Showing posts with label make money. Show all posts
Showing posts with label make money. Show all posts

April 23, 2011

Mutual Funds

To help you set yourself for retirement, or to have a million dollars by age 35 or so, I'm going to give you a quick education of mutual funds!

Mutual Funds are a wonderful way to prepare for your future, whatever that may be. If you want to have your house paid off, a nice car, and early retirement then a mutual fund is a legitimate and low risk way to do so. If you want to have save a million bucks, simply putting your savings into a bank savings account earning 0.02% interest isn't going to get you there fast enough.

A mutual fund uses compounding interest to help you earn money. I've made a simple video explaining compounding interest:




Now that you know how compounding interest works, it should be fairly easy to decide you want to invest in a mutual fund! As a disclaimer, mutual funds do carry risk and there are several types always do more research before investing.

I'm going to give you guys a glimpse into my fund which I've held since July of 2009:


My first investment was for $1,000 and I originally planned to re-invest $1,000+ every year but it hasn't been good for on the job market lately. However, as you can see even after 3 years I've earned nearly $400 all thanks to compounding interest (and the market recovering!)

There are several ways to invest in mutual funds through financial advisors and online. What I have learned since opening my mutual fund that there is one mutual fund that is constantly returning high % returns and outperforming the other funds, the Vanguard 500. Personally, when I get my next $1,000 I will be investing in that one.
Update: 01/16/24
I no longer own these mutual funds and find they are mostly a bad investment vehicle. Just view the top 10 holdings of several mutual funds and pick 5 of your favorites, then hold. Atleast you can see where my head was over a decade ago at age 20 or 21