Aside from a Simple IRA through where I work, and some shares in Create Labs that I've been sitting on for EVER, I pretty much have no idea what I'm doing when it comes to investing. I've got an automatic savings plan with ING, and have been putting some money away for awhile, and its starting to build up :yelclap:

Anyway, I've been thinking more that I should have my "money making money", and was hoping for some advice. I'm thinking along the lines of an income/growth mutual fund that pays dividends. Basically I'm looking for a longer term investment (5+ years or so) but also something that could potentially create some extra income. Are there mutual funds that pay dividends, that could either be reinvested or just paid, that also are relatively stable, too. Like, I'm thinking if there was an index fund (since what I've read so far seems to be the most steady growth over time...what was it, the Vanguard index fund does really well?) but that also paid some dividends, too. I'm not able to put in a whole lot initially right now, but if there was something where I could keep adding some each month, like the ING setup, that would be great.

Whats a good place to find out some about this? At work my IRA is through Edward Jones...should I give them a call and talk to them, or do some research on my own and go through scottrade or something? Other than this forum, is there a good financial resource online? I've looked through fool.com some, but their site seems to more and more be about pushing their "articles" to be bought and whatnot. Thanks for any info!

I highly recommend scottrade, if you're willing to do all your research yourself. They will not provide you with investment advice (they'll *explain* something, but they won't *recommend* anything). Incidentally, Scottrade doesn't charge to buy most funds, and they dont charge to sell most funds that you've owned for at least 90 days. They will also set up your account (if you ask) to automatically reinvest dividends in additional shares of that fund.

As for investment funds, I'm a huge fan of Vanguard's S&P 500 index fund, but really any index fund is roughly equivalent. The key is, understand what the underlying index is and be willing to accept it's performance and risk. For instance, the stock market as a whole has averaged an 11% return over the past 70+ years... in the short term (2-5 years), it's been significantly more volatile than that, but over the long haul (I've got 30 years to retirement, theoretically) it's been very stable... There are indices that try to match the entire market, or a representative sample, or specific industries. For me, the S&P 500 is broad enough, without being absolutely ridiculous... Another critical thing to keep in mind is fees. Index funds have exceptionally low management costs. Other funds are a lot higher as the investment managers are constantly tweaking. Next comes taxes. If it's a tax free account (IRA, 401k, etc), this doesn't matter, but if it's after-tax dollars, you will most likely have to pay taxes based on short term capital gains and losses when brokers do things. If there's a great deal of "churn" in the account, the taxes could *easily* be more than your earnings.

You didn't mention how old you are, what plans you have for the money in the future (downpayment on a house, retirement, wedding, college for kids, etc), or how tolerant of "risk" you are. All of these things should factor into your decision.

Thanks for the advice! I'm 25, and basically just looking to make the best use of the good deal of time I've got ahead of me. I'll do some more looking around, but you're saying that there are index funds that also produce dividends that can be reinvested? Thanks again for pointing me in a good direction!

Think about it this way. If a fund invests in a stock, and that stock is one that pays dividends, it only stands to reason that the fund will pay dividends, right?

No better time to start investing than today. (well, yesterday is better, but you know what I mean)... I've got a 16 year old cousin that's making pretty good money (for a 16 year old), but he blows every penny of it, and then asks why he doesn't have any cash *and* he wants to retire by 40. He could absolutely retire by 40 if he'd start saving now... I commend you for starting earlier than most people ever think about it...

I only wish I had listened to the advice given to me when I was 17. During a high school economics class the teacher stressed the importance of investing at an early age. If only I had started an IRA that same year.

It's not too late now (30) but I certainly would be 100x better off had I started 12 years ago.