Where should young adults put money? in Stocks, Saving Bonds, Roth IRA, etc.?

Question

I turned 18 in May and I was wondering where I should put the extra money I earn from work. I make approximately 6K a year so I don't have much to work with. I would say every 2 weeks I have $50 I can store away. Right now I currently have about $400 saved to work with. So what I am really asking what should I do with what little I have now and then after I graduate from college and start a real job where should I then put my money?

Thanks.

Answer 1

Take the $400 and start a business!

Answer 2

Every thing in life has some risks . if you are ready to take risks for more returns then its stock market for you.

in stocks you will need to know about companies to invest and the sorts which will need you to be knowledgeable about the markets . but there are companies that do it for you and these are called mutual funds . where the company invests in good companies on behalf of you and similar investors . the profits made from these are given back to investors after keeping back some money for management fees and company maintanence.

in order of risk the following are

1) Bank deposits long term - safest but returns are fixed.

2) Mutual funds - choice of selecting risks

3) direct investment in stocks - high risk - almost like gambling .

i would invest in mutual funds as the company has the expertise to handle your investment wisely.

Ask for a mutual fund that having a sip - systematic investment plan. which puts your invesment in stocks in monthly payments . this will not put you in financial difficulties as you do not have to invest in one go and can invest in monthly instalments . ask for the period available so that you can finally get the savings  when you will really need it like when you plan for your house or car etc.

although stock markets are going through a bad phase at this time , it will defnitely show good returns on investment in about 2 years .

also some mutual fund companies have the option of investing in foreign stock markets which will give higher returns than the USA or Indian markets . for example - Brazil.

Good luck with your investment .

Its a very positive thing that someone as young as you have started to think of saving .

Answer 3

It's great that you want to save at such a young age.  Your first nest egg should be Accessible (emergency money so to speak) which most people will need time to time.  So I’d say a bank account with interest or brokerage account with (mutual funds and cash) with minimal fees where your money can be liquidated fairly quickly would be a good start. Once you have about 2K saved…then you can start saving and researching longer term investments IRA (tax deductions and tax free savings) Roth IRA (no tax deduction, but tax free savings) Stocks, bonds, mutual funds…more of a longer term investment strategy…Plan ahead…if your gonna get married how much do want to have available for a home, kids…Once you start a 'real' job always pay yourself 1st (try to save at least 10% of what you bring home.)  If you do that consistently a mere $80.00/week for 40 years with an average interest of 7.5 %/ yr. You would have over a million dollars saved.

Good Luck and happy savings…