I'm twenty years old, a new dad, and have a few grand saved that I would like to work for my (and my son's) future. I was thinking of investing in a/some mutual funds. What should I do? Should I invest agressively now to maximize return while I'm young?
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Adamant
ANSWERS: 6
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You'll want to find yourself a good financial advisor and ask him/her that question. I don't think there are any on here. I would personally invest semi-conservatively to make money, but not enter a high risk situation. With the economy and markets going up and down daily it's hard to justify risking all that cash.
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Keep at least $1500 in an ordinary savings account to keep away those emergencies that would derail your ambition. by taxigringo.
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In my opinion, ideally you need enough easily accessible savings so that you could support yourself and your family for six-eight months if need be. THere could always be an emergency where you would truly need to access those funds. Then, max out your 401K contribution with your employer assuming they have one. For your son, if you'd like to start saving for your son's college, there are 529 plans you could use. Make sure you start a Roth as well if you are eligible. Personally, I would invest conservatively. SInce you are young, let time do the work for you--it's all about compound interest!
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You do realize that now is the worst time to do that, right? You may want to hold on to your money and temporarily put it into a high yield CD (if there is such a thing) or maybe some real estate till the ecomony strengths and then you can invest wisely
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I would divide it evenly between a no-load index fund (like Vanguard) and US Series I Savings bonds, currently paying 5.64%. Keep all of these in your name, since there will not be any immediate advantage to putting them in your son's name, and if the bonds are used for your son's college, you won't pay any taxes on the earnings.
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