[Poll] The Stock Market, Investing or Gambeling?

[RIP-Felix]

Suggestion:

How we judge the actions of others usually better indicates of how we really feel, so please make the selection that best describes your view after considering how you would judge someone else who invests their money in the stock market. If you feel society wants you to answer a certain way try to ignore that outside influence, I'm only interested in how you feel! Answers are confidential, no one will know how you voted, and multiple answers are allowed.

[Tom Speirs]

Thanks for this. Interesting.

[tthurman]

I know not everyone has investments directly in the stock market, but at least for us here in the US, there is a very large contingent that have mutual funds in their retirement accounts.  In that regard many of us are dabbling in the market, albeit in a more diverse and conservative manner.

Really starting to wonder if there is any payoff without playing the market.  Seems the conservative approach is too subject to market corrections, along with the ebb and flow of the market in general.

[hansolo77]

I've only worked at 1 job in my life that offered stock options.  Of course, it was limited.  You could only buy stock in THAT company, and they didn't match it.  If you lose your job, you lose your stock.  The only way to cash out is if you sell back your stock before you quit or retire.  And honestly, I was watching the value of that company have a negative turn every single day, so was not at all interested in buying.

Having never actually dabbled in the market, I don't know hardly anything about it.  If there is a way that an average Joe Blow can just walk up (or on the computer, whatever) and buy a share of stock, then turn around a few days later to sell it back for a quick buck.. then yes this is for gambling purposes only. Now, if you're buying stock on a regular basis, and keep it long term, then yes, you're investing.  But you have to sell back sometime, or else you never benefit from the ownership.  Not knowing how the market will last on your share makes it seem more like a gamble too.  So I went with the votes as middle ground, depending on the situation, and the first one as #2.  From the point of view of somebody who has no experience in the matter, all I see is a bunch of people throwing money into it, with the ultimate goal of making money.  This is what gambling is. 

[RIP-Felix]

Here's what got me thinking of this issue.

Spoiler

So, I'm in a position at work where they offer group health insurance, but due to pro-ration my contribution is 50% (I'm not salaried full time). If I make more Gross income than a certain amount my employers heath insurance is considered affordable under the healthcare reform act (AKA "Obamacare"). I've calculated that I will get close to that number this year. Problem is, that I opted out and went with a marketplace plan and government subsidies (It's stupid they may you project future income instead of going off the previous years W-2). If I gross more than that magic number, uncle Sam will ask for that subsidy money back when I file for my 2016 Tax return, and that would be a big bill!

What I can do to combat this, however, and this is where the stock market comes in, is open a traditional IRA (Individual Retirement Account) through a qualified financhal management company, like American Fidelity for example. I sign a salary reduction agreement with my employer and HR will defer the agreed upon amount into the IRA on a pre-tax basis. That's the important factor, because it lowers my Adjusted Gross Income (AGI) for that tax year. The income I defer is not taxable until I retire and begin Drawing from it, and by then I'll probably be in a lower tax bracket and pay less on it (That's the idea anyway).

Now the IRS uses MAGI (Modified Adjusted Gross Income) when calculating your taxable income. In most cases AGI is equal to MAGI, and in my case it is. So, all I have to do to is calculate what gross income makes my employers health plan affordable (9.66% of Gross Monthly Income), then defer enough into my IRA to make sure I'm under that amount by the end of the year. Cool (Sad?) thing is that I'm actually close enough to the Federal Poverty Level (FPL) that I could reduce my MAGI even further to under the FPL and qualify for Medicaid. Then My health insurance will be free. To prevent abuse of this provision, there is a cap on how much you can defer in a year. So if I make too much I won't qualify for medicaid at a certain income, and "Obamacare" and a higher income.

It's actually a pretty sweat deal. It incentivizes people to save for retirement early in life, when they are most likely to make less money and qualify for the subsidies. And it helps those in dire straits at anytime throughout life when their income falls too low. This is a killer tax break for the middle/poor classes in America. Thank you Obama!

