Investing with little money?

Question

I am going into my senior year of college, and i'm currently doing an internship for the summer. At the end of the summer, I am going to have some money sat aside for investing. I am wondering what would be a good type of investment. Stocks, real estate, etc. I know i won't have much to invest, but i'm eager to get started. Any suggestions will be greately appreciated.

Answer 1

Consider your horizon and long term plan for your funds.

Answer 2

Endowment or Whole of Life insurance policies. Capital is minimal. Some offers short term premium (payment terms), some offers long. These 2 insurance policies offers cash back or maturity value or surrender value. Capital is guaranteed, if you finish the premium term.

The interest generated from there might not be attractive, but it's after tax money and risk free.

Answer 3

When you don't have much money to invest.  Then you either have to invest your money for a very, very long time.   Or you have to use leverage to amplify your profits.

When you trade stocks and other securites.  There is usually a fee you have to pay for the trading service.  And when you have a small amount of money, then paying these fees often makes your investment and trading unprofitable.  That's why  you have to invest only once, pay the fee, and avoid doing anything else with your investment for a long time in order to avoid paying any more trading fees.

It's possible to use a small amount of money to borrow ten times or even a hundred times as much as your original amount and trade with borrowed money in order to make many times more profits than you could make with your own money only.  Futures and Forex Currency trading companies usually let their customers borrow a lot of money and trade with borrowed money.

But you have to remember that trading with borrowed money can amplify both your gains and your losses.  And it's possible that you might end up owing more money than you've orginally started with.  In other words if you borrow ten times the amount of money you have.  Then you can loose 1000% of your money.  Which is ten times worse than loosing 100% of your money.

You can learn more about financial markets and investing at this website:

http://www.investopedia.com/beginner.asp

Answer 4

Start by educating yourself - "Investing For Dummies" is a great starter book.  You might want to start with a good no-load mutual fund - that is less risky that directly investing in stocks.