Now or later?

Question

I'm going to be high school senior this year and I was thinking about investing for the long term. I have $500 to start and I can contribute at least 80 to 100 a month. Should I get in now or should I wait for the next summer(before college), get a job and open a Roth IRA for the tax benefit? By the way. I'm 18. I have been reading books about investing and money management.

Answer 1

You don't need to have a job to open an IRA, although the minimums on a lot of mutual funds may require you to have more money to get started.

I say start now with dollar-cost averaging.  The market is down and now is an absolutely fabulous time to buy in.  The SP500 is down 16%, so you are basically getting a 16% discount on an index fund/ETF (IVV for example).

For starting out with small amounts of cash, I recommend sharebuilder.com.

If you want to do automatic investing (automatic withdrawal at a set time each month), the commission is only $4.  This is a great way to dollar-cost average and begin to build wealth.  Real-time trades are only $9.95 as well.  

I believe sharebuilder does have IRA and Roth IRA accounts available as well, although I don't know if there are any criteria you have to meet to open them (other than age).  Having a job should be irrelevant because employer plans are 401ks, not IRAs.

Good luck!

Feel free to e-mail me.  I started investing my junior year in high school (I'm now almost a junior in college), having other young investors to talk to would always be nice.