An IRA is managed by the financial management company you choose. They will consult you on how you want the account invested. I'll probably go with an Indexed fund like Vanguard which has averaged >6% since 1926 (Stock market crash). You will never see 6% returns in a saving or money market account, so this is an incredibly reliable way to grow the investment. While there are periodic ups and downs, over the long term (30 years or so) these average out to that 6% or so. My mom's averaging >10% right now with a mix of safe to moderate risk investments diversified for greater safety! With a $100,000 investment spaced over 35 years (~$2800/year or $238/mo) you can turn that into over $370,000 with little risk. As long as you don't get greedy and try high risk investments with greater returns or put all your investments in one place, your taking a calculate risk that usually pays off. Even if another 1926 or 2008 occurs, if your diversified enough and ride out the storm (don't panic) you'll likly regain the losses in the long term. My mom's account was seriously hit by the "recession" but has more than returned now. Had she sold off her losses then, she'd have lost almost everything. The gamble you take though is if all your investments go bankrupt, as happened to a lot of people in 1926, then your out everything for good.

[Draco1962]

I  see life in general as a gamble. We buy a house generally with a loan. We are playing the odds that we will be able to maintain employment to pay off the loan sometime during its 30 year period. Live long enough and you will know that jobs can be lost. Illness can take you out of a job or worse. Yet, we still sign our name at the bottom line. 

Anyone that plays the market for a living knows that there are wins and losses. You try to buy low and sell high to make a profit. It is a gamble. Some do it for a living, while others do it for the adrenaline rush, some for a little of both.

We all play the odds in life, hoping to have enough health, wealth, and love to make it to the end of all of it. We hope that we do not sustain any insurmountable losses that cannot be overcome before that time comes that we slip the mortal coil. Anyone that says this isn't so is a hypocrite to their self at best, and a fool at worst. 

Ready, Player One?

[hansolo77]

On 8/14/2016 at 4:17 PM, RIP-Felix said:

Here's what got me thinking of this issue.

  Reveal hidden contents

So, I'm in a position at work where they offer group health insurance, but due to pro-ration my contribution is 50% (I'm not salaried full time). If I make more Gross income than a certain amount my employers heath insurance is considered affordable under the healthcare reform act (AKA "Obamacare"). I've calculated that I will get close to that number this year. Problem is, that I opted out and went with a marketplace plan and government subsidies (It's stupid they may you project future income instead of going off the previous years W-2). If I gross more than that magic number, uncle Sam will ask for that subsidy money back when I file for my 2016 Tax return, and that would be a big bill!

What I can do to combat this, however, and this is where the stock market comes in, is open a traditional IRA (Individual Retirement Account) through a qualified financhal management company, like American Fidelity for example. I sign a salary reduction agreement with my employer and HR will defer the agreed upon amount into the IRA on a pre-tax basis. That's the important factor, because it lowers my Adjusted Gross Income (AGI) for that tax year. The income I defer is not taxable until I retire and begin Drawing from it, and by then I'll probably be in a lower tax bracket and pay less on it (That's the idea anyway).

Now the IRS uses MAGI (Modified Adjusted Gross Income) when calculating your taxable income. In most cases AGI is equal to MAGI, and in my case it is. So, all I have to do to is calculate what gross income makes my employers health plan affordable (9.66% of Gross Monthly Income), then defer enough into my IRA to make sure I'm under that amount by the end of the year. Cool (Sad?) thing is that I'm actually close enough to the Federal Poverty Level (FPL) that I could reduce my MAGI even further to under the FPL and qualify for Medicaid. Then My health insurance will be free. To prevent abuse of this provision, there is a cap on how much you can defer in a year. So if I make too much I won't qualify for medicaid at a certain income, and "Obamacare" and a higher income.

It's actually a pretty sweat deal. It incentivizes people to save for retirement early in life, when they are most likely to make less money and qualify for the subsidies. And it helps those in dire straits at anytime throughout life when their income falls too low. This is a killer tax break for the middle/poor classes in America. Thank you Obama!

