Investing!!!?

Question

So im 18 and I have saved up some money over like the past month..like 650 dollars...I hear alot about investing and stocks..things like that...what is it about??? how do i get invovled? and what do I need to do?? do i need my parents, or can i do it alone?

Answer 1

Hi, I'm surprised that nobody yet has mentioned the obvious -- you should start out with a tax-deferred account -- at least, I'm assuming you worked for that $650.

Start an IRA and put that $650 in there and it'll start growing tax-deferred.

It's great to start at age 18, because you have nearly 50 years to let your money compound and grow. The sooner you start, the more money you'll make.

Even if all you did was put that $650 away now and let it compound for 50 years, you'd wind up with more money than people who wait until they're 60 years old and put $1000s into their IRAs.

But of course, you shouldn't stop saving and investing!

And at age 18 you're an adult legally capable of doing this for yourself.

Educating yourself is fine, but you don't want wait to invest until you have a PhD in finance -- start now. It's not necessary to know everything before you start.

At your age, it's best to concentrate on the education you need to make lots of money. Then to make lots of money AND stay out of debt. And to save/invest lots of money. Too many people spend their time learning all about investments and not enough time making more money with which to invest.

You can't go wrong if you simply put half your money into Vanguard's S&P 500 index fund. That's like investing in the entire S&P 500. Put the other half into Treasury Inflation Protection Securities -- TIPS bonds. They are designed to keep up with inflation. That's more important than you probably realize now. But take a look at current headlines and prices of gas and food. Inflation is now more important than it has been since 1982, and now slowing down.

Reinvesting and compounding your returns is the greatest force in the financial markets. The rest of us are jealous you have so much time on your side. Use it!

best, Rick Stooker

Answer 2

Investing is tricky because you can loose your money. I would just put your money in a bank CD or something where it is secure. This way you are saving. If you want to make more money check out rankfirstprocom/makemoney.html It is a great site to help make some extra money and you wont loose anything.

Answer 3

Dont listen to these people that say save your money.  It takes awhile to get the hang of things but if you learn now it can really pay off in the future.  $650 is enough unless you are buying Berkshire and Hathaway which is a rediculous amount for one share.  To get a stock you have to sign up with a brokerage account. Ex: Fidelity or Etrade.  Fidelity is kind of expensive if you dont have a certain amount of money to trade so I would probably recommend Etrade which is a lot cheaper to trade your stock.  You can make an account on their websites.  You will have to pay capital gains taxes if you make money so unless you already do your own taxes you might want to let your parents in on the idea.  Everyone is so afraid of investing by reading a lot of comments and it doesnt make sense.  Almost no stock will go down 100% in one day (the rare examples are Bear Sterns and obviously Enron.)  People are willing to go to Vegas and put a ton of money in the slots which you are putting your money at the hands of a machine.  In investing you will gain or lose money over a long period of time and if you learn it then you can get really rich at it like Warren Buffet did.  I learned (still am learning) to invest by using IBD (investors.com) I will say its a pretty penny to sign up but the site gives you access to graphs, stock checkups, and tons of articles about investing every day.  They also have a stock analysis once a day where they pick a stock and take you through the steps as to why that stock may go up.  The stock checkup is where they grade every stock out there based on earnings, how much it has gone up/down, and what it has done compared to other stocks in the category.  They also give you the top 5 they have ranked for that category you put in.  Once again, its a pretty penny for the subscription but its worth it.

Answer 4

Before you start investing, make sure you have the basics covered.

Out of debt (credit cards, car loans, student loans)

6 months expenses cash in the bank.

Once you have that, then you can start investing.

A single lump sum of $650 is not enough to start with stocks, but if you put $300/month for 20 years, that's plenty.

Answer 5

Check www.wallstreetsurvivor.com

The site above will help you understand more about stock trading.  It is a simulation of Wallstreet.

Read "Who Moved My Cheese?"  You can finish it within 1 hour.  It is a very short book.

Read "Rich Dad Poor Dad."

Before you invest, research more.

Answer 6

Investing has a reputation for being risky, but very lucrative in some cases.  If you're serious about investing there are a number of different places you could sink your money into like stocks or mutual funds or real estate or bonds.  Investing is about getting high returns, at least that's the goal, but not everyone gets more money than they invest.  Sometimes they lose money, this is something to think hard about before investing.  

Before you go off and spend all that hard-saved cash investing, you should research (beyond this forum) there are loads of books and websites devoted to educating eager investors like yourself.  

Traditionally, mutual funds are less risky because it is a collection of many investors and the manager makes a number of different investments.  This is called diversifying your investment.  Stocks are generally more risky as they are a single investment that may fall or increase.  If you do invest in stocks, you should diversify by creating a portfolio of different stocks and maybe go beyond by adding a mutual fund.  The goal of diversification is to reduce risk so that if one investment falls the others will balance it out.

To buy and sell stocks there are a couple different ways, one is through a broker (you may want to bring along a parent so you don't get roped into anything you don't want) but there is a fee for their services.  A way to reduce these fees is going through an online trading site, like Etrade.com.    Investment guides will help you find which indicators to follow when selecting your investments.  If you prefer you can hire a consultant who will research these investments for you.  

Your parents, or any other knowledgeable person could help you in the beginning but with enough research you are capable of investing that money however you like.  

Of course, I am not telling you to do anything with that money, there is real risk with investing.  But if you are interested, many people increase their wealth through investing and love it.  There are many trained experts who work everyday to make money investing, and unless you have that kind of time, investing can be a hard and risky way to make money.  I hope this was a helpful introduction.

Answer 7

I think you keep your 650 dollars as your pocket money for future or emergency use. Keep less than 100 dollars in your pocket and go for bargain hunt for extra good deals for your personal and family (your family member, such as parents, brother or sister). You should ask advice from your parents in this risky deal. I personally know many Hong Kong citizens have become flat broke (without much savings), they are all losers, and have lost from 10k to millions of Hong Kong dollars in the past two years. I am living in the international capital of scams of real estate and stock market transactions and know all about gambling is not good to all normal peoples.

Answer 8

This "INVESTMENT GUIDE" is more helpful for you to make your money to make money for you,without taking any risk.

To gain more information ABOUT INVESING & STOCKS,just gothrough the site

http://www.savings4future.com .........

GOOD LUCK