored them. But since 2013 is the year I want to learn more about investing, I knew I needed to evaluate our current investment portfolio. Am I saving enough for retirement? Am I diversified? Is the risk of my investments appropriate for my…

  • Are There any Safe Investments? (43 comments)

    Do safe investments exist? The short answer is no because every investment involves some level of risk, which means it can lose value. But the relative risk of investments varies widely. Some investments are inherently more risky than others, like betting an individual stock on a certain day will go up or down — risky. Compare that to FDIC-insured (and NCUA-insured, the National Credit Union Administration) deposit accounts like money-market accounts, savings accounts and certificates of deposit….

  • Invest in this: How I pick stocks (34 comments)

    This post is from staff writer Sarah Gilbert. I’ve been doing what I call “investment banking” for a friend’s company (I say it that way because the work I do is almost definitely not what you probably think of when you hear the term), and I get this question almost every day: “So, I guess you know a lot about investing!” Well, I know more than perhaps most people about investing. But, again, it’s not…

  • The stock market has recovered, but have you? (27 comments)

    This is a post from staff writer Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool’s Rule Your Retirement service. The financial media world is all abuzz with U.S. stocks — as measured by the Standard & Poor’s 500 — surpassing where they were in October of 2007, right before the Great Recession and a more-than-50 percent plunge. It took more than five years, but…

  • Reader Stories: I bought a duplex to save money on rent (36 comments)

    This story is from Karl Boericke. He is the author of The Frugal Berry, money-saving tips of all kinds for home, office, and small business. In 1990, I was honorably discharged from the Navy and quickly found a job in an electronics manufacturing company as a technician in their test department. While renting an apartment at the time, I wondered how I would ever be able to afford to buy a house with my meager…

  • Investing in your investing education: A resource list (23 comments)

    This post is from staff writer Lisa Aberle. Investing isn’t new to me. I opened my first CD in high school back in the good old days of 5 percent interest, and I started contributing to my 401(k) as soon as I was eligible (at age 21). I did everything right according to the articles I read. I: Contributed enough to get the maximum employer match Saved/invested around 10 percent of my income Opened up…

  • The most powerful ways to secure your retirement (34 comments)

    This is a post from staff writer Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool’s Rule Your Retirement service. Whether you can retire, and whether your money will last after you retire, starts with a very simple maxim: spend less than you have. However, once you start actually crunching some numbers, you find that the equation of retirement is actually quite complicated, with many…

  • How to Save and Invest Money (70 comments)

    When we decided that we were going to start investing more in 2013, I didn’t know where we would find the money in our budget. My personality embraces risk… as long as all our other savings goals are met and our bills are paid. So, because I wanted to have fun investing (and not lose sleep at night), I knew I could not cut our retirement contributions or our savings deposits. What I hoped was…

  • Evaluating Financial Advisors (70 comments)

    Hiring a financial advisor is difficult. Common questions include: How much do financial advisors make? How much of that is my hard-earned money? What’s a reasonable fee? Way back in the ’90s — a primitive time when a mobile phone could only be used to talk to another phone — I was a broker (i.e., salesman) with Prudential Securities. While we all used the title “financial advisor,” the majority of efforts were spent providing investment…

  • Reader Story: Dividends or bust: Thinking critically about investment (53 comments)

    This is shared by Steven Hogan (Twitter @stevehlaw), who has learned a few things about investing that he wanted to share. This story is part of our Reader Stories series. Some stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income. Want submit your own reader story? Here’s how. The back story When I was 18,…

  • Fear of investing: Divide(nd) and conquer! (68 comments)

    I’ve read hundreds of books, articles, and blog posts about money. I save. I like to pay cash. I avoid consumer debt. I know how to make more money. Sounds good, right? Well, I have a skeleton in my closet: I am afraid of investing. And 2013 is my year to conquer it (or at least subdue it a little). At first glance, you may not believe me. After all, I started contributing to a…

  • A few things to consider before becoming an expatriate (23 comments)

    This post is from Justin Boyle. Justin is an experienced English tutor and writing coach who works as a designer in the tech industry. He lives in Austin, Texas, and finds a lot of things interesting, especially food, finance, education, gadgetry, software, art and travel. He never stops thinking about food. He is probably eating right now. There are plenty of possible reasons you could want to leave the U.S. Perhaps you’ve always dreamed about making the sand…

  • Is investing optional? (101 comments)

    This guest post from William Cowie. William has contributed to ConsumerismCommentary.com, BudgetsAreSexy.com and other personal finance blogs, including his own, . We’ve all seen this bumper sticker, haven’t we? Other than singing the Disney song from “Snow White,” how does it make you feel? “Wouldn’t it be great if I didn’t HAVE to…?” And isn’t that most people’s fantasy: not having to go to work? Other than most fantasies, this one is actually achievable. How?…

  • Being a landlord: Is it worth it? (145 comments)

    This is a guest post from Holly Johnson. Holly is a 32-year-old wife, mother of two, and frugal lifestyle enthusiast. She blogs about saving money, frugal habits, and whatever is on her mind at ClubThrifty.com. In 2006, my husband and I bought our first rental property. We put 10 percent down ($8,500) on a small brick ranch in the same Midwestern community that we call home. I had gotten my real estate license several years…

  • Reader Story: From recession to best financial shape of my life (53 comments)

    This guest post from William Cowie is part of the “reader stories” feature at Get Rich Slowly. William has contributed to ConsumerismCommentary.com, BudgetsAreSexy.com and other personal finance blogs. Some reader stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income. Want submit your own reader story? Here’s how. Fresh out of college in South Africa in…

  • Get Free Financial Planning Help (10 comments)

    I’ve been working with a fee-only financial advisor recently to be sure all my eggs are in the right nests for my future. I’ve been impressed with her knowledge of law, taxes, insurance, investing — all aspects of financial life. While I’ve covered personal finance topics as a journalist for more than 20 years, I haven’t been so diligent about managing my own affairs. Yes, I’ve been saving for retirement all along, but I’ve been…

  • How to Pick the Best Darned Account for You (9 comments)

    This is a post from staff writer Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool’s Rule Your Retirement service. He contributes one new article to Get Rich Slowly every two weeks. Happy World Wide Invest Better Day! What, you’re not familiar with this holiday? Well, it might because we at The Motley Fool invented it, and today is the first time we’re going to…

  • Is Your Money in the Right Place? (51 comments)

    This is a post from staff writer Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool’s Rule Your Retirement service. He contributes one new article to Get Rich Slowly every two weeks, and likes carrots. When it comes to investing, you have two big decisions to make: What to buy, and where to buy it. As for the former, you have all kinds of choices:…

  • How to Invest Using Direct Stock Purchase Plans (52 comments)

    So you want to buy stocks? Maybe you’re interesting in investing in direct stock purchase plans? Great! But you only have a small amount of money each month to invest? You’re worried about any potential returns being wiped out in the beginning by brokerage fees? You’re wise to worry. Invest $100 bucks per month with a discount broker and you’re lucky if you pay commissions equal to seven percent of your investment. Seven percent! That’s a…

  • What is a Roth IRA? A Short and Simple Guide (85 comments)

    Note: This post is part of the Roth IRA Movement event organized by Jeff Rose at Good Financial Cents. Today, dozens of financial bloggers are posting articles about Roth IRAs. This is mine. Most of us know we should save for retirement, but sometimes it’s tough to get started. If your employer sponsors a retirement plan — especially if it offers a generous match to your contributions — that’s usually the best place to begin….