An IRA is managed by the financial management company you choose. They will consult you on how you want the account invested. I'll probably go with an Indexed fund like Vanguard which has averaged >6% since 1926 (Stock market crash). You will never see 6% returns in a saving or money market account, so this is an incredibly reliable way to grow the investment. While there are periodic ups and downs, over the long term (30 years or so) these average out to that 6% or so. My mom's averaging >10% right now with a mix of safe to moderate risk investments diversified for greater safety! With a $100,000 investment spaced over 35 years (~$2800/year or $238/mo) you can turn that into over $370,000 with little risk. As long as you don't get greedy and try high risk investments with greater returns or put all your investments in one place, your taking a calculate risk that usually pays off. Even if another 1926 or 2008 occurs, if your diversified enough and ride out the storm (don't panic) you'll likly regain the losses in the long term. My mom's account was seriously hit by the "recession" but has more than returned now. Had she sold off her losses then, she'd have lost almost everything. The gamble you take though is if all your investments go bankrupt, as happened to a lot of people in 1926, then your out everything for good.

Wow.. I wish you were my financial advisor.  I've been working now for (OMG) 22 years.  Started when I was 14, now I'm 36.  And I'll be 100% honest with you.  I have no money (well, I have like $100 free to spend whenever, but nothing saved).  I have no credit.  I live with my dad.  I'm making plans though.  I set up a savings account with my bank this past April, and have $50 a week going into it from my paycheck.  It's not much, but $200 a month is a lot considering.  I started it off with an $800 deposit straight from my Income Tax return.  Then here the last month and a half or so I set up that $50 a week.  I'm at $1150 now.  My goal is to save up enough so I can buy a car in cash.  I can't get credit with anybody.  I've tried all the major companies.  I've even tried getting an Amazon card and a Kroger (Grocery Store) card.  I work for Kroger, have been for 8 years, and they still won't give me one.  I can't even get overdraft credit through my bank that I've been with for like 15 years.  It's not that I have bad credit.  It just says ZERO on all my reports.  I don't know how it got to zero, I used to have a credit card, and was even able to get a loan for a brand new car on my own without a cosigner.  Now I can't even get something on layaway at Walmart.  I can't even walk into Best Buy and sign up for a payment plan for something, and yet come back the next day with cash in hand.  Nobody wants to trust me.  Without credit, I'll never be able to move on with my life.  My current train-wreck plan is save up enough money for a car.  Then I can change my hours at work so I can work full time (currently I'm limited because I have to have hours that work around my dad driving me, and he doesn't want to be up real late or get up real early to do that).  Once I have full time, I'll be getting more money per week (I'm capped at $10.10/hour being part time, full time is $15.80).  Also with a car, I can actually move up in the company to a better paying position because I won't be restricted as much to something "10 minutes away".  Once I have the money coming in, I plan on moving out.  That can't happen soon enough, but little steps.

Investing in my future is always something I've really wanted to do, but never had the know-how.  When I got my first job, the company I worked for (no longer exists) offered me the ability to establish a 401k.  I didn't know what that meant, so I didn't sign up for it.  Years later I heard about a transferring 401k, where they offered me the ability to transfer the account over so they could keep adding to it.  Once again, I didn't really know what they were talking about, and didn't have an account anyway.  So I didn't take the advantage.  Now I'm at a place that (I believe.. still have to check) offers 401k, but I've not followed up with any of it.  @RIP-Felix Seeing all your numbers, it makes me feel like you know a lot more about this stuff than I do.  It makes me feel almost ignorant for not having done anything.  As I said, I've been working for 22 years.  Had I signed up back then on my first job, just think of the money I could have now, and be safe and protected.  I'm 36, and imagine I got another 30 or so years left before companies start telling me it's time to retire.  I definitely need to set something up.  And the sooner the better.  Going Stock Market seems almost like an option I shouldn't consider.  Not necessarily gambling, but as you said...there are ups and downs and no guarantee it's a safe bet.  A savings account with a bank is a sure bet, but the payoff isn't there.

What should I do?

[RIP-Felix]

I don't feel qualified giving out advice, so if your serious about learning this stuff, Hit the internet like I did. Just start reading. Having said that, I kinda like summarizing what I find in words. It helps me understand this stuff better.

