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Phillip Said:

Is investing in the stock market a good idea to make a living from?

We Answered:

What you can do depends on how good you are. If you aren't good, then you are gambling- and that's luck. Given the hype and cons always around, it will probably be bad luck. If you can't do it well, don't do it.

Complicated game- requires knowledge, skill, instinct- and money. To make a living doing it as an employee of an investment bank requires the skill to manipulate and grow other peoples money. To make a living as an individual investor requires you have your own money. You make that money in some fashion, start investing and make it grow. You leave all the gain in, so there will be more growing all the time. When you have $1000 and your investment doubles, you gain $1000. But when your investments are worth $100,000 and they double, things start moving fast. The skill is knowing when and how to move your positions so that trend will continue- but you don't take any out until it's a large enough that is won't shrink when you do, or will keep growing. How long that takes depends mostly on the times (opportunities are always changing) and your skill. You will not take a small amount of money and create a cash flow of any consequence any time soon.

I could now make a living from investing, but I have built portfolios worth 700K. The recession was an exceptional opportunity to multiply money, I have stocks that are worth 20 or more times what they cost me two years ago. I still take nothing out, because my everyday source of income meets my modest needs. Others who started at the same time I did (10 years ago) with the same money (10K) but failed to make the right choices probably have about 10% as much gain to show for it.

How you invest must match your ability and risk tolerance, as well as your nervous systems limits. Investing is unlike any other skill I know of, and I know many. Education and books get you started, but what really makes the difference in an average investor and a good one seems to come from how your mind works, almost like a genetic thing. Some are cut out for it, some are not. I'm fortunate in that respect.

I would suggest having an IRA for an investing base to grow financially stronger, but not expecting it to be a source of disposable income. For that- learn more valuable skills, or become a star performer in what you already know, thus be worth more money and probably get promoted. You would be surprised what a difference that alone can make in your value to an employer. Rare quality these days.

Marc Said:

what is the best way for a widow (age 40-55) to make a $500,000 life insurance last her life time?

We Answered:

Appoint a trustee to administer your estate. Or establish a living trust now.

I would also think if she had no mortgage payment 1000 -1500 per month would be ample to live on.

Examine the tax advantages of her paying off the mortgage verses paying over time.

Have her sit down with a financial adviser so she understands where the money is going and why.

I am assuming you have no minor children that would require higher education funding.

I am also torn on whether you are very sweet and caring or trying to control her from the grave.