  • Four Reasons to Invest Internationally (40 comments)

    This is a post from staff writer Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool’s Rule Your Retirement service. He contributes one new article to Get Rich Slowly every two weeks. Chances are, right now you are surrounded by things that were invented, assembled, or grown outside the United States. We’ve become very accustomed to buying goods from other countries. There’s no reason why…

  • Ask the Readers: How Much Should I Save (and What Should I Save For)? (107 comments)

    Many of the reader questions I get here at Get Rich Slowly follow a familiar formula. The person sends me a breakdown of her income and expenses, also sharing how she’s allocating her savings. From these figures, my correspondent wants to know if I’d make changes to her budget. Unfortunately, I’m not qualified to answer questions as specific as these. (And I don’t have time to answer them all!) That said, there are often certain…

  • What Really Makes Your Retirement Accounts Grow (77 comments)

    This is a post from staff writer Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool’s Rule Your Retirement service. He contributes one new article to Get Rich Slowly every two weeks. As far as investing goes, 2011 won’t be a particularly memorable year. The Standard & Poor’s 500 began the year at 1,257 and ended the year at the exact same spot. So if…

  • A Closer Look at Bonds (33 comments)

    This is a guest post from Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool’s Rule Your Retirement service. He contributes one new article to Get Rich Slowly every two weeks. In the past, I’ve illustrated some of Robert’s posts with cats. Today, I’m illustrating his article with some of the scrappy animals I’ve met in Peru. Bonds may seem boring, but you need to…

  • 8 little-known facts and benefits of Roth IRA savings (105 comments)

    This is a guest post by Jeff Rose, a Certified Financial Planner. Rose is also the author of Good Financial Cents, a financial planning and investment blog. He’s also working on his book entitled Soldier of Finance, which combines his military background and financial planning experience. Most Americans want to save for retirement, but most don’t know how to start. Putting money into a savings account is ideal for short-term goals and emergency funds. But…

  • Compound Interest vs. Increased Income — Which Matters More? (54 comments)

    Like nearly everyone else on the internet, I’m a fan of xkcd, the nerdy webcomic from Randall Munroe. My wife, who’s a chemist, loves xkcd’s science episodes (such as this and this), while I like everything else (especially this and this). And let’s not forget the map of online communities! Many of you e-mailed to tell me that yesterday’s xkcd tackled a subject near and dear to our hearts: personal finance. Specifically, Munroe poked a…

  • Reader Story: Winning the Lottery (120 comments)

    This guest post from Tina is part of the “reader stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success — or failure. These stories feature folks from all levels of financial maturity and with all sorts of incomes. If you enjoyed this story, please consider joining our facebook community at our Get Rich Slowly Facebook Page. Although I know the schadenfreude of…

  • Slowly Rich Get with Dividends: Living on Dividends Alone? (75 comments)

    This is a guest post from Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool’s Rule Your Retirement service. He also has a blog, Twittering thing, and other things that are supposed to be important but he often forgets about, such as hygiene. Robert contributes one new article to Get Rich Slowly every two weeks. A few weeks ago, I attended the Morningstar Investment Conference…

  • All That Glitters: Why I’m Not Investing in Gold (217 comments)

    Over the past two years, I’ve received a lot of requests to write about investing in gold and silver. I’ve ignored these requests. For one, I feel unqualified to comment. For another, I’m afraid that anything I do say will just make people angry. Last week I realized, however, that I don’t have to come at this as an expert. Because I’m not one. Instead, maybe we can have a discussion about the pros and…

  • Your Retirement Account Survival Guide (55 comments)

    This is a guest post from Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool’s Rule Your Retirement service. He also has a blog, Twittering thing, and a piece of carpet that was once in Elvis’ jungle room (no joke!). Robert contributes one new article to Get Rich Slowly every two weeks. An IRA is a simple little thing. It’s a common, garden-variety retirement vehicle,…

  • How I Invest My Money (59 comments)

    Earlier this month, I shared a new financial framework I’ve been developing, one that stresses earning, spending, and saving as the building blocks of personal finance. Two weeks ago, I elaborated by sharing how I make money. Last week, I turned to the other half of the basic personal-finance equation: I shared how I spend money. (Or, more precisely, the ways in which I try not to spend money.) Today, I’ll share the ways I…

  • Rebalancing in Real Life (54 comments)

    Earlier today, Robert Brokamp wrote about the importance of rebalancing your investment portfolio. Over time, as your various investments rise and fall, your actual asset allocation drifts from your intended asset allocation, slowly pulling you away from your investment goals. I’ve recently been working to rebalance my own investment portfolio, so I thought it might be instructive to walk through the process over the next couple of weeks as I try to bring things back…

  • Rebalancing Your Investment Portfolio (39 comments)

    This is a guest post from Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool’s Rule Your Retirement service. He also has a newly reinvigorated blog, and you can have your day interrupted once or twice by his Twittering. Robert contributes one new article to Get Rich Slowly every two weeks. How would you like $4,290,387? It’s easy! Just go back to 1972 and invest…

  • All About Asset Location: How to Make the Most of Your Accounts (68 comments)

    This is a guest post from Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool’s Rule Your Retirement service. He also has a newly reinvigorated blog, and you can have your day interrupted once or twice by his Twittering. Robert contributes one new article to Get Rich Slowly every two weeks. When he submitted this, Robert advised, “File this under the ‘long and tedious but…

  • The Tao of the Dow: All About Stock Market Indexes (15 comments)

    This is a guest post from MP Dunleavey, who is a contributing editor at Money magazine and the editorial director at Daily Worth, which offers free, daily money tips for women. What exactly is the Dow Jones Industrial Average, the mythic number that punctuates each day’s stock market report? I’ve always wondered. Now, with the Dow crossing 12,000, I decided to roll up my sleeves and delve into what that 12,000 really means. Why should…

  • What To Do with an Old 401(k) (68 comments)

    This post is from staff writer Sierra Black. Sierra writes about frugality, sustainable living, and getting her kids to eat kale at Childwild.com. When a friend of mine changed jobs recently, she discovered she had half a dozen old 401(k)s trailing her from her past jobs. She wanted to get on top of her financial planning, but wasn’t sure what to do with all those old investments. she asked me for advice. Truth is, I…

