Hi! I am a contractor in IT with a 401K from previous employers. I am planning on opening another 401K as a 1099 contractor to combine with. And I am learning about the stock market.

I have been researching on Investopedia and have created an Investopedia simulator account. I have walked through the first exercise and am planning on doing more before buying any real stock.

I have bought two books that were highly recommended:

  1. A Random Walk Down Wall Street
  2. The Little Book of Common Sense Investing

My question is this. When should I be ready to start actually investing? How much is recommended to save and try out?

I am not doing the “get-rich-quick” route. I am taking the slow steady route so that I can live off of what I earn from stocks with my 401k in 20-30 years from now.

Any advice is greatly appreciated!

  • slazer2au@lemmy.worldEnglish
    2·
    1 month ago

    Good thing is you have the right mindset of long term investing not “what’s hot and I can flip”

    For suplimental retirement funds I would go for index funds that tracks the SP500 and a separate one that tracks the rest of the world. My Australian indexes are VAS (vanguard asx300, the Aussie version of the SP500) and VGS a worldwide fund excluding Australian companies.

    You can use something like JustETF to compare index funds.
    The main thing to remember is time in the market will generally beat tim ing the market for this kind of thing.

  • DickFiasco@sh.itjust.works
    1·
    1 month ago

    You can’t really go wrong by just investing in a broad index fund like the S&P500 with a small amount (10-20%) in bonds or treasuries. If the market drops 10%, sell the bonds and buy stocks. If your timeline is 20-30 years, you’ll likely see many bull and bear markets, bubbles and crashes, etc. The trick is to not get discouraged after a crash or after missing out on a bull run. Just keep depositing whatever you can every month and I guarantee you’ll build wealth. As you get closer to retirement, you’ll want to move more of your portfolio out of stocks and into low-risk assets.

    Other than the performance of the market and how much you put in, the other two big factors are tax advantages and employer contributions. Make sure your deposits get you a tax break in some way. If you’re in the USA, the two breaks you can get are either not paying tax on money you contribute (traditional IRA), or not paying tax when you withdraw (Roth IRA). If your employer offers any kind of matching contributions, make sure you’re using them to the full extent.

    I’d recommend against picking individual stocks except for maybe a small portion of your account.

    Edit: forgot to mention fees. Check things like expense ratio for any index funds you buy. Typical fees should be less than 0.1%. This can have an impact over a long time.