Im only a kid, but should i start investing?

Question

I may be small, but financially, i am very smart. i have been thinking if i should invest at least $2000 into the stock market and by the time i retire, i will be a millionaire due to the fact that the stock market grows 10% every year. is it smart, or is it to soon?

Answer 1

No, actually I wish I had invested sooner; I'm 17 and if I had started when I was younger I could have had a lot more money than now. Plus, if you invest your money you're less likely to spend it. Then it turns into more money.

I'd recommend splitting the money up. Take half and split it up into several different mutual funds with different time limits, from one month to 5 years. When each one of those matures put it to the opposite scale; when one month matures, put it into a 5 year. When a 5 year matures put it into a 6 month. You need to go to your bank to do this (have your parents open a joint savings account for you).

With the other half put it into stocks and ETFs. Use money.msn.com to find out about stocks; there's a couple parts about investing with small amounts of money. After you feel confident that you won't lose money and know how to choose stocks, go to www.sharebuilder.com and have your parents open a custodial account. It can be linked to either your bank account or to your parents' account, and you can give them the money to transfer into your sharebuilder account. Then start up a sharebuilder plan and have it invest all the money the first month in a variety of stocks/ETFs; cut it off after the first month. When you get more money, invest more. After a while, with this plan, you'll get the pleasure of seeing your money turn into more money.

Of course, since you're a kid I recommend taking some aside and buying something for yourself. Take $100 dollars and get something fun; money is important in life, but being a kid is too. I think I missed that part of my life, and I can't have it back. Go have fun, but also watch your money grow. Enjoy yourself, and good luck!

Answer 2

It's never too soon. With compounding returns the sooner you start the better.

Just make sure that this is money that you won't need anytime soon. If the stock markets goes down for a while your $2000 initial investment may end up being a lot less. If you can leave it there for the long term (like say 10 years or more) then based on the markets' past performance you should do pretty well, especially if you can put away a little bit every month.

Be sure to do your research and be sure that you are okay with watching your stock market investment go up and down in the short term. if that is a problem for you then you may want to look at some guaranteed investments through your bank.

Answer 3

You sound like a very smart kid! Yes it is a very smart thing too start investing when you are young like you are! But before you start investing you should think about opening up a savings account somewhere like www.ing.com, putting at least hafe of your $2000 into a savings account there and not touching it and then taking the $1000 you have left and dividing that in half and putting $500 into a mutual fund at someplace like Edward Jones and selecting an American Funds mutual fund its minimum investment is $250 to start one and they usualy have a low expense rate. With the last $500 you can open up a stock account at www.sharebuilder.com and buy stock with it.

Just remember when you come into some money too take at least 10% and pay yourself first buy putting it away...

You may also want too keep your eyes open on setting up a CD ladder. You can open one up at www.ing.com as well.

with the way things are right now in the economy it would be best that you stayed short on your cds say 6 months 9 months and 1 year, just remember if you do too take the nearest one that is maturing and invest it back into a 1 year cd.

You can also done the road check out us. treasury.com for other bonds or note ect.

Answer 4

No better time than the present, kid! You are very wise for being young. Investing is great but just make sure you find a good place to invest your money. Also, I think you would have to have parental/guardian approval if you really are just a kid. I am in my early 20's and I am starting an investment fund that if I put $47 a month into it, I will be a millionaire by the time I'm in my 50's! You sound smart so I'm suggesting that you check out a company called Primerica. It deals a lot with insurance but it also has GREAT investment opportunities. Good luck, future Bill Gates!

Answer 5

Yes, you are very smart. Start now, don't wait. Warren Buffett start to invest at the age of 11. You might be the next Warren Buffett. Well, one thing for sure. You will be a millionaire when you are retire if you start to invest right now.

Good Luck! kid

Answer 6

You are very smart and if you graduate from an Ivy League School you could be President of the United States of America in the future.

I suggest you to open a guardianship account at TD Ameritrade with the help of your parents.

By the way, I suggest you to get a summer job every year until you graduate and save your entire paycheck and you will have $100,000,000.00 USD by the time you retire.

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Answer 7

I'd wait to go long the stock market...timing IS important and this 4 year rally cycle looks to be near its end....Be aware of the baby-boomer generation retiring over the next decade too. they will be unloading their stocks to live on MUCH faster than you young guys can buy em up and hold their prices up!!!

Read a book of life cycles.....very important for long-term people...The Long-Wave Analyst with Ian Gordon is a great source for Kondrietieff economic cycle identification

Answer 8

Invest like i did for the last 2 years at www.hbinv.com, they GUARANTEE you 11% a year, so far they did an average of 13.5% a year. They mostly invest in tax lien and mortgage notes.

Answer 9

Mutual Funds offer the best especially if you chose a no load fund. Also Index funds charge the smallest fees. Ex. Vanguard has several funds.

Answer 10

Never too soon to start investing. I recommend that you invest in a well diversified Growth oriented mutual fund. Talk to your local bank's investment rep, they could hook you up.