Even after working in the SEC for 2+ years in the early 90's I am in the dark when it comes to investing wisely. I am thirtysomething and have no savings and plan to get married this fall. I left my previous employer in March and had about 10,000 in my 401(k), but am now awaiting a new job and wondering what to do with the 401(k). Should I take it out, roll it over to my new employer (when I get one), buy stocks, mutual funds, invest in a Roth account, get a financial advisor, etc...

I need some guidance to lead me out of the dark...

Thanks!

Greetings, kristi418, and welcome. You wrote:

<<Even after working in the SEC for 2+ years in the early 90's I am in the dark when it comes to investing wisely. I am thirtysomething and have no savings and plan to get married this fall. I left my previous employer in March and had about 10,000 in my 401(k), but am now awaiting a new job and wondering what to do with the 401(k). Should I take it out, roll it over to my new employer (when I get one), buy stocks, mutual funds, invest in a Roth account, get a financial advisor, etc...

I need some guidance to lead me out of the dark... >>

IMHO you should do nothing with the 401k money until you gain enough knowledge about investing to be confident you are doing the right thing for yourself. Because it is over $5K, it may stay in your old employer's plan until you decide to move it to an IRA or to a new employer's plan (assuming the new plan accepts rollover money from an old employer's plan).

I assume you're new to both 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 find at http://www.fool.com/school/13steps/13steps.htm. You should also read the articles in our Investing Basics area at http://www.fool.com/school/basics/investingbasics.htm. These missives 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" and "You Have More Than You Think" 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. I also recommend you read my 13 Steps to Foolish Retirement Planning and my Foolish Retirement Plan Primer. Both may be found at http://www.fool.com/Retirement/Retirement.htm , and they will help give you some insight as to what you can do. In the process of all that reading, you'll gain a wealth of knowledge and information that will serve to clarify 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.

Regards..Pixy

Author: kristi418 Date: 6/12/00 1:01 PM Number: 22504
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Here are some questions. If you can answer these, your choice may become self-evident, or you may need to ask more questions.

In your existing 401(k), what is your $10K invested in?

Are you happy with the returns you are getting there, and will your former employer allow you to leave your money there?

What if your new employer doesn't have similar investment options in his 401(k) plan or doesn't even have a plan?

If you decide to roll over into a self-directed IRA, would you feel comfortable investing in individual stocks, or would you sleep better with mutual funds?

Do you have other retirement investments (IRAs, etc.)? How much are they worth and where are they invested?

Now for my recommendations.
1. Stay away from financial advisors unless you feel you are incapable of learning the basics. You can start your education here at The Motley Fool. Start with the 13 steps.
2. If you must (either by edict or choice) get out of your previous employers plan, do a direct rollover to a mutual fund company like Janus, Fidelity, or Vanguard. DO NOT LET THE MONEY TOUCH YOUR HANDS UNLESS YOU WANT TO PAY PENALTIES OR YOU FEEL LIKE DOING LOTS OF PAPERWORK TO AVOID THE PENALTIES. Sorry to raise my voice, but that is very important.

Hope this helps

foolme1111