Invest now or later?

Question

I'm going to be a high school senior. I just opened a brokerage account. I'm ambivalent about whether to invest now with 300 and add 100 each month, or wait until next year to get a job in the summer before college and invest in Roth IRA because of tax benefit.

Answer 1

Trade a " leeetle" in your account...add to it...learn the ropes...learn your " style".... BUT be ready before next Apr to get that ROTH going...by then, you will know what kind of thing to put that money into... whether to let it ride ...or move it around occassionally... you may want to keep the brokerage account ...or strictly trade/invest all under the cover of the ROTH. One way or the other...get it rolling and have a nice chunk working for you as your income finds other places it has to go...education, spouse, family, house, etc.  No matter what, you'll have that "chunk" ( hope it's a nice one) working for you.

Answer 2

Now, now, now, now... NOW.  

Did I mention now?

Absolutely begin immediately. First off, you should employ the strategy of "paying yourself first." That means that any income you bring in, you should chop a percentage off the top (10% or so at least) and put it somewhere you can't get to it.

Definitely work on your IRA, but don't be afraid to start buying equities. Just don't attempt to become a "trader." Do some DD, and start building positions in some quality companies. Use a company like Sharebuilder.com that allows you to invest gradually, in small amounts...  even automatically.

Another good reason to start now is that the market is getting beaten up. Visit MotleyFool.com and get an idea what compound interest can do for you over a 10-20 year period. (Or more.)

Take it from a guy who's 40. You'll be here before you know it, and you'll be light-years ahead of the game if you start amassing some investment capital now... and leave it alone. Don't pull it out to buy a boat or a motorcycle or a wedding ring!

Good luck.

Answer 3

A Roth IRA should be your first choice if you can put it away for a long time.