  • A Brief Intro to Peer-to-Peer Lending (62 comments)

    This post is from staff writer Sierra Black. Sierra writes about frugality, sustainable living, and getting her kids to eat kale at Childwild.com. Lately, I’ve heard a lot of buzz about how peer-to-peer (P2P) lending is a great alternative for investors who feel burned by the stock market. Proponents of peer-to-peer lending say it’s a smart way to get a good return on your money without the risk of a failing economy. But before you…

  • The Most Important Factor in Retirement Savings (67 comments)

    “Wanna see something neat?” Kris asked the other night. She was holding the year-end statement from her work-based retirement plan. “Sure,” I said. “Show me the money.” She handed the statement to me. “Look at my account balance,” she said. “Look how it’s grown. It went down a little bit in 2008, but because I kept contributing, the balance has gone crazy during the last two years.” Kris’s retirement account took a hit in 2008,…

  • Reader Story: Coping with My Inheritance (76 comments)

    This guest post from Susannah is part of the “reader stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success — or failure. These stories feature folks from all levels of financial maturity and with all sorts of incomes. I grew up in an upper-middle class family that sent me into the world with a moderate financial education, no savings, but less than…

  • Don’t Get Rich Any Slower Than You Have To (66 comments)

    This is a guest post from Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool’s Rule Your Retirement service. He contributes one new article to Get Rich Slowly every two weeks. This is one of those boring articles about investing that is actually very important. To liven things up, J.D. has illustrated this article with photos of one of his cats. It’s quiz time, folks….

  • Stupid Stock Market Tricks (65 comments)

    USA Today has just published what might be the most irresponsible piece of financial journalism I’ve seen in the past five years of writing Get Rich Slowly. It embodies everything that’s wrong with the popular perception of stock-market investing. Author Adam Shell touts a hot trading trend: Stocks jump on the first day of the month. Shell writes: Stock investors looking for a trading pattern that all but guarantees a profit need look no further…

  • Index Funds: The Investment Answer? (40 comments)

    Yesterday, GRS reader Mike Robertson sent me a New York Times article about Gordon Murray, the author of a new book called The Investment Answer. Mike writes, “I’m at a point in my investing life where I disagree with the guy, but what an interesting, compelling story.” (For reference, last year Mike shared a guest post about direct stock purchase plans.) What is this interesting, compelling story? It’s about how Murray, who used to work…

  • Morningstar ratings: Useful or useless? (22 comments)

    The financial industry generally places more emphasis on style than substance. Because of this, when their work is actually evaluated, results tend to be disappointing. Wall Street’s earnings forecasts? Overly optimistic. Performance of mutual fund managers? Quite embarrassing. You may be wondering: Do Morningstar ratings also belong in the same category? You’re probably familiar with Morningstar and their one- to five-star mutual fund ratings. Many investors rely on Morningstar for stock and mutual fund research,…

  • Best Books on Investing: My Favorite Investing Authors (24 comments)

    Best Books on Investing: My Favorite Investing Authors This is a guest post from Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool’s Rule Your Retirement service. He contributes one new article to Get Rich Slowly every two weeks. A few weeks back, J.D. listed his favorite finance books (and encouraged readers to suggest their own). It’s a fine list, full of money-saving, debt-defying, financial-liberating…

  • Book Review: The Skinny on Real-Estate Investing (22 comments)

    Book Week at Get Rich Slowly comes to a close today. Well, I guess tomorrow’s Ask the Readers is about books, but this is the final review. I’ve saved the best for last. Over the past year, I’ve had a chance to read several titles in the “Skinny On” book series. And although I’ve only mentioned them in passing here at GRS, I love these books. Today I want to tell you about them. The…

  • Life After Debt: What It’s Like in the Third Stage of Personal Finance (245 comments)

    I paid off the last of my debt in 2007, quit my day job in 2008, and have been working to build wealth ever since. As I wrote early last year, I’m in the Third Stage of personal finance: I’ve paid off my debt, built a cash cushion in savings, and am maxing out my retirement accounts. And after doing all of these things, I have money left over to spend on comic books and…

  • Choosing a Target-Date Fund (35 comments)

    So, you find the lazy way to invest very appealing: You like the simplicity and the long-term results. But you don’t want to bother with building your own lazy portfolio of index funds and adjusting it as you get older (same as creating your own target-date fund). At this point in your life, you just want a set-it-and-forget-it solution, at least until you feel more comfortable building your own investment portfolio. Target-date funds seem perfect…

  • The Marginal Utility of Money (36 comments)

    This is a guest post from Mike Piper, who writes at Oblivious Investor, where he explains such thrilling topics as 401k rollovers and Roth IRA rules. I know I’m taking a risk by starting an article by defining a term from economics. But please, stick with me. It’s not a hard concept to understand, and it directly relates to your financial success. Utility is a term used in economics to describe how much value or…

  • The Best Way to Pay for Advice: The Advantages of a Fee-Only Financial Advisor (38 comments)

    This is a guest post from Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool’s Rule Your Retirement service. He contributes one new article to Get Rich Slowly every two weeks. A few weeks back, I wrote about having a financial health day at work. With the help of some of my Foolish colleagues, we’ve created a PDF that outlines how to host your own…

  • The Snowball: How Compounding Affects Money, Knowledge, and Life (48 comments)

    This is a guest post from Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool’s Rule Your Retirement service. He contributes one new article to Get Rich Slowly every two weeks. Happy anniversary to…well, all of us, I guess. This post marks my one-year (and five days) anniversary of being a contributor to Get Rich Slowly. It’s been a hoot. My very first post was…

  • MyFinancialAdvice.com Helps the Average Person Find a Financial Advisor (13 comments)

    Many companies send me press releases and e-mail trying to get my attention. Some of these companies suck. Others are fine, but I don’t have the time to look at them. Every once in a while, though, I find what seems like a true gem, something I think would be of real use for Get Rich Slowly readers. Last week, I spent an hour chatting with the folks from MyFinancialAdvice.com. Based on what I’ve seen…

  • What Do Ancient Spice Traders and the Modern Financial Industry Have in Common? (22 comments)

    This is a guest post from Chett Daniel, who writes about improving your life through personal fitness and personal finance at 5k5k.org. Last year, Chett shared what fourth-graders “know” about money. What role do financial professionals have in our personal finance lives today and in the future? Are they still the gateway to understanding financial info that’s too difficult for the common person to grasp? Or have they created a profit-producing “need” that is slowly…

  • How to get the best rates on your savings — safely (64 comments)

    Over the past year, one of the frequent questions I get is: “Where I can safely invest my money to get a decent return?” For example, Joseph wrote in November: Around February/March, I should have $5,000 to invest. My debts are under control and my wife and I have lowered our monthly expenses. I was wondering if you had any advice on ways to invest $5,000. I don’t want a savings account because the interest…

