I am an engineer with MS and PhD focusing in nanotechnology, and artificial intelligence.
I have a day job, but I enjoy on the side to dabble in politics.
During the 2020 presidential cycle realized that many people lack the understanding of how the market works, and how they can benefit from it.
Here is the number one piece of advise that anyone can give you about investing in the Market: Never invest money that you will need. Only invest money you are willing to lose.
Unless a company goes bankrupt, time and patience are your friend.
Remember you don’t lose money when your investments go down, you only lose money when you sell at a loss.
Once you take this approach, you will see that indeed the stock market is one of the most effective ways to build wealth, now the next step is to know how to do your investments in the most effective way possible.
Here are few additional hints.
- Open a Roth IRA account. Roth IRA accounts allow you to build wealth, and since you are using money that has already been taxed, the earnings on those accounts are TAX FREE. Assume you invest $10K and by your retirement age, that money has grown to $100K 20 years later. It means that you will have $90K tax free. Too good to be true? No, the only “gotcha” is that you can only withdraw that money after you reached a certain age, and there is a limit to the yearly contributions.
- If your employer has a retirement matching: ALWAYS contribute the amount to maximize the employer matching. This is FREE money, that you would be leaving on the table if you don’t max out. What it is the trick? perhaps you can’t “afford” maxing out, well try to make adjustments in your standard of living, and live below your means, and you will quickly find out that you can afford saving more for your retirement.
- If you have children, open 529 accounts for them, just like Roth IRA accounts, they grow tax free, and in some states they give you yearly tax deductions. If you have a genius kid who doesn’t need the money, you can transfer it to family members (self, spouse, uncles, nephews, grand kids, etc).
Notice how in all those three cases, the main advice remains valid: Never invest money you know you will need. If you withdraw earlier from a Roth IRA, or 529 accounts either before the retirement age or for emergencies not education related, you will need to pay penalties.
People with money are not smarter than you. They simply have the benefit of having enough money to live, and money to invest.
This is one of the reasons the income inequality has grown so large. People with money can afford to invest safely.
People who live paycheck to paycheck don’t have that opportunity.
You can find me in twitter at https://twitter.com/AlanMyron
Feel free to post a question about investments. And if I can help, I will gladly do so.
Oh! and before I forget, if anyone tells you they can manage your money better than you can, run, run away. Always keep control over your own finances. Only you know your own reality, and only you can decide what is best for you.
My advise will be only to help you get started.