What are investments and how old do you have to be to do them??

Question

I have extra cash from summer work and what could I do with it to invest some money and come out with some more than I started out with!!

Answer 1

An investment is an asset that you purchase with the goal of capital appreciation.  If you are under 18 years of age you will need to get a custodial account.  If you have not immediate need for the money, I would suggest opening up a custodial Roth IRA and putting the money in an index fund within the IRA.  Get a hold of a company likeVanguardd that can help you set up the Roth.   http://www.vanguard.com/

Also, you can review basic investing information at sites like Yahoo! Finance - http://finance.yahoo.com or The Motley Fool - http://www.fool.com

Good luck!

Answer 2

investments simply are anything you would put your money into with the hopes of earning a return. Many investments require a minimum investment of over $500, but you could probably put your money into a CD or interest baring savings account.  

Answer 3

There are a lot of different ways to invest money.

The safest are in CDs (Certificates of Deposit) or Money Market accounts.  These are available at your bank (like Wells Fargo or WaMu) and usually require a minimum opening balance of $1000 or more.  A good interest rate for either of these is anything over 4%.  

If you have less than a thousand dollars or you want a higher yield (something more than 4% interest), you can open an ING Direct savings account, or go to a place like Charles Schwab to talk to someone about a Mutual Fund.

Essentially, any time you invest either you or the institution you bought the product from (a CD, Money Market or Mutual Fund) is buying and selling shares in the stock market.  It's probably a good idea to acquaint yourself with the market, at least a little bit, especially if you have some ideas about which companies you'd like to invest in.

If the company you own shares in does well and the price of their share goes up, then the value of your investment goes up.  If you have a CD, Money Market account or Mutual Fund, the institution that owns the account will manage these shares for you, and you will be paid a fixed interest rate, which will usually be locked for several months, and up to a few years.  This means you can't take your money out until the account has fully matured.  

The best idea is to talk to someone at your bank, since they have a lot of ideas and products to choose form.