Welcome to Craig O'Connell's Blog

Providing insight for young working professionals since 2013.

Just landed your first full-time professional job?
Been working for a few years but haven't contributed to your 401(k) yet?
Want to retire as a millionaire?

Look no further.

Three great choices in mutual funds that are great for young professional's just starting out, looking fo invest for long term growth and returns.

Article Source : http://investorplace.com/2011/09/20-somethings-millionaires-mutual-funds-to-buy/view-all/

Vanguard Target Retirement 2050 Fund (VFIFX)

So-called “target-date” retirement funds are great options for young investors because the risk level of your investments is automatically adjusted for you over time — without the need for younger investors to move money around on their own or perform exhaustive research. The Vanguard Target Retirement 2050 Fund (MUTF:VFIFX) is perfect for 20-somethings looking 40 years or more until retirement because it is aggressive at first and gradually becomes conservative as the retirement “target” of 2050 approaches.
The big downside, of course, is that if you plan on retiring early or late, this cookie-cutter approach might not suit you. You have to be comfortable with the “target” of this fund when you buy in, since that ultimate goal drives all the decisions.
Also, the VFIFX mutual fund is a “fund of funds,” meaning it actually is comprised of other mutual funds and not individual stocks or bonds. There is a risk of redundancy this way — or a “too many cooks in the kitchen” approach — because there are many managers for these disparate investments. Then again, if all those folks are doing a great job, it might be in your best interest to share in the success of a few different strategies.
The fund has a minimum buy-in of $1,000, which is the lowest in the business. Read more about Vanguard’s fund here.

Schwab S&P 500 Index Fund (SWPPX)

If you are planning decades ahead, it’s probably because you believe in the wealth-building power of the stock market. That is, that in 40 or 50 years from now there will be a significantly higher value for most stocks — and that picking individual winners is less important than just riding the rising tide.
But which so-called “index” fund should you buy? Fidelity has a number of great broad-market funds with low expenses, for example — but a $10,000 minimum investment is required. Not exactly accessible to 20-somethings.
That’s why Charles Schwab has a real winner with its Schwab S&P 500 Index Fund (MUTF:SWPPX). The minimum buy-in is $100 for your initial purchase. And with an expense ratio of a mere 0.09%, it’s not like your funds will be eroded by costly management fees, either.
Tracking the market is maligned by some as a lowbrow way of investing. But in 40 years the S&P is up 1,110% — meaning that $100 buy-in would be $1,210. That’s pretty powerful. Imagine if you continued to invest across your early years, too, with $100 here and $100 there to supplement the fund.

Fidelity Small Cap Discovery Fund (FSCRX)

If you want to get a little more pop in your retirement fund but don’t mind taking on a bit more risk or paying a bit more in fees, the Fidelity Small Cap Discovery Fund (MUTF:FSCRX) is a great choice.
This investment seeks out the top small companies that have big-time potential. Unlike a big fund that contains S&P 500 components, the companies in the Fidelity Small Cap Discovery Fund likely are stocks you haven’t heard of — yet!
The profit potential of this fund is obvious. Think about the money you’d be sitting on if you could have invested in Apple (NASDAQ:AAPL) or Microsoft (NASDAQ:MSFT) way back when they were small-time companies. Of course, the reverse also is true — that some of these small companies will struggle along and eventually fail.
The expenses are bigger on this Fidelity fund because the manager’s research and active role is much more important than an index fund that just moves in lockstep with the market. But manager Chuck Myers has been running the fund for more than five years — since March 2006 — and has a track record to back up his leadership. With an annualized return of more than 7% for that period while the Dow Jones is largely flat, you can see the power of this strategy.
The downside is that when the Small Cap Discovery Fund falls short, it likely will hurt. And a $2,500 buy-in also makes it out of reach for many small-time investors just out of college. But if you can scrape together the cash and can handle the volatile ride, FSCRX could be a great mutual fund for early investors during the next few decades.



Buying VS. Renting, what should you choose?

After renting for a few years, you're tired of paying rent and receiving nothing in return. Is it time to buy something? Read the following for some great insight.

Article source: http://www.huffingtonpost.com/toni-haber/buy-renting-apartments_b_1400127.html

If you've been looking to rent an apartment recently, you might be experiencing a little sticker shock. Seven grand for a two-bedroom on the Upper West Side... Really? Really!!

As you may have read in previous blogs, the rental market has seen some significant increases over the last two quarters. This has prompted a lot of renting New Yorkers to ask themselves the obvious question: "Could it really be that much more expensive just to buy something?" Buy versus rent: what should you do? I've been getting this question a lot lately. Well here are some facts and some food for thought.

The question becomes easily answered if you don't have a down payment: renting is the way to go. However, if you do have a down payment and a job (what a concept), I would without a doubt recommend that you buy.
Let's use $1,000,000 as our example. It is common in New York City that you will be required to put down 20 percent ($200,000) to 30 percent ($300,000). This scenario would leave you financing $700,000 to $800,000, figuring a 4 percent interest rate (you may be able to do better in this market, depending on the particulars of your deal, but don't quote me; talk to your friendly neighborhood mortgage banker for all the details). Your monthly costs on that would be approximately $3,350 to $3,820 per month. You can play with the numbers or plug in your own scenario here. Then you have your monthly common charges and real estate taxes (for condos) or your monthly maintenance (for coops). This will run in the ball park of $1,000 to $1,500, which brings your monthly payments to approximately $4,350 to $5,320 per month.

Depending if you have a doorman or not, an elevator versus a walk up, a view versus no view, and if the apartment needs renovation or is move-in ready and a COOP versus a condo, (more on that in next week's blog so stay tuned!), this price range will generally buy you 800 to 1,100 square feet. A rental of that size could run you $4,500 to $6,000. Don't forget, the added benefit of owning is that all of your mortgage interest and real estate taxes are tax deductible, plus your home will mostly be your largest appreciating asset, which is true even more so now since the bubble burst and you have low prices and historically low interests rates.

Interest rates should stay at these historical lows for at least the rest of the year, possibly through 2014, Chairmen Ben Bernanke said recently as he's been trying to temper people's enthusiasm on the seemingly improving economy. It is clear the Fed understands that raising rates too soon could be detrimental to the fragile recovery.

Specifically in New York City the rents are rising and the prices are flat. Once prices start increasing, I feel they are going to move upward fast. Buying a home is kind of like buying a stock; you have to get in at the right time. Don't you wish you had purchased Apple stock a year ago when it was trading under $350? (It's over $600 today, FYI.) There is no better place to own real estate then New York City, so jump in now. The rest of the world has! We have more international buyers than ever before. So, If you think you can't own in this city, think again. Consult some experts! (A knowledgeable real estate broker and mortgage banker.) They will give the benefit of their knowledge for free! And you'll know exactly where you stand.