what do people invest their money in? how much does it take? im almost 21 yrs old and i want to invest money in something but i dont know where to start .. any ideas?
2006-07-10 08:56:16 · 5 answers · asked by Anonymous in Business & Finance ➔ Investing
First, I would make sure you have at least 3 months salary saved up in the bank or in a money market fund for an emergency fund. (Some people say 6 months.) Financial disasters like getting layed off or sick happen to all of us.
Second, I would pay off all high interest debt. Pay off everything you can except the house mortgage and student loans. (Consider paying off mortgage and student loans too, particularly if they have a high rate.) Paying off debt is one of the best investments you can make. You will have more money in the future because you won't have debt payments to make.
Third, if you have money left, start investing in stocks, bonds, and money market funds. You want to buy a diversified portfolio of stocks, as individual stocks are too risky. For most folks this means buying mutual funds. It usually takes about a thousand dollars to invest in a mutual fund. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low cost funds. If you are like most people you will invest part of your money conservatively, in money market funds and bond funds, and part aggressively in stock funds. Vanguard.com has an on-line questionnaire which will give you an idea how aggressive you want to be.
Investing in a mutual fund IRA for retirement may give you an income tax break. Talk to your tax adviser. You may also be able to invest in a stock mutual fund via a 401K plan at work. Buying a house instead of renting will save you a lot of money in the long run.
Believing advice you get on Yahoo answers can be risky, so read these websites for further information. (I don't agree with everything said on the sites below, but their general advice is good.) If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.
2006-07-10 09:35:09 · answer #1 · answered by Anonymous · 3⤊ 1⤋
If you are working at a company that has a 401k with company match, do that first (it's free money) and put the money into a targeted retirement fund (Vangaurd, T. Rowe Price, and Fidelity all have low cost funds). Otherwise...
Start with creating an emergency fund (3-6 months expenses). You should hold that money in a safe spot that pays good interest. Check out www.hsbcdirect.com. Then open a Roth IRA if you are eligible.
Suze Orman's book "Young, Fabulous, and Broke" is great for young people with questions about starting out in their financial lives.
2006-07-10 09:02:57 · answer #2 · answered by Ross S 2 · 0⤊ 0⤋
Do you own a home? Most 21 year olds do not.
I'd start there.
2006-07-10 09:01:35 · answer #3 · answered by g-man 3 · 0⤊ 0⤋
there a lot of things you can do
first how much money do you have?
you can put it in the saving account, CD, Bond, or stock market.
2006-07-10 09:00:13 · answer #4 · answered by matt0424 5 · 0⤊ 0⤋
open yourself an ira. just go to the bank and do it there. put the max amount you're allowed every year and don't touch it!! you;ll be so happy when you're old and grey
2006-07-10 09:01:05 · answer #5 · answered by origchick 5 · 1⤊ 0⤋