How do I make my money work harder for me???

I am a 33 year old working professional. I make a low six-figure income that enables my wife to be a stay at home mom to our twin baby girls! Up until now I have been able to afford $100-$200 a month into my 401k regularly for the last 3 years. I have been pretty conservative with low risk plans and options, with a goal of slowly growing my balance. But I've realized that it's time to take things up a notch if I want to retire by age 50 or 60, provide for my girls' college, and maintain our standard of living. What's the best way to familiarize myself with investments & stocks? Where should I start? It's time to start making money work for ME instead of working for money! I don't expect to become a millionnaire overnight, but it would be nice to build a pretty solid retirement / savings account over the next 20 years! All positive suggestions welcomed!

You should invest in stocks, bonds, and money market funds. You want to buy a diversified portfolio of stocks, as individual stocks are too risky. For most folks this means buying mutual funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low cost funds. If you are like most people you will invest part of your money aggressively in stock funds, and part conservatively in money market funds and bond funds. Vanguard.com has an on-line questionnaire which will give you an idea how aggressive you want to be.

AS your company offers a 401K plan at work, try to invest the most they allow. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea. You can read about college savings plans at savingforcollege.com.

I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, I would suggest putting ~70-80% of your money in the Vanguard Total Stock Market Index Fund. and ~20-30% in a foreign stock index fund. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion

Buying a house instead of renting will save you a lot of money in the long run. You don't have to pay rent and you build equity in your house instead. Buying rental property can also be a good investment. However, being a landlord can be hard work, and many people are not good at it. If you don't know how to handle deadbeat renters, you can have trouble.

If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments.

Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.

Sources:

http://www.vanguard.com/VGApp/hnw/planni...
http://www.dallasnews.com/sharedcontent/...
http://www.fool.com/school.htm
http://sec.gov/investor/pubs/assetalloca...
https://flagship.vanguard.com/VGApp/hnw/...
http://www.savingforcollege.com/

Look into equity indexed annuities. They have really become a great investment tool.

Principal guaranteed
Guaranteed interest rate
All index gains are yours, regardless of future downturns in the market.
Now offering up to 12% BONUS on initial deposit. That increases your $100,000 to $112,000 that starts compounding.

You now have the religion - hallelujah! ;) Money in the bank is not conservative - it is foolish. 5% in the bank -25% (maybe more) tax is 3.75%. real inflation higher so you purchasing power goes down & down. Never been easier to safely invest as options abound. Classic closed ends like ADX & PEO form a solid core. I believe in gold being 3-5% now due to risk so IAU or DGL. EFA & other global index funds solid. A beautiful total return play is SNH - a reit that developes retirement properties which is best sector of RE right now. 5.5% yield + likely 7-8% growth per yr & that is well below what it has been doing. Your solid income gives you the flexibility to take advantage of opportunities. Don't let your mind overrule that flexibility. Through stocks can invest in commodities, currencies, can go for income - don't have to be a sitting duck when market drops but don't have to be a trading fool either. Feel free to contact @ vegas_iwish@yahoo.com with more specific stuff. Can't stop working if $$ does not start. No need for much research - schwab.com fine. Research an excuse not to start today.

Whatever you do, avoid equity-indexed annuities. See these websites:

i think you should start by reading up on books related on "investment." Rich Dad, Poor Dad will be a good start. he did not really teach how to invest but the ways to look at it which i think you might have done when you mention "making money work for ME."

Stock today are difference from the old days when Internet are in play. you can get info with just a click away. You can try Yahoo Finance, MSN Money. which ever you find it easy to understand.

Check what's happening around the world. Feel the market. what sector to look out for now? Interested in any company? Read up on company/s profile, find out how they are doing in the past, what plans it have, who manage it. learn to read up on it Income Statement, Balance Sheet, Cash Flow Statement ROE, ROA, P/E, EPS, EBITDA etc. Read up on world news, events, market sentiments etc. Just remember, all info will only act as a guide and does not really prove to be what it is. Some are past result and some are forecast

Enter into the market is not a problem but one must always plan an EXIT. it 17 years to go before you hit 50.

I personally feel that the market will be booming all the way. Recession unlikely, more of market adjustment. Great Depression will not be happening with China, India and upcoming Vietnam. You might want to look into ENERGY, OIL for now and keep note on what is the demand and supply. (not only on oil)

Cheers

Open a brokerage account at E*Trade and drop me a line.

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