Investing in your 20s & 30s for dummies

Introduction 1 About This Book 1 Foolish Assumptions 2 Icons Used in This Book 2 Beyond the Book 3 Where to Go from Here 3 Part 1: Getting Started with Investing 5 Chapter 1: Making Sense of Your Investing Options 7 Growing Your Money in Ownership Investments 7 Sharing in corporate growth and profits: Stocks 8 Profiting from real estate 8 Succeeding in small business 9 Keeping Money in Lending Investments 9 Understanding Risks and Returns 10 Understanding risks 10 Managing risks 12 Making sense of returns 13 Where to Invest and Get Advice 14 Finding the best fund companies and brokers 14 Finding an acceptable advisor 15 Chapter 2: Using Investments to Accomplish Your Goals 17 Setting and Prioritizing Your Shorter-Term Goals 17 Accumulating a rainy-day fund 18 Saving for large purchases 18 Investing for a small business or home 19 Saving for kids' educational costs 20 Investing short-term money 20 Investing in Retirement Accounts 20 Understanding retirement account perks 21 Grappling with retirement account concerns 21 Taking advantage of retirement accounts 23 Surveying retirement account choices 23 Selecting retirement account investments 26 Assessing Your Risk-Taking Desires 26 Chapter 3: Setting Your Return Expectations 29 Estimating Your Investments' Returns 30 Money market funds and savings account returns 30 Bond returns 31 Stock returns 32 Real estate returns 32 Small-business returns 34 Compounding Your Returns 34 The value of getting a few extra percent 34 Considering your goals 36 Chapter 4: Minimizing Your Taxes When Investing 37 Understanding Investment Taxes 38 Tracking taxation of investment distributions 38 Determining your tax bracket 39 Paying attention to the 2017 Congressional tax bill 40 Devising tax-reduction strategies 40 Reducing Your Taxes When Selling Investments 42 Weighing nontax issues 42 Tuning in to tax considerations 43 Part 2: Preparing Your Investing Foundation 47 Chapter 5: Laying Out Your Financial Plans 49 First Priorities: Paying Off High-Cost Debt and Building a Safety Reserve 50 Paying off high-cost consumer debt 50 Establishing an emergency reserve 51 What about Paying Down Other Debts? 52 Assessing student loans 52 Considering paying down mortgage debt 54 Sorting Out Your Financial Plans 54 Considering your investment options and desires 55 Assessing your savings rate 56 Investing regularly with dollar cost averaging 57 Knowing the Impact of Investing for College Costs 58 Paying for college 59 Considering educational savings account options 59 Investing money earmarked for college 61 Securing Proper Insurance 61 Chapter 6: Starting Out with Bank and Credit Union Accounts 63 Understanding FDIC Bank Insurance 64 Investing in Banking Account and Savings Vehicles 64 Bank checking accounts and debit cards 65 Savings accounts and certificates of deposit 66 Negotiating with Bankers 67 Feeling Secure with Your Bank 68 Evaluating any bank 68 Protecting yourself when banking online 69 Exploring Alternatives to Bank Accounts 71 Credit union accounts and benefits 71 Brokerage accounts 72 Money market mutual funds 73 Chapter 7: Managing Money Market Funds 75 Defining Money Market Mutual Funds 75 Making sense of the appeal of money market funds 76 Understanding the drawback of money market funds 77 Understanding Money Market Fund Holdings 78 Protecting and Accessing Your Money in Money Funds 79 Protecting your money 79 Accessing your money 80 Using Money Market Funds in Your Investment Plan 81 Shopping for the Best Money Funds 82 Understanding traits of leading money funds 82 Naming good money funds 83 Alternatives to Money Market Mutual Funds 85 Part 3: Investing in Stocks, Bonds, and Funds 87 Chapter 8: Getting Your Slice of Capitalism with Stocks 89 What Are Stocks? 90 How (And Why) You Can Make Money with Stocks 91 Understanding the importance of corporate profits 91 Making sense of how you profit with stocks 92 Timing Your Stock Buying and Selling 93 Following market indexes 93 Using price/earnings ratios to value stocks 95 Avoiding temptations and hype 96 Getting past the gloom 97 Sidestepping common investing minefields 97 Highlighting How to Invest in Stocks 99 Investing in stock mutual funds and exchange-traded funds 99 Picking your own stocks 100 Maximizing Your Stock Market Returns 103 Chapter 9: Securing Investment Income and Principal with Bonds 105 Defining Bonds 106 Understanding bond issuers 106 Considering credit (default) risk 109 Making sense of bond maturities 109 Using Bonds in a Portfolio 110 Finding uses for bonds 111 Comparing other lending investments with bonds 111 How and Where to Invest in Bonds 115 Choosing between bond funds and individual bonds 115 Investing in Treasury bonds 116 Investing in non-Treasury individual bonds 117 Evaluating individual bonds you currently hold 118 Chapter 10: Investing in Funds: Mutual Funds and Exchange-Traded Funds 119 Understanding the Advantages of Funds 120 Maximizing Your Chances for Fund Investing Success 122 Understanding the importance of performance and risk 122 Examining fund management experience 123 Keeping costs down 123 Understanding and using index funds 124 Understanding exchange-traded funds: Index funds that trade 125 Creating and Managing a Fund Portfolio 126 Identifying the Best Mutual