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lost_girl_2019 OP t1_j2dav8b wrote

Reply to comment by CelticsWin7 in $50 isn't much, but I want to start somewhere. by lost_girl_2019

Is that what I would buy into? The VOO and VTI? What is an S&P 500 fund? I'm in my mid-30's, so a little late to the game.

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EffectAdventurous764 t1_j2dc2ok wrote

The S&P is a basket of U.S shares it includes companies like Apple/Microsoft/Amazon and hundreds of other shares.

You are essentially buying just over 500 shares in the American stock market and its a great place to start investing, when some companies are struggling the others help balance it out. I D.C.A (dollar cost average) into it every week. I would recommend doing that.

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lost_girl_2019 OP t1_j2dex18 wrote

Okay, how do I go about doing the D.C.A.?

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nrealistic t1_j2df6tp wrote

Putting the same amount in every week or month is DCA. The alternative would be waiting until the market seems low, buying a bunch of stock, and then not buying any more for a long time until the market seems low again

I think DCA generally performs better / is safer. Personally, i do it - I have it set up so a portion of every paycheck is deposited into my brokerage account and invested.

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lost_girl_2019 OP t1_j2dfhcv wrote

Yeah, I wouldn't have any idea how to tell if it's low. When I look at those charts, my brain feels like it's frying. I literally have ZERO experience in this stuff. I am so appreciative of everyone's help and kindness towards my lack of knowledge and experience!!

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tsnara t1_j2dof55 wrote

Don’t try to time the market. Just buy when you have your $50 available.

Some times you get a “good” price per share with that $50, others not so good. Good price means your $50 will buy more shares compared to a bad price.

But either a good or bad price on each $50 purchase you make will result in more or less the same outcome - you’ll own a lot of shares that accumulate over time. Especially if you’re diligently buying shares each time you have extra cash, with little regard to the price you pay.

That’s the secret - amass shares and don’t sell them for decades.

(Ps - Don’t buy individual stocks- stick to broadly diversified mutual funds or ETFs)

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JJROKCZ t1_j2e1q3k wrote

Time in the market beats timing in the market. Put whatever you can in when you can and don’t sweat too much over it. Anything you do now is a benefit to your older self

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absurdamerica t1_j2eaz2u wrote

The habit of saving is far more important than any timing. I’ve been consistently putting in for 23 years and it’s a big pile of money now.

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Strong_Woodpecker634 t1_j2fnpvn wrote

Get the book, or audiobook, the simple path to wealth by JL collins. You need to build some base financial literacy in that book is really all you need.

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lhamil64 t1_j2frh6v wrote

>Putting the same amount in every week or month is DCA.

Check out the wiki on investing:

https://www.reddit.com/r/personalfinance/wiki/investing/

Dollar cost averaging is when you have a sum of money that you want to invest and, rather than investing it all at once, you spread it out over time. If you are investing as you earn, it's not technically DCA. And as the wiki says, it's generally better to just invest the lump sum at once. But by the same logic, it's better to invest as you earn rather than saving it up to invest later (which I need to be more disciplined about tbh)

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SaveUkraine2022 t1_j2dba58 wrote

The person is referring to ETFs. They’re essentially securities whose price depends on the assets they contain (more or less a collection of investments)

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lost_girl_2019 OP t1_j2dc91k wrote

Got it, thank you!

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SaveUkraine2022 t1_j2dcfo8 wrote

The aforementioned index ETFs are generally considered rlow-risk investments relative to other ETFs and stocks.

That being said, investment returns are usually dependent on the level of risk involved. The rate of return is directly proportional to the level of risk

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lost_girl_2019 OP t1_j2debfr wrote

So the more aggressive your investment, the higher the likelihood of having a higher "payout" so to speak? I don't know the exact term.

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Mountainhollerforeva t1_j2dhbr7 wrote

It’s more about the risk profile than the level of investment. More risk equals more potential rewards. But you want something moderate risk like VOO which is an S and P 500 tracker. Meaning it’s made up of a mixture of s&p500 stocks.

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According_Elk_8196 t1_j2ednlg wrote

Yes in general a higher risk investment should have a higher expected payout than a lower risk investment but the range of outcomes (meaning chance of loss) will be higher

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pretend_im_not_here2 t1_j2dpfvk wrote

You are definitely not too late. I didn’t really get into it until I was around 30. I invest actively and passively, I’m not getting rich, but if I hadn’t started putting money in the market I wouldn’t have like an extra $100k that just accumulated over time

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Luddites_Unite t1_j2e6nuq wrote

Vti is us market including s&p 500 companies and is a good choice. Either way, voo or vti, you only need one of them

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