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Subject:  Re: TSA and stock options Date:  12/4/1998  11:00 AM
Author:  TMFPixy Number:  6987 of 88533

Greetings, Jenny73, and welcome. You wrote:

<<HELP!! I'm just now starting investing for my retirement (I'm 25). I have 5 percent of my earning in a TSA account (stock index 40%; intl equities 20%; and small cap index 40%), and want to increase the amount to 10 % of my annual income. HOWEVER, I have just read "F4 Investment Guide" and am willing to make foolish investments and earn money to use at the same time (dividends?) I don't have a lump some of money, but am considereing continuing with the 5% and start investing in DRP's accounts. Any thoughts or opinions wil be greatly appreciated!!>>

I think it's super you have aimed high for your rate of retirement savings at your age. At the level you're planning, you won't have to worry and should even be able to retire quite comfortably at an early age. Ataloss suggested you read my 13 Steps to Foolish Retirement Planning, and I second that. I also suggest you include the Foolish Retirement Plan Primer. Both will help you as you decide on an appropriate course of action. They may be found at .

I assume you're a teacher or work for a nonprofit organization and that your TSA is in a 403b plan. If so, you're already aware the TSA monies cannot be invested directly in stocks. Instead, stock investing must be through a mutual fund. That means to try your hand at DRPs or other Foolish strategies, you will have to divert money from the TSA. Given your age, you may want to consider a Roth IRA as your first vehicle of choice; however, ensure you have received all possible matching money (if ant) from your employer before you stop those contributions. See Step 4 of the retirement planning guide. As to specifically how and in what you should place that money, don't rush your decision until you're sure. Learn a bit more about our Foolish ways first.

You appear to be fairly new to Fooldom and to investing. That's great on both counts! You have wandered into a forum that believes you, as an individual, can do far better for yourself than most professional money managers. Provided, that is, you take some time to learn a few basic investment concepts and do some self-examination to see where you fit on the risk tolerance scale. Therefore, why not take some time now -- not later -- to be sure about what you want to do. Start first by reading The 13 Steps to Investing Foolishly, which you can access at . They will suggest some important things you should consider. Then I suggest you toddle over to your local library, discount bookstore, or even here in the Fool Mart ( ) and pick up some easily read, easily understood, inexpensive texts that will thoroughly explain how to invest in stocks using some simple systems that will take but an hour per year of your time (if you're slow) yet produce returns that put the majority of professional money managers to shame. I suggest and commend the following to you: "Beating the Dow" by O'Higgins; "The Dividend Investor" by Petty and Knowles; "The Motley Fool Investment Guide" by the Gardner brothers; "One Up on Wall Street" by Lynch; and "What Works on Wall Street" by O'Shaughnessey. All are well worth their low cost and the small investment in time it takes to read them. Get them and read them. You'll be glad you did.

While you're doing all that, also take some time to explore the various nooks and crannies of Fooldom to see what others are doing and what they're discussing. You will find loads of good ideas in the Foolish Workshop ( ) In the process, you'll gain a wealth of knowledge and information that will serve to claify how you want to approach this very personal issue. Don't be afraid to ask a question anywhere in Fooldom. Folks around here are great about answering questions and clearing up misunderstandings.


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