Looking for some investment/savings advice

Question

i'm 20 years old and working as a summer intern. during the year i'm a full time student. i have some savings now and am trying to figure out the best method to begin building savings and retirement funds.

i don't have much money for this purpose since i pay for school, but i want to get started. i would like to know from someone who has experience/knowledge about these things whether it makes sense for me to start saving now. i will need more loans for school, but i can put aside some money.

should i save a little money now or should i start after college? if i do begin saving some money (say $1000) should i start investing in an IRA or should i begin a personal stock portfolio? what other investments should i consider that will either help me with finances in the near future (after college) or in the long-term (retirement money)?

thanks for the help. any advice from professionals or others with experience is appreciated.

Answer 1

Investment ideas require you to spend some time before you decide. There are varius ideas to invest and every ide a has its own advantages and disadvantages. You have to decide which idea to pursue and which not.  

Answer 2

It's never too early to start saving.  In fact, $1,000 is more than enough to start investing with.  When choosing between an IRA account and a personal stock portfolio, you have to decide whether your primary goal is to save for the near future or the long term.  With an IRA, you will be facing penalties if you start withdrawing too early.  You won't have that problem with a regular stock portfolio.  If your money is a little tight right now, I would suggest going for a regular stock portfolio to help pay off your loans from school later.  It's always a good idea to start saving for retirement as early as possible, but I just don't think that's your biggest concern at the moment.

Regardless of whether you choose to open either an IRA account or a regular account, you will need to do your research so you know what to invest in.  There are many great investing books and online tutorials out there.  My personal favorite is Investopedia ( http://www.investopedia.com/ ).  It's a great website to learn about stocks and investing in general.

Once you are ready to start investing, you will need to choose a brokerage firm.  I currently use Firstrade ( http://www.firstrade.com/ ).  They would be a great choice for either IRAs or a regular stock portfolio.  They offer no fee IRAs, so you don't have to pay setup, maintenance, inactivity, or termination fees.  Their commission rates for trading are lower than big name brokers such as ETrade, Scottrade, Ameritrade, and Schwab.  I've been with them for years now and have not experienced any problems yet.  I would definitely recommend them to you.

Firstrade currently has a refer-a-friend program, so if you're interested in opening account with them, email me for a referral code. It's a win-win situation because you'll get your first 5 trades free.

Answer 3

It's never too early to start saving and it's good you're thinking about it as early as now. If you can handle a small amount of money, then you'll be able to handle a large amount of money. That's my first great mistake is that I thought I could jump into the abyss of self-sufficiency without knowing what the heck I was doing and without trying to evaluate if what I was currently doing was the right thing. I suggest that you start reading up different resources -- don't stop at yahoo answers -- read finance blogs, investment blogs, the dummies series even on personal finance -- read rich dad, poor dad, talk to financial consultants from MLM companies (usually the consultations are free because they get huge commissions). One highly recommended reading is "Stop Sitting on Your Assets" by Marian Snow. This book helped me understand money better, it helped me look at my mortgage in a different light, and it helped me make myself my own bank.

You're off to a good start, kid, keep you head up. You have a great financial future ahead of you.