How much money should you have in the bank before getting into stocks?

bballkingsrule1

bballkingsrule1

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I am trying to get into stocks and was wondering how much I should put into it to start and how much I should have in bank, to begin going into stocks. How much emergency money should I have etc.

Thanks
 
Don't really know too much in stock but my mom always tells me put 10 percent of whatever you make in your savings Everytime
 
bballkingsrule1 said:
I am trying to get into stocks and was wondering how much I should put into it to start and how much I should have in bank, to begin going into stocks. How much emergency money should I have etc.

Thanks
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No debts

At least 6 months of your monthly bills as an emergency fund..some ppl say 12..the more the better but I think your earnings amount over your bills instead

I've even heard about an additional emergency fund of at least $1000

If you are gonna dabble with stocks..id say make sure u set up your 401k and Roth first
 
The simple rule of thumb is three months of expenses.

Is prob wait till you have at least $1,000 to put in the market before jumping in. You don't want to be paying commissions on a few hundred dollars worth of stock.
 
Some people say six months I only carry more than three months of cash. Cash has no use for me, I have credit cards, margin on my PA if I ever need a cash float and worse comes to worse I just liquidate everything. Cash is pointless to me, you're not outpacing inflation with cash and you're not taking part in the market. If I ever had a situation arise where I needed more than three months of cash on hand I have bigger problems. The biggest yield I've seen on a savings account is 1.05% who has time for that. You can easily beat that.

If you're going to invest I would say you max out your 401k and IRA before anything. The pretax benefits are powerful especially in the 401k. I did an quick analysis of mine a few months ago to determine the delta between raising my 401k contribution and the amount of net cash I would receive in my check and it was de minimus.

And if your objective is truly play the market you can just max out your Ira and do it there. Max out your 401k,ira, then you can think about post tax investing.

I also wouldn't put a dime into a PA until you're debt free and full contributed on a pre tax basis unless you're confident that your portfolio can yield more than the cost of your debt and even then I would feel funny about it.
 
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I use questrade cheapest commission i can find in Canada but if you are in USA there's probably a stock broker in every corner. I would start off with $1000-1500 and remeber that even a 10% return is good enough to withdraw (if you think the stock will go down). Ive been jumping in and out of a stock that rises 3-4% then back down 3-4% thats a nice $90-$100 profit every few days which is not bad for a second income.

In Canada we have 2 accounts RRSP Im assuming its like a 401k in USA, and TX Free Savings. RRSP i can use to also bring my income down to pay lower taxes and Tax Free Savings so I dont pay tax on my earnings from the stocks.

Keep in mind I have bad stocks too and took loses..
 
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Agree with everything Anti said about your Ira and 401k. Having said that, no amount of money in your possession can outweigh the risks of uneducated investing/trading. Spend at least six months to a year learning the ins and outs of the stock market, technical analysis, fundamental analysis, etc. before putting any money on the line.
 
Only invest with money you can afford to lose.

And if you are going to invest, do it with Robinhood.



...
 
JohnnyRedStorm said:
Agree with everything Anti said about your Ira and 401k. Having said that, no amount of money in your possession can outweigh the risks of uneducated investing/trading. Spend at least six months to a year learning the ins and outs of the stock market, technical analysis, fundamental analysis, etc. before putting any money on the line.
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My 401k is 100% in a target fund. I was gonna rebalance back in July then I decided not to. The performance is staggering. I only had a few changes in mind anyways. My IRA is 100% index oriented, my PA is where I do risky stuff and I tax loss harvest all my losers usually in Q4
 
I see so many people trying to get into the market and then quickly backtracking. Guess why?

1) Take care of your money first. Max out your 401k and IRA.

2) The money you wanna use to invest = money you will have no problem losing -- the market does not play "fair"

3) Start off by reading/checking Bloomberg/Yahoo Finance, looking at company financials, etc.

4) Pull the trigger on "safer" stuff after 6-9 months -- indices, ETFs, etc.
 
Stocks are cool and all but I prefer bonds. essentially buying a companies loan/funding yielded me better profit in the long run.

When I invested I had 5000 saved already. I wanted to diversify from the beginning.
 
DonRe said:
Stocks are cool and all but I prefer bonds. essentially buying a companies loan/funding yielded me better profit in the long run.
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That's untrue. Equities yield more than fixed income over the long run.
 
Antidope said:
That's untrue. Equities yield more than fixed income over the long run.
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Never said it didnt. Of course equities yield higher profit as its based on the companies financial value which can keep rising. In my experience, bonds did more for me. Again my experience. 
 
Depends how difficult it is for you to look for work, what your expenses are and how much you can compromise
 
bballkingsrule1 said:
 
Thanks guys. What does maxing out 401k mean and IRA?
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Contributing the maximum amount that you can to those plans.

For an IRA account, the maximum you can add is $5,500 per year (if you're under age 50). For a 401(k) it is $18,000.

401(k) availability is dependent on your employer, but you can open an IRA in a lot of different places.
 
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bballkingsrule1 said:
 
Slighted said:
 
So I'd just recommend jumping head first into the markets.

I run a hedge fund called Gold St. Capital. We have a very low $500 minimum investment. Can I PM you further details?
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Go for it. 
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Sending PM now. You won't regret it. We employ very rigorous leverage to maximize capital explosion.

Also, I'm beginning a start-up that focuses on the state-of-the-art drone industry. I will send you details on that too.
 
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