16 yro wants to spread his money across different investments like an IRA, CDs, Money Markets, etc good idea?

Question

16 yro wants to spread his money across different investments like an IRA, CDs, Money Markets, etc good idea?

I have a checking account, and a savings account and I want to save up for a $500 CD account for short term because of the CRAPPY rates. Then I want to save up $1000 from my checking account and use that money to open a Money Market account with minimum of $1000. With the $500 CD there will be no monthly service charge and the $1000 Money Market too will have no monthly service charge.

1) so not wasting too much of your time I would like to spread my money around different investments like an IRA, CD, money market for college.

BTW I can't use online banks because my parents wont let me use em. Im stuck with my local bank for now. Im 16 living in USA if any one asks.

BTW. I have earned income from a job...

Answer 1

When I was like 14 I put $2500 in a CD so that when I turn 17 I'll take it out and have more money for a car.  That's just what I did...

Answer 2

Good for you!  It is good to see someone trying to put their money to work.  Yes, you would do well to avoid online banks for now.  The people at your bank will get to know you.  You tell them what you are trying to do, and they will give you advice.

It is good to start an IRA, but don't put more in it than you can spare.  You don't want to take it out until you are old and gray, when it will have generated lots of income.   College is your short term goal, and you will need plenty of money for that.   You might consider 2 years at a junior college first, then transfer to a university to get your degree.

When buying CD's , consider when you will need the money.  

If you can tie up the money for a year or two., you may get better rates  than a 6- month CD.    When a CD matures, you can always buy a new CD if you don't need the money for a while.  Your money market account probably earms more interest than a savings account, but may have minimum balance or transaction limitations.  So keep some cash in the savinsgs account for ready access.

Good luck, young man!

Answer 3

wow, i wasnt thinking about this when i was 16. i just spent my money on useless things. is warren buffet your idol?

Answer 4

it's a good thing that you are already thinking about such but i think that the best and safest way for you to do is to just let it stay there in the bank. A $500 CD and a $1000 Money Market account may not have any service charge but the amounts are also very small that the returns that you get for investing your money in a CD and money market account is also small.