  • How My Real Estate Investing Adventure Came to an End (58 comments)

    This article is by staff writer Adam Baker, whose own blog previously featured a comparison of money gurus in Dave Ramsey vs. Suze Orman. This is final article of a three-part series on how he stumbled into real estate investing at age 23. Be sure to read part one and part two. In the second part of this series, I discussed two mistakes I made when jumping into real estate investing. Despite running a successful property management…

  • Lessons Learned from Rushing Into Real-Estate Investing (40 comments)

    This article is by staff writer Adam Baker, whose own blog recently featured a must-see graphic on credit card transactions around the world. This is part two of a three-part series on how he stumbled into real estate investing at age 23. Be sure to read part one here. When we last left off, I’d just walked away from my first real estate closing with an eight-unit apartment building and $1000 cash in my hand. I was…

  • How I Bought an 8-Unit Apartment Building with No Money Down and Walked Away with $1000 Cash at Closing (98 comments)

    This article is by staff writer Adam Baker. Baker recently outlined his ambitious 2010 goals for his blogging, business, and life. When I was 23, I bought an eight-unit apartment building with no money down. And I walked away with $1,000 cash at closing! Sounds pretty fancy, right? Wrong. It was one of the dumbest (and riskiest) moves I’ve made in my young life. I escaped without a scratch, but it was due to an…

  • Getting Started with Asset Allocation (37 comments)

    This is a guest post from Dylan Ross, a certified financial planner and a long-time GRS reader. If you’re new to investing, recognize the merits of using low-cost index funds, but you’re not sure how to allocate your long-term savings among various types of index funds, this information is for you. Asset allocation basics While there are many ways to divide investment assets into different categories, there are two main classifications: stocks and bonds. Here’s…

  • Index Funds: Why Choose Anything Else? (126 comments)

    This is a guest post from Mike Piper, who blogs at The Oblivious Investor, where he reminds readers that investing doesn’t have to be complicated or stressful. Mike is a long-time GRS reader and the author of Investing Made Simple. Like many other investors, J.D. and I are fans of taking the slow, sure path to wealth. We invest much of our money in index funds. An index fund is a low-maintenance, low-cost mutual fund…

  • The Roth IRA Made Easy (76 comments)

    Starting a Roth IRA is one of the easiest — and best — steps you can take to save for retirement. But you should understand the Roth IRA rules before investing in them. I know I’ve written a lot about the Roth IRA in the past, but I still get questions all the time. People find them intimidating. For example, Lynn wrote last week: I’m a 36-year-old single mother of two. I want to start investing…

  • Pay yourself first (63 comments)

    This article is the fourth of a fourteen-part series that explores the core tenets of Get Rich Slowly. It’s also a part of National Save for Retirement Week. One of the oldest rules of personal finance is the simple admonition to pay yourself first. All the money books tell you to do it. All the personal finance blogs say it, too. Even your parents have given you the same advice. But it’s hard. That money…

  • Investing 101: How Diversification Reduces Risk (29 comments)

    This is a guest post from Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the advisor for The Motley Fool’s Rule Your Retirement service. He contributes one new article to Get Rich Slowly every two weeks. Quick! If you had to choose just three types of assets that should be in a well-diversified, long-term investment portfolio, what would they be? If we polled the Get Rich Slowly audience, we’d get…

  • Free eBook! The Get Rich Slowly Guide to Roth IRAs (27 comments)

    In early 2008, I put together an e-book. I collected my series of articles about the virtues of the Roth IRA, cleaned them up, added new information, and drafted a 30-page document to serve as a sort of introduction to this important retirement plan. The great folks at Web Warrior Tools took my work and made a polished e-book. For the past 18 months, it’s been available for $7 from their website. But this information…

  • Making the Most of Small Windfalls (74 comments)

    It’s a big day at Get Rich Slowly HQ. Later this morning, I’ll speak with my book editor for the first time. This project is about to devour large chunks of my life. Fortunately, the new Staff Writers will pick up the slack. (Actually, to be fair, I think they’ll more than pull their own weight.) Here, then, is the first contribution from Adam Baker, Get Rich Slowly’s first-ever Staff Writer! Receiving a “mini-windfall” of…

  • How Much Is Your 401(k) Costing You? (48 comments)

    This is a guest post from Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the advisor for The Motley Fool’s Rule Your Retirement service. He contributes one new article to Get Rich Slowly every two weeks. I don’t want to dump on your boss. She/he/it gives you a job (assuming you still have one). Besides a paycheck, you also get some benefits. One perk might be a retirement plan such…

  • The Problem With Market Timing (76 comments)

    I’m in the process of consolidating all of my investment accounts at Fidelity. This isn’t because I think Fidelity is “the best”, but because I think they’re good and they’re certainly convenient. There’s a Fidelity “investor center” not far from my home. (In other words: I’m not endorsing Fidelity; I’m merely following my own advice to pick a good option instead of spending forever looking for the best.) As I gather my various accounts under…

  • Ask the Readers: How to Handle a Windfall? (79 comments)

    It’s been a while since we touched on the subject of windfalls: money that unexpectedly falls into your lap. It’s been so long, in fact, that I’ve started to receive questions about them, including this one from Aaryn: I wanted to get your advice as far as the distribution of windfalls. Would you put a certain percentage in a savings account? Invest it? Keep some in your regular checking account? What is your recommendation? Would…

  • Why I Love the Roth IRA (49 comments)

    This is a guest post from Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the advisor for The Motley Fool’s Rule Your Retirement service. He contributes one new article to Get Rich Slowly every two weeks. Want tax-free investment growth? Want more control over your retirement savings? Want to leave a bigger inheritance? If so, you should consider contributing to or converting existing retirement savings to a Roth IRA. For…

  • The Passive Way to Investment Success (494 comments)

    Many Americans conduct passive investing, which some call “lazy investing.” Though this is a common way to invest, it has its detractors. I just finished reading Paul Farrell’s The Lazy Person’s Guide to Investing, for example, and I found myself drawn to the “lazy portfolios” he describes. Lazy portfolios done by are collections of index funds. Because these portfolios are balanced — they contain stocks and bonds — they mitigate risk while providing excellent returns….

