THE ROOM OF RETIREMENT: Investing & Retirement EXPLAINED!

Investing and retirement accounts are great ways to make and save money. But what the heck IS a 401K, or a stock or mutual fund or dividend?! Let's learn how to fill your Gringotts vault just like Harry Potter! Support How to Adult on Patreon at http://www.patreon.com/howtoadult HOW TO ADULT Posters Now Available from DFTBA Records! http://store.dftba.com/collections/how-to-adult Merchandise from Mike (including "Reading Changes Us" and "Everything Not Saved Will Be Lost" posters!): http://store.dftba.com/collections/t-michael-martin VIDEO LINKS: Compound interest calculator: http://www.moneychimp.com/calculator/compound_interest_calculator.htm Info on average stock market returns: http://www.moneychimp.com/features/market_cagr.htm Info on retirement account fees: http://www.bankrate.com/finance/retirement/take-steps-to-curb-retirement-plan-fees-1.aspx Roth IRAs vs 401(k)s: http://time.com/money/3404604/401k-roth-ira-max-out-first/ ; http://www.bankrate.com/finance/retirement/roth-ira-beats-401-k-in-key-ways-1.aspx "How to Adult" is a "life skills" edutainment channel brought to you by Executive Producers Hank Green and John Green. Subscribe for new videos every week! Tumblr: http://learnhowtoadult.tumblr.com Twitter: http://www.twitter.com/learnhowtoadult Facebook: http://www.facebook.com/learnhowtoadult Created by: Emma Mills & T. Michael (Mike) Martin http://www.youtube.com/elmify http://www.youtube.com/tmikemartin Mike is also a Young Adult novelist. His book, THE END GAMES, is available at all online booksellers, including Indiebound (http://www.indiebound.org/book/9780062201812?aff=tmichaelmartin ) and Amazon: (http://www.amazon.com/gp/product/0062201816/ref=as_li_tl?ie=UTF8&camp=1789&creative=390957&creativeASIN=0062201816&linkCode=as2&tag=tmicmar-20&linkId=CF4ULRBEW6LATV3C) Written by: Alan Lastufka & T. Michael Martin (alandistro.tumblr.com) Directed by: T. Michael Martin Edited by: Nathan Talbott (http://www.youtube.com/nathantalbott) Executive Producers: Hank & John Green http://www.youtube.com/vlogbrothers

Comments

1. We watched this in class and it scared us.
2. No taxes until you start withdrawing but there are company FEES. Right. Why don't I just bury my money in the fucking ground???
3. Four-oh-one-kay? You mean a four-oh-wunk?
4. I wish I was told (or helped on my behalf) about Bonds and things when I was 16. I inherited some money from my grandmothers death teats been sitting untouched in an ISA for quite a few years at this point - I'll look deeper into a better place to use.
5. MMMM... Compound Interest!
   Tasty!
6. This is so helpful...
7. How to make money like Harry Potter:
   Have rich parents who get killed by an evil wizard.
8. If you are investing your retirement account in stocks and want it to grow, there's two urgently important steps I recommend that it seems most people skip:
   
   1) Research!  Pull up their financials and look them over.  Do they have a lot of long term debt, and if they do have some are they paying it down or is it going up over time?  Are their uncollected accounts receivable just a small portion of their sales or are they having problems getting paid?  Do they have good cash flow and are they reinvesting profits into growing the business?  Are the executives and board members invested in the stock or have they been selling off their shares?  All of these will give you some indication of how well the company is managed and it's potential to continue to grow your investment.  Perhaps most important: do you like the way this company does business or are they evil jerks?  If you wouldn't want to be a customer or work for the company then you probably shouldn't put your money there.
   
   2) Pick your sell points!  Stock prices have ebbs and flows like a tide.  Buy-and-hold is a reasonable way to maintain value but it's not the way to grow your investments.  Everyone knows to buy low and sell high but most people make the mistake of not picking their sell prices when they buy the stock.  Most people will hold onto their stocks way too long and either they lose a large percentage of the value they had gained when it peaks and starts to go back down or they lose a large part of their investment when it drops but they hang on just knowing it'll go back up.  When you are holding on too long you are missing out on the thousands of other companies you could be invested in instead.  The way to avoid this is to pick a high sell price (up 10% to 20%; no need to be greedy here) and a low sell price (down 10% to 20%) at the time you make the buy.  The lower the percentages the less the risk, but if you buy and sell too often you'll lose more to the transaction fees so be sure to balance that factor into your decision.  And once you've sold the stock - high or low - don't look at the price of it again for at least six months.  Obsessively following it when you no longer own it will just give you unnecessary aggravation those times when it makes you feel you sold too soon.
   
   Following these steps for most average investors will mean making a transaction to shift money from one stock to another about every three to six months.  You don't have to follow the prices every day; glancing at them once a week is usually enough especially if your brokerage allows you to put in 90-day open orders to sell for you if the stock hits your sell points.  And then just two or three times a year you'll need to make some time to look over various companies until you find one you like enough to be your next investment.  But that little bit of time will make a huge difference in the value of your portfolio.
9. Do one on buying a house!
10. I actually just started my first grown-up job and they were all like "Hey!  Here's some people we would support you getting a retirement account with!  Now moving on to signing your life away."  They gave absolutely no instructions on how to start or anything so at least now I'm not going to go into this blind!
11. This video and your videos on taxes have been super helpful to me lately as my father recently passed and I've had to help my mom figure out all the financial stuff he had going on as well as start my own adventure into jobs and taxes and other unpleasant adult things.
12. You should explain to people the percentage of their income they should be saving for retirement based on a few broad age groups. It's great to open an account to save for retirement, but if you only put $500 in it and call it a day, you are going to have a hard time living for a few decades (idealy) on $500. 
13. what perfect timing. I was just about to open a Vanguard tomorrow. and probably still am.
14. Oh bother. Thanks for this! 2015 will be my first year of having real grownup job(s) which means starting out on the right track with budgeting and investing and all those things that are as understandable as wrackspurts. Definitely saving this video! 
15. MORSMORDRE.
16. Actually guys, for young adults, it's smarter to roll your money into a RothIRA. This is for a couple reasons:
    1) Young people will probably be changing jobs a lot, but you can't usually take your 401(k) from one job to another, and in fact they might actually charge you a fee to keep it for you after you leave a company.
    2) You'll be taxed for whatever you put into it, but as a young person, it's likely you're in a small tax bracket. You'll save money buy paying taxes at these lower rates now, than when you're 60 or 70 and taking money out of your retirement account, when you're in a higher tax bracket.
17. money always seems kinda pointless among the wizards in harry potter. was there some rule that any sort of trade with muggles was illegal, because based on many of the things that folks have (like brand name cars that have been modified with magic) there wasn't much restriction there. lets say you own a chunk of land that can grow trees and are a wizard, you grow a bunch of trees fast with magic, make another spell to mill those trees in a few hours, sell the lumber to muggles, buy gold, poof, lots of money you can take to gringotts. i just never understood the idea of money for the wizards, actual trade of course makes sense, but money seems kinda meaningless for them.
18. Thank you for making this video! I am currently figuring out my retirement fund, so this was perfect timing! 
19. What?  No catchphraseless catchphrase?