re: Investing Outside Of Retirement

Believe me, you couldn't contribute $17.5k to a retirement plan, more like $7k and IRA max was $2k. It is a lot easier to invest early and consistently than trying to catch up later to an impossibly large number as has happened to many boomers. I'm closing on the 5-0 any year now. I think the IRA limit is very low, especially for those that either have very bad 401k opps or those that don't have a company sponsored plan.

If someone continually puts all of their available investment $'s in tax advantaged account and has nothing left available in taxable what happens when something very favorable comes their way way and they say, frick, I would have to hit my IRA/401k with penalties for that. Under current tax code there are considerable tax advantages with harvesting tax losses through the years, too.

Best thing is to have a good career/earnings then the taxable scenario is forced upon you at some point.

Thanks. I think I'm going to go the ETF route

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Ah so its an etf I should be looking into. I was more so wanting to just use a little bit of my savings and buy some stock that pay out dividends and work from there. Mutuals are supposed to be a long term deal though.

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Here's what I would do, in order:

1.) Get your feet wet in equity investing with either Mutual Funds/Index Funds or both. Once you're used to investing in set monthly increments, THEN:

2.) Buy some dividend paying stocks, and set them to automatic reinvest. Set them, leave them alone, and THEN:

3.) Move money from INDEX funds into Index ETFs. Leave your managed mutual funds alone, unless they under perform for 2 years. Once you've gotten comfortable with all these steps, you'll be disciplined and educated enough to THEN:

4.) Start making individual stock plays, using Options, commodities, futures. Most importantly, before doing any of these things:

***ALWAYS REMEMBER THE FIRST RULE OF INVESTING***

DO NOT INVEST IN ANYTHING YOU DON'T UNDERSTAND

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So, I buy 1000 shares at their 70.21 price today for $70,210. At the end of the year I get a dividend for $1,867.59,

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That dividend $ will fluctuate based on 2.66% of the NAV (Net Asset Value) which is currently $70.21, but will change daily, either up or down. Keep in mind, Dividends are paid to you/reinvested, whether the ETF's share price goes up or down.

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But, if I put that same amount of money into my wells fargo money market account I get 3% for $2100.

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First of all, never let Wells Fargo take that Money Market away from you, you'll never see that interest rate again. You do have to pay taxes on interest, btw.

I appreciate the advice you have given in this thread. As far as my situation goes:

I am currently maxing out my Roth IRA and investing 10% of my salary into my 401K. I do not wish to increase my retirement contribution any further until next year. I have a sizable amount of savings that I accumulated last year that I am carving down to be a simple 6-12 month emergency fund. So far I have removed $10.5k to max out my contributions for 2012 and 2013 in my Roth IRA. I still have between $10-$15k that resides in savings that I wish to dump into a taxable account. Considering that I want to learn the ins and outs of investing, I have decided to start with the mutual fund route.

Does my decision to go with a mutual fund seem like a good place to start with the $10k-$15k I have available?

Roths are excellent, tax free earnings and can withdraw contributions with no penalty or taxes down the road if needed. Retirement investment you have in-place look good. To me, there is little difference between equity mutual funds and ETFs that cover the same holdings at low cost if the ETF is liquid and has a small bid/ask spread. Vanguard's are another class of the mutual fund, other providers ETFs are not structured that way. Like stocks, ETFs do allow buy/sale throughout the day and one could set stop losses if desired whereas mutual funds will always transact/settle at the end of day NAV. Mutual funds would be much easier to set future automated investments and if you go with Vanguard there is no purchase fee. Most brokerages allow reinvestment of dividends, some offer it for free, but I don't do that in taxable accounts as the dribs and drabs that will flow in over time can become a PITA for taxes.

Personally, I would consider low volatility equity investments at this point if I were investing new money. I do not know the future but would prefer to be in something at this time that will decline less than the broad market in the event it goes against you. I own SPLV and ACWV in that space, not saying it is right for others. I have money in equities now that the preponderance was invested at much lower values and am targeting a return that may be less than the broad market based on asset allocation and holdings but still provides a real return, and want to minimize risk and still capture upside. That is a totally different mindset than someone trying to increase their NW rapidly.

If you are otherwise investing consistently, ie retirement plans, there is nothing wrong with holding some cash waiting for better opportunities. More money is lost when people take on more risk than they thought, then emotionally dump large losses compared to holding cash or ST bonds and buying lower priced equity. Then again, cash used to pay you something while you waited. If the Fed hadn't done what they have, the equity markets could still be in the shitter for all we know.