If i invested 300 000 in stock market in 2008

Economic Calendar Tax Withholding Calculator. Investing Essentials. You also need to take into consideration taxes, inflation, fees and the health of the economy. If you were savvy enough to get in at the bottom in , you did well. ETF Essentials. In addition to figuring your rate of return over time, this calculator also lets you see how such factors as the economic climate, taxes and additional investments over time will affect your investment.

#1: Investing in stocks is one of many options for investing your money.

On Oct. But that took almost four years. The crash only took 18 months. The Dow opened the year at 12, In fact, they were relieved that the overheated real estate market appeared to be returning to normal. But falling home prices triggered defaults on subprime mortgages. As the year drew to ni close, the Bureau of Economic Analysis revised its growth estimate higher.

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A few days ago, our family was driving to a school event together. My children are naturally curious creatures and so they wanted to know why this host was so worried, and this led into a long discussion about investing in stocks as opposed to investing in other things. After we arrived at our destination, I realized that the conversation we had would actually make for a pretty good article, one that I would have found incredibly valuable a few years ago when we were first learning about investing. News about the stock market shows up on practically every news report you hear on the radio or on television. One could simply keep their money in a savings account, earning a low return with very low risk. One could invest in real estate or bonds or collectibles or precious metals or foreign currency. All of these things have some level of risk involved, offer some level of return, and have varying degrees of liquidity liquidity essentially means how easy it is to sell an item once you own it.

About Returns on Investment

A few days ago, our family was driving to a school event. My children are naturally curious creatures and so they wanted to know why this host was so worried, and this led into a long discussion about investing in stocks as opposed to investing in other things. After we arrived at our destination, I realized that the conversation we had would actually make for a pretty good article, one that I would have found incredibly valuable a few years ago when we were first learning about investing.

News about the stock market shows up on practically every news report you hear on the radio or on television. One could simply keep their money in a savings account, earning a low return with very low risk. One could invest in real estate or bonds or collectibles or precious metals or foreign currency. All of these things have some level of risk involved, offer some level of return, and have varying degrees of liquidity liquidity essentially means how easy it is to sell an item once you own it.

You can even invest in yourself, improving your future earnings potential. You can easily gain — or lose — as much in a single day on your investment as you would gain in an entire year if that money were in something stable and secure like a savings account. Another problem is that you can have periods where there are far more down days than there are up days. So, why would you ever invest in stocks? It takes a lot of years to approach that average. The stock market makes a lot of sense over the long term.

How exactly do you buy stocks? Most of the time, people do this by opening an account with a brokerage firm. When you open an account with a brokerage, you usually deposit some money with them by transferring it from your checking or savings account. Typically, the brokerage charges a fee for doing. In either case, the brokerage will charge you a small fee for each transaction. After you sell your stock, you can just transfer the money back if i invested 300 000 in stock market in 2008 your savings account.

Naturally, different brokerages have very different strengths and weaknesses. Some have very high fees on transactions but will offer a ton of help to individual investors.

Others might offer lower fees but be very hands-off. What brokerage do I use? I use Vanguard. For example, if someone was able to buy in during the Google IPO has made a lot of money over the last decade. That being said, there are a ton of risks. Quite often, those huge success stories exclude the fact that the investor made a lot of investments that completely failed before that big success happened. While stocks can sometimes skyrocket, companies can often completely fail as well which causes their stock to become worthless.

In fact, entire industrial sectors can fall into nothingness over time — remember, typewriter companies were probably good investments several decades ago. Of course, you can invest in a big company to drastically reduce the chance of failure, but that also drastically reduces the chance of big success.

One common strategy that people suggest to reduce risk when investing in stocks is to invest in a lot of different companies at. In other words, even if you invest in an above average stock, the fees will knock that investment down to average pretty quickly. You can reduce the impact of those fees by investing large amounts in a single stock, but in order to that, you either have to be carrying a lot of risk as your chances of losing a lot of your investment is much higher if you own just one stock or have a lot of money so that you can invest sizable amounts in a lot of different stocksreducing the percentage impact of the fees.

Dividends are small payments that companies pay out to each stockholder, usually a small. For each share of stock that you own in that company, the company will pay you some small amount — usually less than a dollar — on a regular basis, typically every quarter.

That dividend money is in addition to the normal value of the stock. Many large investors own enough stock so that they can live off of dividends. Of course, companies change their dividends regularly. They also sometimes just leave them. Dividends are never a guaranteebut they are a really nice perk, especially with a stable company that has a long history of maintaining and raising dividends.

Often, a mutual fund is just a collection of various stocks, but it can include other things such as bonds, precious metals, foreign currency, real estate, and other investments. What exactly a mutual fund invests in and how it is operated is described in a document called a prospectus. One way to get a good summary of the information in a prospectus is to visit a site like Morningstarwhich compiles this information from tons of different mutual funds.

Most of the time, mutual funds are sold directly by the companies that operate. The best way to think of an ETF is as being a mutual fund that itself issues shares which are then bought and sold like any other shares on the stock market. You can buy shares in that ETF from any brokerage.

Index funds are a very simple type of mutual fund that has very low fees associated with it. Usually, they operate by following a very simple set of rules. Index funds are all about hitting the average as closely as possible with as few fees as possible. You should also have a healthy emergency fund. At the same time, I would not suggest investing in the stocks of individual companies unless you can tolerate losing a significant portion of your money and you have a significant amount of time to regularly devote to studying your investments.

This essentially leaves you with mutual funds, and among mutual funds, I recommend index funds. Some employers match your contributions which is something you should not miss out on. However, when you withdraw money from a Roth IRA in retirement, you pay no taxes on anything that comes out of the account. What should you invest in? Many people worry about taxes when it comes to investing.

First of all, you only owe taxes on your gains and your dividends. All you need to know is this: whenever you actually put investment money, whether dividends or money from selling an investment, into your checking account, you should set aside some of it for taxes. I generally urge using the k if your employer offers matching funds; if not, either a k or a Roth IRA is a good option.

If your goal is essentially retirement, use retirement accounts if at all possible. What investments should you choose?

That book will sensibly and thoughtfully expand upon all of the topics presented here while still being very readable and enjoyable. Getting Started Investing. Advertising Disclosure. The information in our reviews could be different from what you find when visiting a financial institution, service provider or a specific product’s website.

All products are presented without warranty. So, What Should You Do? Whatever you decide to do, best of luck to you! Featured on:.

BEN CARLSON, CFA

Auto Loan Calculator Auto Lease vs. Please choose a value. Retirement Savings Accounts. Should you consolidate your debt? If you were mrket enough to get in at the bottom inyou did. Compare Investment Accounts. Buy Calculator Reverse mortgage calculator. In addition to figuring your rate of return over time, this calculator invesed lets you see how such factors as the economic climate, taxes and additional investments over time will affect your investment. The Nasdaq is historically known to track mostly technology stocks. ETF Essentials.