Spoiler

A Traditional 401(K) is basically the same thing as a 403(b) which is the TSA my employer offers me. The traditional 401(K) and 403(b) is a pre-tax retirement account. Your employer pays you less and puts the agreed amount into your 401(k) each month up to 18,000 per year (as of 2016). This lowers your Gross income, the amount you make before uncle Sam dips into your pocket to take his 25% cut. In other words you pay less in taxes, but make less too. A traditional IRA can be opened by anyone, even if your employer offers a 401(k) or 403(b) or doesn't offer one. .

Your situation may be different than mine, but the above can be an advantage in the following situations:

• If you make more money now than you expect to in retirement. The traditional IRA, 401(k), and 403(b) can lower your taxable income so you pay less in taxes now. The entire un-taxed amount goes into the account to earn compound interest as you age (putting your money to work). Compared to a Roth IRA which is taxed first, you can put more money into the traditional IRA since it's not taxed to earn more interest than the Roth would. Here's the edge, when you begin drawing from the retirement account you'll pay the tax on that money, but since you make less in your retirement than you did when you were working your banking on being in a lower tax bracket so you pay less in tax on it. You save money by exploiting a tax break incentive (like a Boss!). If you expect to have more income or in retirement than while working, or you expect tax rates will increase disproportionately to inflation by the time your ready to retire then the Roth makes more sense.
• If your Income is within $5,500 or less (if your employer doesn't offer a retirement option), $23,500 or less (If your employer offers a 401(k) or 403(b)) of a government tax credit: Under the healthcare reform act you can qualify for government subsidies to help pay for health insurance if your income is between 100% - 400% of the Federal Poverty Level. If your just over 400% you can lower your taxable income and then qualify for the tax credits. The same idea applies to all sorts of government tax credits. The limit for an IRA per year is $5,500 and the limit for a 401(k) and 403(b) is $18,000 per year (in 2016 as of writing this). If your employer offers a 401(k) or 403(b) you can increase that limit to to $23,000 by opening a traditional IRA for an additional $5,500 per year. If your employer doesn't offer a retirement plan you can only open a Traditional IRA for the max $5,500 per year. There is a cap on on Adjusted Gross income if you make too much money, to prevent people who don't need the tax credits from abusing these provisions. But you'd need to gross like $80,000/per year before you see any limits on how much you can deduct from your taxes.

The Traditional versions above are different than the Roth versions, which are after-tax. With a Roth you don't sign a salary reduction agreement and can fund it anytime with money you save (Money that is reported in the current tax year). When the time comes to retire, you're not responsible for paying tax since it was funded with after-tax dollars. Also, you can pull out the money you put in anytime without penalties, as long as you don't start drawing the interest earned before age 59.5 except for things like 10,000 down on a first time house purchase, uncovered medical expenses above 7.5% of you Adjusted Gross Income, and more.

Before choosing between any plan it's best to research all options, utilize online calculators to try different scenarios, and speak with a financial adviser to make the best choice for your situation and goals. @hansolo77 I would consider doing so anyway as it sounds to me like you may have some issues with your credit, like identity theft, or just your account got associated with another person (this happens more than you think). Maybe, swing by the bank and speak with a rep. Voice your concerns, ask about steps you can take, and show them your committed to improving your credit.

Also, I wouldn't worry about your living situation if you and your family are good with it. I don't buy into these social stereotypes anyway. In many countries it's customary for children to live with their parents until marriage and often the parents and grand parents still live with their kids into advanced age. This is something that America vilifies for no good reason, especially when this arrangement provides financial, emotional, and physical protections that going out on your own doesn't. Of course the decision is yours, just saying not to be ashamed. There's nothing wrong with living with, and helping, your parents into middle age. In fact, it's commendable, as long as you pull your weight (so to speak).

[hansolo77]

Yeah... pull my weight.   