  • Reminiscences of a Stock Operator (19 comments)

    I read a lot of personal finance books. Most possess a certain sameness. They offer good advice, yes, but there’s nothing special about them. Perhaps that’s why I’m drawn to two specific types of financial books: narratives and histories. If a book can combine both of these elements, it’s a good bet I’m going to like it. Between 10 June 1922 and 26 May 1923, The Saturday Evening Post published a series of twelve articles…

  • How to Build Wealth, Ignore Wall Street, and Get on With Your Life (235 comments)

    This is a guest post rom Bill Schultheis, author of The New Coffeehouse Investor: How to Build Wealth, Ignore Wall Street, and Get On With Your Life. Schultheis is an investment advisor in Kirkland, Washington. To learn more, visit his website. What a difference a decade makes. Ten years ago everyone was chasing the next hot stock. Equity markets were generating double digit annual returns and dot-com companies were doubling overnight. Greed was widespread in…

  • Developing an Investment Policy Statement (46 comments)

    I’m in the process of consolidating all of my investments under one roof. This includes: My Roth IRA (currently with Sharebuilder) My profit-sharing pension through the family box factory (currently with Vanguard) My self-employed 401(k) (now at Fidelity) My non-retirement accounts (scattered hither and yon) Between these accounts I have a large sum to invest. I don’t know the exact total (the market fluctuates daily, and I don’t really know the value of the Vanguard…

  • Three Lessons from Warren Buffett (34 comments)

    This is a guest post from Robert Brokamp of The Motley Fool. Beginning today, Robert will contribute one article to Get Rich Slowly every two weeks. It’s my hope that he’ll bring a fresh perspective to this site, while also providing coverage of topics where I have weaknesses. Today he’s writing about one of my financial heroes, Warren Buffett. From what I can tell, there were no drugs, no free love, and just a little…

  • How to find the right CD or money market account (21 comments)

    This is a guest post from Richard Barrington, a Chartered Financial Analyst and 20-year veteran of the financial industry. Barrington blogs regularly at MoneyRates.com. Conservative savings vehicles such as certificates of deposit (CDs) and money market accounts look especially appealing these days, despite low interest rates. But how do you pick the right savings vehicle for your needs? There are many options, and a little information will help you make the best choice for your…

  • How to Create Your Own Target-Date Mutual Fund (35 comments)

    This is a guest post from Frank Curmudgeon, who writes about bad money advice at his aptly-named blog, Bad Money Advice. You may have heard of target-date funds. In 2006 they were okayed as default investment options for 401k accounts, so if you said nothing about where you wanted your 401k money to go, you might even have found yourself the proud owner of one. A target-date fund is a mutual fund that is made…

  • How to Read a Mutual Fund Prospectus (28 comments)

    This is a guest post from Neal Frankle, a Certified Financial Planner, and the author of Wealth Pilgrim, a blog about his financial journey. If we’ve learned anything from the current financial crisis, we’ve learned that it’s important to understand what it is we’re actually investing in. No more black-box investing, right? That’s true of the folks on Wall Street, but it’s also true of the average mutual-fund investor, too. If you invest in mutual…

  • Investing 101: How Bonds Work (35 comments)

    You probably know how to find and buy stocks, but how do bonds work? Unfortunately, while online stock brokers have made stock investing child’s play over the last 10 years, bond investing has been slow to catch up. In fact, on many online broker sites, online bond platforms don’t even exist. That’s made the world of individual bond investing pretty murky. You know that a certain percentage of your portfolio should be allocated to bonds…

  • Fail-Safe Investing? Harry Browne’s Permanent Portfolio (64 comments)

    “The first rule of investing is don’t lose money; the second rule is don’t forget rule number one.” — Warren Buffett At the end of March, I asked you what topics you’d like to see covered during Financial Literacy Month. I received many great suggestions, and will continue to fulfill requests not just in April, but for months to come. One comment especially caught my eye. Kenneth F. LaVoie III wrote: Never again will I…

  • Investing for Your Future (8 comments)

    Sometimes you can find financial advice in the most unlikely of places. Recently, I was browsing the website of the Oregon State University extension service for gardening information. Kris and I have found that university extension offices often have fantastic resources for do-it-yourselfers. Our extension office has gardening calendars and how-to articles, for example. Apparently the extension office also offers a variety of financial resources. The front page of the OSU extension website promotes a…

  • Investing 101: An Introduction to Asset Allocation (31 comments)

    This is a guest post from ABCs of Investing, a new site for novice investors. ABCs of Investing offers one short and simple investing post each week. Understanding asset allocation is a key piece of financial literacy. In my last post at Get Rich Slowly, I explained the basics of passive investing and why it’s a good strategy. I explored the differences between index funds and exchange-traded funds (ETFs), and showed how they’re great tools for…

  • Direct Stock Purchase Plans: A Better Way to Invest (64 comments)

    If you want to buy stocks but you only have a small amount of money each month to invest and you’re worried about paying too much in brokerage fees, you should consider a direct stock purchase plan. Hundreds of companies that trade on the major stock exchanges allow you to buy shares directly from their transfer agents for very little or no money. Buying without the middleman Years ago, I began buying shares of the Kellogg…

  • The Fundamental Rules of Investment Success (28 comments)

    John Templeton was born in the small town of Winchester, Tennessee in 1912. As a young man, he graduated first in his class from Yale University before earning a law degree as a Rhodes Scholar at Oxford University in England. Eventually he became a billionaire by popularizing globally-diversified mutual funds. Templeton started his own mutual-fund company in 1954. He sold his firm to Franklin Resources in 1992, which became known as Franklin Templeton Investments after…

  • The Index Fund Wins Again (31 comments)

    Although I mention other methods of investing around here from time-to-time, the fact is that most of my retirement investments remain ensconced in index funds. Index funds are mutual funds created to track the movement of a stock market index, such as the NASDAQ or the S&P 500. Their goal is to earn the same return as their corresponding index. But in a year like 2008, during which the stock market fell about 40%, who…

  • The National Economy Versus Your Personal Economy (52 comments)

    Yesterday I attended the mid-winter conference of the local financial planning association. I listened to various speakers talk about the economy and how it relates to personal finance. One of the presenters was John Mitchell, a local financial guru, who spoke about the current economic climate in the state, the nation, and the world. Mitchell’s presentation was outstanding — I wish I had recorded it. He argues that this country has encountered similar problems before,…

  • Investing 101: Average is NOT Normal (48 comments)

    This is a guest post from Carl Richards at Behavior Gap. It’s based on one of my favorite posts at his site, and is a terrific complement/counterpoint to my article on how much the stock market actually returns. As he points out, average returns are not normal. On average, stock market returns are higher than inflation, money markets, or bonds. Understanding this is an important step to any successful financial plan, but there is a…

  • Behavior Gap: The Psychology of Investing (19 comments)

    At Behavior Gap, Carl Richards is on a mission to help investors overcome the self-destructive behaviors that prevent them from prospering. Over the past week, while preparing for an upcoming presentation to a conference of financial planners, I’ve had the chance to e-mail and speak with Carl about his site and his goals. “Any way we can encourage people to think about money is good,” he told me. He wants people to become aware of…

  • The Young Money Stock Market Game (31 comments)

