toxict3arz

Now if at all this is not appropriate please remove (just in case).

So retirement is a big issue these days in today's economy.

I have a friend who wants me to start saving for retirement at an early age so I can rack up interest. Great idea!

Please keep in mind I am new to this. (Like many Americans I have heard). From what I hear there are many places we can invest our money. Some of which:
Simple variable and index.

• Simple - regular CD or saving account.
• Variable - 401k - stock
• index - life insurance.

He wants me to invest my money in an index where I have a tax free compound interest with a guarantee min interest and a cap. This means that while everyone is losing money with their stock, I am guaranteed a certain a + interest. But at the same time no matter how well stock does, my interest can only go up so high. (Of course, this is safe judging by today economy).

I hope I made sense.~

My question is, what are some companies I should keep my money away from and your inputs on a safe long term saving. What are things I should keep in mind before investing?

5NIPER_WOLF

I don't know what you just said, but I know I have my money in 3 accounts, A spending account with money for instant access, a Savings account for any extra money to be put there to grow, and an RRSP for University and my Car and my house.

Jason

That is a hard question. I personally believe stocks will go up. It may take a few years, they will rebound. Big companies like Coke, Johnson and Johnson tend to hold their value. You will have ups and downs, but over many of years, you will gain.

CD's. Well. Thats a toughy. I know a lot of people don't like them. They are usually just slightly better then a good savings account in terms of interest and your money is locked up for that period. That being said I think our Lodge has a good take on CDs. They hold 12 CDs. They hold them for one year at a time. One expires every month. So if something happens and they need access to some extra cash it is there.

401ks? If the government steps in like it wants to and pretty much dictates where to put your money, its worthless. If they knew how to make money we wouldn't be in debt. But thats another rant. Also while you may not pay taxes now on the money, you will when you take it out. Bad idea for most people as taxes will only be going up. Something like a Roth IRA may be better where you are paying taxes on the money up front.

Me personally? I would love to move into something like what my Lodge does. 12 CDs one, expires every month. I would put money into some strong companies stocks. If I had money and time, I would buy 5 strong company stocks, in different fields. I would also buy 5 companies that may be somewhat of a risk. Maybe some things like green energy stock, or Ford when it was at $2 a share. Stocks are too low across the board right now to ignore. I would also build up savings in a high yeild savings account. ING used to offer a great interest rate, but it has dropped.

That being said, I'm not a financial expert. Research each option. And always have a backup plan.

asidman

The master has given us his wisdom but no seriously some very good advise there...personally i have invested some money in offshore stock, mostly american actually(), for a while...as Jason said its low now and will rebound eventually...depends how long term we are looking.
I have taken advantage of the drop in property prices a while ago here in South Africa and have done some real estate investments.
The investment definitely depends on the risk and term of the investment. The next factor is timing which you can only learn over time. No use investing in something at its peak.

yustr

The advice to start early is good. But, life insurance is not an investment - its to provide for your family when you die. Think about it. You give a company money. They invest it and promise to give you some of it when you die. But notice they 1) don't promise to give you all of it (principal and earnings) and 2) don't give you anything for many years.

If you're young and don't have a family - don't buy investment life insurance. When you're not young and do have a family - buy term life (probably through your employer). There's a reason they have their names on the sides of those skyscrapers, and its not from giving money away.

The keys as I wish I saw them years ago: Live below your income. No debt. Pay cash. Join your employer's retirement account and contribute faithfully. Anything left after this, buy a low cost balanced mutual fund.