Spoiler

I was paying them $60 a week to cover half of utilities and "rent".  Then quarterly we get a water bill which I pay half of too.  Really pissed about this, as there are 3 of us living together.  Dad's on Social Security Disability, and my step-mom is bringing in retirement and has a part-time job.  So, all 3 of us have money coming in.  But because she only gets paid every other week and retirement once a month, and the "cost of living" has gone up, they raised it to $80 a week.  Then I decided I wanted to get the higher bandwith offering for our internet and told them I'd pay the difference.  So I'm paying $100 a week now.  Then my step-mom starts telling me the cost of food has gone up and they can't afford to buy anything unless I pay them more, so she wants to start charging me $200 a week.  That's $600 a month.  I can get a utilities included apartment on my own for $525.  I'm sick of it.  I'm SO ready to move out.  I told my dad I refuse to pay for THEIR food, that I'll buy my own food from now on.  That really pissed her off.  Then I argue with them about how I should be paying 1/3 of utilities, not 1/2.  Then they're all like "well then we'll start charging you for 1/3 of the mortgage, 1/3 of the car payment, 1/3 of the insurance, 1/3 of fuel, etc".  It's absurd.  I don't drive the car but maybe once a month when they're feeling generous.  I don't even use 1/2 the water.  I have severe dry skin so I take a shower like 3 times a week, and wash my clothes every other week (I have plenty of clean clothes, something new every day), and I use the toilet maybe once a day.  Because I buy my own food, I don't use their plates so I shouldn't have to pay for dishwashing or the water used to cook their rice/pasta.  They even got a new high efficiency washing machine that uses a very small amount of water.  So how is it I'm using 1/2 of the water?  She washes clothes every day, and 3-4 times on her days off.  They take showers twice a day.  They justify it though, saying we all live here together and each have to pay our part.  But I'm still like "my part is not 1/2 of a $400 water bill when I don't use 1/2 the water".

You wanna know why they don't have any money?  Because my step-mom is crazy.  She's loose with their money.  She buys $100 or more a month in books from Amazon, and at least that much in scrapbooking craft materials.  She also splurges on in-app game purchasing.  Then they get all mad when I buy comic books, or a replacement hard drive, asking when I'm going to buy a car.  I am so ready to move out.  I'm sick of it.  It's all my step-mom too.  I hate her.  She kicks our dog.  She watches Jeopardy thinking she's the smartest person in the world, even though she gets 3/4 of the answers wrong.  She even made my aunt change the channel so she could watch Jeopardy when we were at her house for Christmas.  Speaking of which, when we're at my aunt's, we're there for maybe an hour before she's ready to leave.  It takes us an hour to get there... When my aunt comes to visit for Dad to grill, she runs and hides upstairs so she doesn't have to be around her.  She suddenly gets a headache within 10 minutes of her being there, every single time.  She pretends she's allergic to cheese because she doesn't like it, but gets it on her pizza.  When we go to Subway, she gets a plain roast beef with nothing on it.  She thinks the idea of veggies on a sandwich is stupid, and would order a salad if she wanted veggies.  She says she hates BBQ sauce, but whenever she goes to Arby's she puts 2 packets of their BBQ sauce on her sandwhich.  She's always trying to correct me.  She's a crazy cat lady who had 8 cats at one point.  The place we live in has such a high concentration of ammonia from cat pee it's barely tolerable, but she doesn't even notice it.  She's a hoarder.  She uses half a roll of toilet paper to wipe herself after peeing.  She clogs the toilets in the house at least three times a week, and doesn't know how to use a plunger.  She doesn't even know how to flush half the time.  I'd go to use it, and there'd be a toilet full of toilet paper and crap and the bathroom stinks.  Before Dad married her, she had somebody break into her house and steal something.  When the police came to start a report, they had to call the Health Department on her.  She was fined BIG TIME for hazardous living conditions (no where to walk because of all the hoarded clutter, cat pee and poop all over the floor, and the stench was terrible).  She had to clean it up in like a week or get another fine, which she was but only half as much because she had made a substantial improvement.  She saw my bedroom one day and told me to clean it up because she was fined for a similar condition years ago.  My room had dirty laundry on the floor, and I had it clean in about an hour.  It took her 2-3 weeks to clean her HOUSE, and since she's married Dad, it's right back the way it was.  Dad, like I said, is on disability, and can't really do much.  I do what I can, but I really feel like it's not my responsibility.  I come home from work, go up to my bedroom, shut and lock the door, and don't come out till I have to go to work again.  I shouldn't be responsible for helping clean up after her.  Especially when it's HER mess, and she's not the one disabled.  If it wasn't for her coming home for work, sitting down on the couch and start reading or crafting, she'd actually be able to clean.  Wanna talk about her driving?  She drives with the left wheel of the car on the center median.  She brakes at the last possible moment.  When she pulls into the parking spot at our apartment, she drives up on the cement parking barrier then backs up..EVERY TIME.  Hell, she even makes me get their groceries.  They'll go to the store together then come home and she'll put the dog out back, yell up the stairs to help, then sit down on the couch and start reading.  By the time I get dressed with shoes on, Dad's already brought in half of them, tells me I don't need to help.  I do it anyway so he can sit down.  Then she gets up all mad and puts them away.  Oh gee, sorry to inconvenience you.  I don't eat this food, and Dad is DISABLED.. why the F^CK are you making him bring them in, and why are you making ME help at all?  Oh, because "Dad is hurting" and can't bring them in by himself.  Well duh, he shouldn't be anyway.. YOU should be.  Then she has this arthritis that keeps her from opening pill bottles.  She has arthritic caps and yet she still drops her pills on the floor every single day.  Then she yells at the dog because she's licking them up.  Well you stupid b!tch if you kept the door shut she wouldn't get in there now would she?  Oh wait, because you're a cat lady you feel like the cats are more important and need easy in/out access.  Well if you're going to be like that towards our dog (that we had YEARS before she married Dad) maybe you need to start being a little more smarter and realize that you have a dog and need to keep the door shut if you can't stop dropping pills on the floor.  I swear to God, if I don't get out of here soon I'm going to kill her!