    Several GRS readers have asked me to recommend a “stock market game” so that they can learn the basics of investing without risking actual money. Though I’m aware of such tools, I’ve never used one myself. During my recent interview with The Motley Fool’s David Gardner, I asked him if he could suggest one. He recommended CAPS, which is The Motley Fool’s stock evaluation tool. But that’s not really the same thing.  I was recently…

  • Interview: The Motley Fool’s David Gardner Talks About Stock-Market Investing (19 comments)

    Earlier today, I reviewed the new book from The Motley Fool, Million Dollar Portfolio. I had the pleasure to interview author David Gardner at the end of December. This post contains excerpts from that interview. The complete interview will be included as part of the hypothetical future Get Rich Slowly podcast. J.D. Earlier this year, you met with Stephen Popick, a government economist who writes for Get Rich Slowly. During the first part of your…

  • Million Dollar Portfolio: The Motley Fool Guide to Stock-Market Investing (46 comments)

    “People want to make money fast, but it doesn’t happen that way.” — Warren Buffett Over Christmas, I read Roger Lowenstein’s fantastic biography of Warren Buffett, one of my financial heroes. Because I currently prefer to invest through index funds, it was fascinating to read how Buffett has been able to make billions by purchasing individual stocks. Next, I picked up the new book from David and Tom Gardner: The Motley Fool Million Dollar Portfolio….

  • Tax-Loss Harvesting: How to Use the Market Downturn to Save on Taxes This Year (26 comments)

    J.D. is on vacation. This is a guest post from Linden Cornett. Linden is a Portland-area professional with an interest in finance. The stock market is down this year, and many people have asked me if I’ve made any changes to my investments as a result. My general strategy is to buy-hold-rebalance my stock and bond investments, so I’ve mainly used this downturn as an opportunity to buy stocks at bargain prices. There is one…

  • How Much Does the Stock Market Actually Return? (85 comments)

    This post is graphics-intensive. To see the entire thing, you may have to click the “more inside” link. The recent market turmoil has the naybirds out in force, and they’re decrying the long-term viability of stocks. I think this is nonsense. Though I try not to be dogmatic around here, today is an exception. Today I am going to sing the praises of the stock market. Learning from the experts When I began to turn…

  • Yes, You Can Achieve Financial Independence (33 comments)

    In the midst of our rush to earn money, our scramble to save for retirement, our focus on frugality, it’s easy to lose sight of why we’re doing this. What is the goal? What is it we’re trying to accomplish by getting rich slowly? For me — and for many others — the answer is Financial Independence. Your Money or Your Life defines Financial Independence as “having an income sufficient for your basic needs and…

  • Investing 101: An Introduction to Index Funds and Passive Investing (57 comments)

    This is a guest post from ABCs of Investing, a new site for novice investors. ABCs of Investing offers two short and simple investing posts each week. Personal finance bloggers are vocal proponents of passive investing in index funds and exchange-traded funds. But not everyone knows much about these, and not a lot of bloggers do a good job of explaining the basics of passive investing. This post is intended to explain the basics —…

  • How to Invest in a Bad Economy (63 comments)

    Yesterday, USA Today published a piece describing how you should invest in a bad economy. Though the market is in shambles, the authors write, it’s no time to panic: Enough. The stock market — and your savings — have gone down steadily, day after day, for more than a year. You’ve lost thousands this month alone. It’s time to do something. But…what? Should you shift more money into stocks? Put it all into a savings…

  • Put your savings on steroids with certificates of deposit (75 comments)

    Certificates of deposit (often simply called CDs), by definition are time deposits. You give your money to the bank and then promise not to touch it for a specific length of time. In general, the longer you agree to let the bank keep your money via a CD investment, the higher the interest rate you will receive. Related >> Best CD Rates [Article continued below…] Editor’s Note: All of the rates discussed in below article…

  • Investing in a Bear Market (93 comments)

    On 09 October 2007, the Dow Jones Industrials hit a record high, closing at 14,279. What a difference a year makes: Last Friday, the Dow closed at 8451, and there’s a good chance it will drop even further. Unsurprisingly, my inbox is filled with e-mail from people who wonder what they should do. Here are some typical questions from readers like you: “Originally we had planned to open Roth IRAs this weekend, but with the…

  • How to Cope with a Lousy 401(k) Plan (42 comments)

    “The Mole” is a certified financial planner and public accountant who, in his spare time, provides a behind-the-scenes view of the financial planning industry for Money magazine. In his most recent column, The Mole explains how to deal with a bad 401(k) plan. “401(k) providers don’t actually care how they make money,” he writes, “just as long as they make a tidy profit.” The providers can make money by: Offering good choices to employees, but…

  • Simplify Your Investing: An Introduction to DRIPs (43 comments)

    This is a guest post from Sara, who writes about reaching for a life of greater simplicity and deeper meaning at On Simplicity. I’m a simple girl and I love simple solutions. That’s why I’ve fallen in love with DRIP investing — it’s about as simple as investing gets. If you’re an investor who likes to set it and forget it, DRIPs are a great weapon to have in your financial arsenal. What Is a…

  • The Four Pillars on Index Funds (21 comments)

    This morning I reviewed the highly-regarded The Four Pillars of Investing, in which author William Bernstein makes the case for diversification and investing in index funds. At the end of chapter three (“The Market is Smarter Than You Are”), he summarizes his arguments (which I’ve reformatted to be more readable in this context): Obviously, a concentrated portfolio maximizes your chance of a superb result. Unfortunately, at the same time, it also maximizes your chance of…

  • The Four Pillars of Investing (15 comments)

    For the past year, I’ve been looking for a book to recommend for novice investors, a book that would offer sensible advice without becoming too technical. I believe I’ve finally found that book — The Four Pillars of Investing, In the book, William Bernstein describes how to build a winning investment portfolio. He doesn’t focus on the details — he tries to explain fundamental concepts so that readers will be able to make smart investment decisions…

  • Picking Stocks with The Motley Fool’s CAPS (15 comments)

    The Motley Fool is a web site devoted to helping average people make better investment and financial decisions. Recently, GRS forum administrator (and resident economist) Jericho Hill got a chance to visit The Motley Fool headquarters. This is part one of a report on his experience. When I was in high school, I participated in my state’s stock market game. It was designed to introduce our economics class to the world of investing. That’s where…

  • Personal Finance Made Easy: Pay Yourself First (84 comments)

    Yesterday I shared some financial tips my father gave me when I was a sophomore in college. He didn’t stop there. After I graduated, he continued to offer advice. One of the things he told me was, “Pay yourself first.” To explain, he gave me a copy of George Clason’s 1926 classic, The Richest Man in Babylon. I didn’t read it. In retrospect, I ought to have been a little less stubborn. It took years…

  • Why It Pays to Ignore Financial News (27 comments)