Funds and ETFs 128 Investing in the best ETFs 128 Picking the best stock funds 130 Balancing your act: Funds that combine stocks and bonds 132 Finding the best bond funds 133 Considering Alternatives to Investing in Funds 138 Your own online fund 138 Unit investment trusts 138 Brokerage managed accounts 139 Hedge funds for the wealthier 139 Chapter 11: Understanding Investment Brokers 141 Getting Your Money's Worth: Discount Brokers 141 Assessing the high-commission salespeople's arguments 142 Selecting a discount broker 143 Considering Online Brokers 145 Examining your online trading motives 145 Taking other costs into account 146 Looking at service quality 146 Listing the best online brokers 147 Part 4: Investing in Real Estate, Small Business, and Other Investments 149 Chapter 12: Seeking Shelter and Appreciation in Real Estate 151 Comparing Owning a Home to Renting 152 Weighing financial considerations 152 Considering costs and your time frame 153 Deciding when to buy 154 Figuring Your Home-Buying Budget 155 Getting your financial house in order 155 Determining your down payment 155 Doing lenders' calculations 156 Shopping for Your Home 158 Understanding your housing options 158 Researching communities 160 Checking out and valuing a home 161 Investing in Investment Real Estate 161 Understanding real estate investment's appeal 162 Sizing up real estate investment options 163 Conducting real estate investing research 167 Chapter 13: Financing and Putting Together Real Estate Investments 169 Financing Your Real Estate Deals 169 Achieving loan approval 170 Debating fixed-rate versus adjustable-rate mortgages 173 Deciding between fixed and adjustable mortgages 174 Finding your best fixed-rate mortgage 176 Landing an appropriate adjustable-rate mortgage 177 Understanding other mortgage fees 180 Finding the best lenders 181 Refinancing for a better deal 183 Working with Real Estate Agents 184 Recognizing agent conflicts of interest 185 Selecting a good agent 186 Putting Your Deal Together 188 Negotiating basics 188 Inspecting the property 189 Shopping for title insurance and escrow services 190 Selling Real Estate 190 Negotiating real estate agents' contracts 191 Selling without an agent 192 Chapter 14: Taking Your Talents to the Small-Business Arena 193 Investing in Your Career 194 Deciding to Start Your Own Business 195 Weighing your options 195 Entrepreneuring at a company 196 Turning a Business Idea into Reality 196 Drawing up your business plan 196 Plotting to leave your job 199 Financing your business 200 Considering Small-Business Investment Options 202 Buying an existing business 202 Investing in someone else's business 203 Looking at franchises 204 Beware the pitfalls of multilevel marketing companies 205 Chapter 15: Exploring Other Investment Vehicles 207 Considering Gold and Other Precious Metals 207 Contemplating Collectibles 209 Understanding the allure of collectibles 210 Seeing the realities of collectibles and their returns 210 Considering advice on buying collectibles 213 Understanding Annuities and Cash-Value Life Insurance 214 Availing yourself of annuities 214 Considering cash-value life insurance 214 Part 5: The Part of Tens 217 Chapter 16: Ten Things to Know about Investing Resources 219 Get Educated to Discern the Best from the Rest 219 Beware "Free" 220 Understand the Influence of Advertising 221 Value Quality over Quantity 221 Know How to Check Out a Resource 222 Beware Hype and Exaggeration 223 Don't Assume Quoted Experts Know Their Stuff 223 Investigate Gurus' Claims 223 Don't Believe Investment-Newsletter Claims 224 Check Out and Keep Up with My Favorite Resources 225 Chapter 17: Ten Essential Tips for Investing Success 227 Regularly Save and Invest 5 Percent to 10 Percent of Your Income 227 Understand and Use Your Employee Benefits 228 Thoroughly Research Before You Invest 228 Shun Investments with High Commissions and Expenses 229 Invest the Majority of Your Long-Term Money in Ownership Investments 229 Avoid Making Emotionally Based Financial Decisions 229 Make Investing Decisions Based on Your Plans and Needs 230 Tap Information Sources with High Quality Standards 230 Trust Yourself First 230 Invest in Yourself and Others 231 Chapter 18: Ten Things to Know about Investing Apps 233 Beware of the General Dangers of Putting Apps on Your Cellphone 234 Use Apps Only from Proven Companies with Good Reputations and Longevity 234 Consider the Alternatives to an App 235 Use the Best Personal Finance Apps to Have More to Invest 235 Be Skeptical of Investing Apps Offering "Free" Trading 236 Review Current and Historic Financial and Economic Data 237 Invest with Leading Fund Providers 237 Tap into the Best Investment Brokerage Firms 238 Examine the Best Real Estate Apps 238 Seek out Good Small-Business Apps 238 Personal Finance in Your 20s & 30s 239 Bonus: The Lowdown on Health Insurance 241 Making Sure You're Covered 242 Transitioning your coverage 242 Seeing how the 2010 healthcare laws (Obamacare) changed your coverage 243 Trumpcare? 244 Finding Your Best Health Plan 245 Selection of doctors and hospitals 245 Plan benefits and features 246 Shopping for Health Insurance 246 Uncovering the best policies 247 Handling insurance rejection 248 Health Savings Accounts: Tax Reduction for Healthcare Costs 249 Index 251