I need something to change.  I need money.  I'm definitely going to start researching what options I have for investing.

[RIP-Felix]

Doesn't sound like the right time to start investing, if you're having a hard time saving enough to move out. Remember there are many expenses to consider when living on your own that you'll be solely responsible for. A budget will come in very handy for that.

Spoiler

Start by creating a spreadsheet with the following categories in rows.

• Me. The most important budget is me. You need to pay yourself first! Try to keep about $10,000 (a good round number) balance in a savings account. This is a "buffer" for unexpected significant expenses. $hit happens, and it'll cost you money you didn't budget for. A car, for example, always has infrequent large expenses that WILL bust your budget. You'll have to dip into saving to cover repairs. Same thing with medical or anything really. So the Me budget keeps you cash flow positive and replenishes your saving account like a fairy in a bottle from Zelda OOT. A good number to shoot for is $100/month. That will give you $1200 extra per year, if you don't need it your savings account will grow.. Allow it to, DON'T SPEND IT! When your account replenishes to your buffer, you can spend the excess on the other budgets (like retirement).
• Rent, which could include utilities (water, gas, electricity, garbage, etc.):
• Food
• Entertainment
• Auto (Gas, regular maintenance, loan payments, car insurance, and etc.)
• Insurance (medial, dental, vision, homeowners, fire, theft, cancer or whatever you want or need).
• Retirement, your 401(k) contributions and/or IRA. Create a different one for each account.
• Miscellaneous, the all inclusive God-know-what category for anything that cost's money but doesn't fit in the other categories.

These are the categories I budget for when calculating what I need and where I can save. It's also how I know what I'm spending and if I can afford something. .Once you've created a budget to account for all your non-negotiable expenses (Rent, loan, insurance, and most importantly what you pay yourself every month), you begin looking at where you can skimp and save. Usually, food and entertainment are the easiest to lower, but they are also the things that make life more enjoyable. If at the end of the year your savings account has grown beyond your buffer (say $10,000), you may be able to afford saving for retirement, moving out on your own, a loan, netflix, cable, and so on.