    Financial news can be dangerous to the health of your investment portfolio. I spent some time yesterday reading recent articles about the stock market. What I found was mostly hysterical hype (“Gasp! Dow Jones Industrials tumble 400 points!”). All the financial stories seemed to be written as if our investment horizons were days, not years. No wonder people panic when the stock market hits a rocky patch. But do daily market movements — even 400…

  • Trading Stocks: How Do I Find Good Stocks? (64 comments)

    This is a guest post from John Forman from The Essentials of Trading. Forman is the author of a book by the same name. He has been a trader of the stock and other markets for over 20 years, and is a professional stock market analyst for Thomson Reuters. The wealth building potential of the stock market is enormous. I think we all realize that. The long-running debate, though, is whether one is better off…

  • I Quit My Job — What Should I Do With My 401k? (85 comments)

    When you leave your job, you have several choices regarding your 401(k). These options for a 401(k) rollover are pretty much universal, meaning they apply to every 401(k) and to every job change situation. Your options are: Cash the 401(k) plan and receive a full pay-out I’ve listed this option first because it has the most serious ramifications. First, if you take a full payout, you will have to pay taxes on the plan —…

  • What If You Didn’t Start Saving Early? Advice for Late Bloomers (30 comments)

    “Saving is the key to wealth,” I wrote last week while trumpeting the extraordinary power of compound interest. “If you do not spend less than you earn, and if you do not save the difference, you cannot build the wealth you desire.” The younger you are when you begin saving, the more time compounding has to work in your favor, and the wealthier you can become. “The next best thing to starting early,” I wrote,…

  • Saving and Investing: An Introduction to Diversification (25 comments)

    April is Financial Literacy Month, during which Get Rich Slowly will explore the fundamentals of personal finance. Today we’ll take a quick look at diversification. Last year, I shared a series of YouTube clips from Michael Fischer, who is on a mission to educate people about essential personal finance skills. His book, Saving and Investing, is 132 pages of fantastic financial information. Fischer doesn’t provide any scams or gimmicks — he just gives the facts….

  • How to Conquer Your Fear of Investing (33 comments)

    Writing for Kiplinger.com last month, Erin Burt laid out some tips to help conquer your fear of investing. This article is specifically aimed at those who are nervous about getting started in the stock market. She writes: The thought of possibly losing any money is a terrifying prospect. And the fact that today’s economy has seen better days probably isn’t helping those fears. Investing in the stock market has its risks. But if you give…

  • The extraordinary power of compound interest (129 comments)

    If you are young, you may not think you need to invest or open a retirement account. You probably think it is easier to worry about it five years from now — or ten. You’re wrong. Time is on your side now, especially when it comes to compound interest. No matter what your age, now is the time to begin saving for retirement. In The Automatic Millionaire, David Bach writes, “The single biggest investment mistake you can…

  • What’s the Safest Thing I Can Do with My Money? (41 comments)

    “What’s the safest possible thing that I can do with my money?” wonders Afroblanco over at Ask Metafilter: I take bearishness to an extreme. Having witnessed the 2000 tech crash, I have no faith in the stock market or the US economy. I keep all of my money (USD) in a savings account. However, with the recent financial turmoil, I have a few questions: Is it conceivable for the FDIC to fail? If so, is…

  • Money Hack: Use CDs to Beat Falling Interest Rates (42 comments)

    When the Federal Reserve cuts short-term interest rates, as it did yesterday, you feel the pinch in your savings account. My ING Direct account, for example, has dropped from 4.50% when I opened it to 3.65% today. It may drop again. Brian from The Job Bored dropped a line with a money hack for those who like to chase the highest interest rates. “Why not buy protection?”, he wonders. Here’s how: Since ING makes it…

  • Growing Money: A Complete Investing Guide for Kids (13 comments)

    During my family’s Christmas celebration, I learned a little more about my oldest nephews. I don’t see them often, so it’s hard to know what interests them. This year, I learned that six-year-old Alex likes art. You can bet I’ll be encouraging this productive hobby — the only other two things I know he likes are dinosaurs and video games. I was also pleased to learn that his older brother, Michael, likes money. “I have…

  • The Basics of RRSPs: Registered Retirement Savings Plans (28 comments)

    This morning we have a little something for our neighbors to the north. This is a guest post from Frugal Trader, who writes about personal finance from a Canadian perspective at Million Dollar Journey. J.D contacted me to contribute to his retirement account series with an explanation of Canadian RRSPs. An RRSP is the closest thing Canada has to a 401k or Roth/Traditional IRA. What is an RRSP? RRSP stands for Registered Retirement Savings Plan….

  • What to Consider When Opening Your First Brokerage Account (23 comments)

    This is a guest post from Dong, who writes about personal economy at Ask Dong. Who can forget their first time? I certainly can’t.  I was 22 and fresh out of school.  The NASDAQ was around 4000, and young turks like myself were getting jobs that we had no business holding.  The times were good. Even if I couldn’t work for a dot-com, there was no reason for me not to invest in them. The…

  • The Random Walk Guide to Investing: Ten Rules for Financial Success (18 comments)

    In 1973, Burton Malkiel published A Random Walk Down Wall Street, in which he argued that a blindfolded monkey could pick stocks as well as a professional investor. Though I bought a copy of Random Walk for $3.99 at the local Goodwill last year, I haven’t read it. It looks dense. I know it’s written for the layman, but it still seems rather academic. In 2003, Malkiel published The Random Walk Guide to Investing, “a…

  • The pros and cons of Sharebuilder (81 comments)

    Bill wrote the other day looking for my opinion on Sharebuilder. Sharebuilder is an online discount brokerage that encourages automatic scheduled purchases of stocks and exchange-traded funds. In plain English, the company makes it easy to start investing. Here’s what Bill had to say: I was wondering what you thought about Sharebuilder. I am considering signing up for an Individual Retirement Account. I am not sure if Sharebuilder is a good place to start, or…

  • Can You Have a Savings Account in a Roth IRA? (24 comments)

    Yesterday, Brent wrote with a question regarding the types of investments one can have in a Roth IRA: Is there such a thing as a Roth IRA “savings” account that gets rates comparable to a good “regular” savings accounts (5% APR or higher)? Is there a reason this is so difficult to find information on (at least for me)? It seems like any place that I want to take my Roth IRA to will require…

  • Roth IRA vs. Traditional IRA: Which is the Best Deal? (23 comments)

    I’m often asked, “Which is best, a Roth IRA or a traditional IRA?” There’s no one right answer. Which option you choose depends on your goals, and it depends on what you think your income will be like in the future. In theory, there’s no difference between the eventual returns. In practice, there are a variety of factors that can affect your decision, of which tax rates are perhaps the most notable. Walter Updegrave at…

  • Book Review: The Automatic Millionaire (60 comments)

    David Bach is perhaps best known for coining the term the latte factor, a phrase that has almost become a joke in personal finance circles. That’s too bad, really, because Bach has some good ideas. And the latte factor is a marvelous concept, applicable to many people who casually spend their future a few dollars at a time. Bach’s most popular book is The Automatic Millionaire. I’ve referred to it often, but never reviewed it…

  • The Upside of Risk: Why Market Volatility is a Good Thing (13 comments)

    The November 2007 issue of Kiplinger’s has a great article from James K. Glassman called “The Upside of Risk”. Glassman’s explanation of market risk is wonderful. Normally, I’d post an excerpt from the online version of the article and then point you to it, but I can’t find this piece anywhere on the web. Instead, I’ll post a longer excerpt than normal. Imagine a world in which stock investments performed the same year after year….

