chat
expand_more

Chat with our Pricing Wizard

clear

Industry News and Information

The Automatic Soldier

dale olson Avatardale olson
July 31, 2006


Before you leave for Basic Training you will fill out lots of paperwork. The best piece of advice I could give you is to create your own investment account and savings plan now while you are home. Here is why.


While in basic training and advanced individual training (AIT) you will not need to spend lots of money, if you spend any at all. The money that you are being paid while in training is going directly into your bank account. Depending on the type of bank account you have, you may not earn that much as far as interest goes, if any. The key to success is to automate everything; this will help you to stay disciplined in your savings and investments.
A really smart idea would be to set up an account with Sharebuilder.com before leaving for training. ShareBuilder is an online brokerage designed to make investing easy, affordable and accessible for both beginning and experienced investors. With the ShareBuilder Plan, you can invest regularly through automatic investments, allowing you to buy partial shares of stocks and accumulate your investments over time.
You can schedule automatic investments either weekly or on a monthly basis. Setting yourself up to automate your investments is key. You want to be “The Automatic Soldier”. The reason I say this is because you won’t have to remind yourself to invest in your plan. Chances are if you do not set yourself up to automate your financial plan, you will come to a point where you will say “Well. I will do this next week when I have time.” Eventually you will stop and give up your initial plan of investing.
My advice would be to sign up for the Sharebuilder Basic program with no subscriptions fees and only $4 per automatic investment. I would start by choosing one or two good companies to invest in. I will provide some resources below to help you. Think of some companies and products that use in your daily life. Write them down and try to have a starting list of 10-15. Use the resources below to look up information on your choices. Out of your selections find out which ones pay a dividend. You will want your one to two stocks to pay a dividend. This means that for every share you own, you are paid a portion of the company’s earnings. Within your Sharebuilder account you can select to automatically reinvest those dividends or have the money go to your cash balance. I would opt to reinvest them.
After awhile your stock purchases will add up. Now investing does have some risk, but equally it has some rewards. Make sure you do some research on your stock picks. Stay away from penny stocks. Later on when you have more experience and you want to try buying and selling penny stocks you can. For now though, you want to start building up a good, sound, diversified portfolio. Sharebuilder also has lots of tools within your account that can help you. To be diversified, you will need more than your one or two stocks. For now you will want to just start working towards building that portfolio by choosing the one or two investments. Later you can add more.
If you find that investing in stocks is not for you, Sharebuilder has an option of buying ETFs (exchange traded funds), which are are like stocks allowing you to buy and sell, but typically safer like Mutual Funds.
Mutual Funds grow much slower, but I would advise buying into one at a later date, especially the Fidelity Freedom Funds. You will need to find a different investment firm that handles Mutual Funds. A good resource for this would be Vanguard or Fidelity.
Please note: this is just my advice. I am not a broker or financial consultant. I am only offering up a suggestion and starting points for you to further research into on your own. I am not associated with any of the sites in any way, nor am I paid by any of them to suggest using their products or services. These are sites that I companies that I use in my own life and can honestly recommend them as a good resource.
HELPFUL RESOURCES
Broker Accounts
http://www.sharebuilder.com
http://www.fidelity.com
http://www.vanguard.com
http://www.scottrade.com (no automated investing, but has low priced trades)
Research Resources
http://finance.yahoo.com
http://www.smartmoney.com
http://www.thestreet.com
http://moneycentral.msn.com/investor/home.asp
http://www.morningstar.com
Books
David Bach – The Automatic Millionaire
Jim Cramer – Insane Investing in an Insane World.
Any of the Investing for Dummies titles. (I started here and learned a lot)
* I highly recommend the books from David Bach and Jim Crammer. They have been valuable resources to me in my own life. Jim Cramer also has a great investment show on CNBC, 6 PM, 9 PM and Midnight.

Related Articles

No Related Posts.
View More Articles