Once you have your budget in excel, try plugging in numbers and different scenarios. This is where excel shines! You can use formulas and that dreaded math you learned in school to calculate your Gross, Adjusted Gross, Modified Adjusted Gross, and net Income. You can calculate the compound interest on a loan or growth of a retirement account. If you open a Traditional IRA and/or contribute to a 401(k) or 403(b) you can calculate how much less you would pay in tax that year, which lowers your gross (and Net) income, so you can decide how much you can afford to contribute. You can use the scenarios to see if you can lower your income to qualify for a loan, government tax breaks for the lower/middle class, and much more. I Highly recommend you start by making a budget in excel. Then go online to figure out how to optimize it. Of course, stick to your budget. Knowing exactly how much to spend on what, and when, and having everything budgeted for will save you so much "lifeache" in the long run. Nothing should surprise you, and if it does, you should be able to  cover it with your Me budget and savings buffer. I would not recommend moving out until you have a good grasp of making and using a budget, which includes the discipline with money using and sticking to one slowly builds. My advice is to wait a while, see if you can stick to your budget for a year. This will give you the time to use and refine your budget, get familiar with excel and it's formulas, look around and compare apartments, appraise and update your working situation or wage (nice way of saying get a better job or negotiate a raise), consider a move to another region where opportunity is greater, to research personal finance and all the options available like government subsidized housing, "Obamacare", food stamps, and etc. It sounds like your at a cross roads in your life that will greatly affect your future. The worst thing to do is make a hasty decision. Personal finance is like using a map, it shows you where each road leads and how to get there.

Other Thoughts:

It's a tragedy that personal finance is not taught in public high schools as a required course that takes at least 2 years to complete, and with regular exersizes to remind/rebuild on previously covered material. It is by far the most useful skill anyone could learn and everyone should have been taught.

[Draco1962]

Learning to manage one's finances is critical. Understanding credit, budgets, comparison shopping, defining wants vs. needs - all important lessons to be learned before going out into the real world and getting one's teeth kicked in by the unexpected financial emergency. 

[RIP-Felix]

Just found this. It has a bunch of the same information I summarized but is easier to understand. I think I'll print one out, bust out the old pencil and highlighter and see how I'm doing! A refresher is never a bad idea. Plus I find it motivating.

Page 17 talks about the advantage ot non actively managed "Index" funds. I alluded to it ealier but they put it best, "Historical data shows that index funds have, primarily because of their lower fees, enjoyed higher returns than the average managed mutual fund."

[Tom Speirs]

I recommend the "Motley Fool" to anyone who wants some no nonsense and easy to understand advice on investing, savings and general common sense finance stuff.

[RIP-Felix]

 

On 8/15/2016 at 5:53 PM, hansolo77 said:

... have no credit.  I live with my dad.  I'm making plans though.  I set up a savings account with my bank this past April, and have $50 a week going into it from my paycheck.  It's not much, but $200 a month is a lot considering.  I started it off with an $800 deposit straight from my Income Tax return.  Then here the last month and a half or so I set up that $50 a week.  I'm at $1150 now.  My goal is to save up enough so I can buy a car in cash.  I can't get credit with anybody.  I've tried all the major companies.  I've even tried getting an Amazon card and a Kroger (Grocery Store) card....

What should I do?

@hansolo77 As Tom pointed out fool.com has a bunch of good info. You should read this and this. You may find it useful. If you can, try and get your credit reports and correct the errors. I'm not sure how you're getting paychecks now, but if you can get them to direct deposit the entire amount into your saving/checking account with your bank, they'll have your monthly income. Having all my income go through my bank first, instead of cashing at a Fred Meyer and paying for everything in cash, allows me to take advantage or their financial analytics (pie charts, budgets, categories to place each purchase into, financial history, and etc.). I match their analytics to my budget and keep track of spending etc. Also, the bank offered me a low interest (7%) credit card with a low limit ($750) shortly after opening my account (I guess after they saw I was receiving a regular paycheck). I use it everywhere possible and pay it off in full every month, but it makes it hard to buy certain things from stores that don't accept checks. I prefer using the card because regular responsible use establishes good credit and I don't like to carry cash on my person. I have tried several times to get them to up my credit limit, but they keep finding reasons not to.The first time I didn't make enough money, but recently they saw my student debt and ran for the hills - Which I paid off in full about a month later. I tried to get my free online credit report, but they asked about some accounts I don't remember opening, during the part where they ask questions about various accounts to prove who you are. So I'm probably going to have another talk with a rep at my bank to see if everything is on the Up-n-up. It reminded me of this (check out 4:44):

Spoiler