  • What if the Stock Market Makes You Nervous? (31 comments)

    A couple of readers have mentioned that they’re nervous about the stock market’s recent volatility. I’ve read similar concerns on other blogs and financial news sites. People are worried that the stock market’s performance over the last month portends an impending bear market, and they don’t know what to do. Reading these concerns reminded me of Why Smart People Make Big Money Mistakes, which I reviewed last week. In the book, the authors discuss panic…

  • Questions and Answers about Roth IRAs (Updated!) (40 comments)

    The series on Roth Individual Retirement Arrangements (Roth IRAs) has covered a number of topics — what they are, how (and where) to open one, and which investments are best. Now, in the final part, we turn to some of your questions. Remember: I am not a financial adviser. I’m just a regular guy trying to gather information to help you. If you need more specific answers, please consult a CPA or an investment professional. All of the questions…

  • Roth IRA Mutual Funds: What Investments are Best for Roth IRAs? (42 comments)

    So you are in the market for a Roth IRA, that popular, flexible, tax-advantaged vehicle that can be used to save for retirement — smart choice — but here comes the next question: which investments are best for a Roth IRA? Roth IRA mutual fund options for investment There are three basic options for your Roth IRA investments: Index funds Exchange traded funds (or ETFs) Managed mutual funds It’s essential whatever you choose it has as low an…

  • How to Open a Roth IRA (256 comments)

    You’ve heard how awesome Roth IRAs are and how starting one now can mean big bucks when you’re older. You’ve even done some research so you have a vague idea of how a Roth IRA works. Now what? How do you actually open a Roth IRA for yourself? The good news is that it’s surprisingly easy to set up a retirement account and begin investing in your future. Here’s what to do… How to open…

  • What is a Roth IRA and Why Should You Care? (97 comments)

      IRAs are tax-advantaged accounts that can hold your retirement investments. It’s easy to get intimidated by IRAs. Here is an example of a common email we receive on the subject of IRAs: “I’m going to open a Roth IRA on my own, and I’d like to know what online sites you or your readers would suggest. I want to invest in index funds, having heard they are the bee’s knees, but books and the…

  • Ask the Readers: Is It Better to Invest or to Prepay a Mortgage? (194 comments)

    Paul writes with a common question that illustrates how challenging personal finance can be, even when you’re doing the right things. Sometimes it’s difficult to choose between several good options. Here’s his dilemma: I refinanced my house a few years ago at a great rate (5-3/8%). At the time, we had a lot of equity in the house so we borrowed against it in order to build an addition. After we were finished, we had…

  • When and How To Hire a Financial Planner (14 comments)

    Last week Dylan Ross, a certified financial planner, explained what a financial plan is and why it’s important to have one . Today he discusses why you might want to hire somebody to help you create one. Typically people seek the help of a planner when they don’t have the time, know-how, or desire to do create their own financial plan. In its 13 February 2006 issue, Newsweek featured a great article by Jane Bryant…

  • What the Stock Market Decline Means for You (23 comments)

    You might have noticed that the U.S. stock markets took a tumble today. In fact, the drop was the largest in five years. What does this stock market correction mean to the average investor? What does it mean for the fellow who’s just plugging a few hundred dollars a month into his IRA? In the grand scheme of things, it doesn’t mean much. The slow, sure path to investment success is to “buy and hold”…

  • Ask the Readers: Finding a Financial Advisor? (33 comments)

    Last week we helped a reader get started with stocks. This week Rebecca asks how to take the next step. Where should she go for help? For my birthday this year my Grandmother gave me some stocks. She uses Edward Jones, but tells me that I can go anywhere. Would anyone be able to recommend a good “financial advisor” company? I’m looking for someplace: Local (in Portland, Oregon) or maybe something that has a good…

  • Are Index Funds the Best Investment? (61 comments)

    For 35 years, Bay Area finance revolutionaries have been pushing a personal investing strategy that brokers despise and hope you ignore. [This is] the story of a rebellion that’s slowly but surely putting money into the pockets of millions of Americans, winning powerful converts, and making money managers from California Street to Wall Street squirm. So writes Mark Dowie in a recent issue of San Francisco magazine. Dowie describes how Google prepared for its IPO…

  • The Beauty of Penny Stocks (23 comments)

    William at A Financial Revolution has some words of advice on penny stocks. The beauty of penny stocks is that they are one of the only investments for which one simple, blanket rule applies without any exceptions: There is never a good reason to buy a penny stock, ever. Why not? Penny stocks cost very little for a reason.  The efficient market hypothesis states that the stock price generally reflects all available knowledge about that…

  • The Billionaire Next Door: The Wisdom of Warren Buffett (33 comments)

    Warren Buffett is one of my heroes. He’s the second-richest man in the world, yet he lives more frugally than I do. CNBC recently broadcast an interview with Buffett. Naturally, it’s been posted to YouTube. Here’s the show in its entirety (with notes and excerpts I made while watching). [Update 16 April 2007: The show is no longer available via YouTube. Instead, you can view excerpts at CNBC.] As a kid, Buffett would go door-to-door…

  • An Introduction to Mutual Funds (18 comments)

    The GRS discussion forums have become spam magnets. They weren’t used much anyhow, so I’m taking them down. (To be replaced by something better in the future.) I don’t want to lose any of the contributions from readers, though, so I’ll move the best posts to this blog over the next few weeks. This first post is an introduction to mutual funds from VinTek — original thread here. This is a very basic introduction to…

  • Make Money Quick! In the Stock Market! (16 comments)

    There is no reliable way to make money quickly. If there were, everyone would be doing it. Get-rich-quick schemes are just that: schemes. Sure, it’s possible to get lucky at a casino, or to make a well-timed stock pick, but these feats are the exception, not the rule. They generally are not reproducible. An AskMetafilter user recently pleaded for some hot stock tips. Where online do you go to find “best buys” about new and…

  • Reader Question: Socially Responsible Investments? (6 comments)

    A Get Rich Slowly reader recently submitted a question: “What options exist for socially responsible investment?” My husband and I save, and we own a house and may invest in more property later, but one thing we won’t do is play the stock market.  We spend a lot of time thinking about the ills of the world and the way to live our lives to make things even a little better. It seems to us…