Investment Options?

Question

My husband and I are currently 22 years old with a three year old son. Money is a little tight, but we manage to put a little away here and there. My question is... is there anything out there other than a savings account where I can continuously invest a small amount (say one hundred a month) and have a return larger than 2.25% a year? I understand if a larger amount has to be invested first... anyone knowledgable in this area?

Answer 1

The recommendations that the other posters gave is very good, but the question I have for you is; do the recommendations they gave you fit you and your family?

What I mean by that is several people have asked about where to invest their money. They were told stocks, CD's, mutual funds, IRA's, etc. The posters recommended those investments because that's what they (the posters) are investing in, but those investments may not be right for the person asking the question.

For example, if I answered based on that criteria, my answer would be to trade Forex, futures contracts and commodity options. Why? Because that's what I do, but the majority of people are not cut out for those markets, they are the highest risk out there.

What you and your hubby need to do is sitdown together and answer the following questions:

1) What are our income requirements? How much do you want to make? What kind of returns would you like? 10% annually, 2% per quarter, 5% monthly, etc.

2) What are your time horizons? When would you like this all to transpire? In 10 years, 30 years, etc.

3) What are your risk tolerance levels?

You see, everyone has their own investment personality and you need to find out what you and your hubby's are. Some people are very risk averse, so CD's, savings accounts are best for them. Some people have moderate risk levels and thus blue-chip equities are right for them. Some people (like me) have very high risk tolerance levels, so I trade the most risky investments out there. For me, the answers to the above 3 questions are (I know they're kind of short, but you'll get the point):

1) I want maximum profitability. I want to return at least 100% on a trade.

2) Very short term, I want to be in the investment 2-4 days, 2 weeks at most.

3) I have a very high risk tolerance level.

That's why I trade derivatives and forex. I saw a 387% return on 1 trade in about 1 week, but I took on a lot of risk.

You and hubby need to define what your parameters are. Don't follow everyone elses advice because everyone elses advice may not mesh with you style and temperment.

Best thing to do is consult a CFP and have them help you define your parameters and set up investments that will suit your style/temperment and meet the criteria you set by answering the above 3 questions.

Good investing.

Answer 2

There are many ways, but I would strongly recommend an internet account with Fidelity or someone like that. If you have a larger amount already saved, you can buy government backed CDs with better than a 5% interest rate. ($1,000 minimum investment-1 year maturity) They pay a better rate on money market savings that you are currently getting and have a wealth of information and choices for the small investor. Keep your money totally safe to start with. You don't have enough to play with at this point. You are well on the way to financial security if you can dicipline yourself to save $100 per month.

Answer 3

When I was 20 I started investing $50 a month through a local Waddell and Reed office buying mutual funds in a Roth IRA. It has worked out pretty good since then. I have sent in extra payments and I have like $6,000 in my account with them now and I'm 25.

I also used Sharebuilder.com and bought stock in individual companies. You can buy for $4 a trade but its only once a week they allow you too.

You can also look at different fund companies or stuff online but if you don't know what your doing find a local financial adviser, they are everywhere it seems and they can get you started with $100 a month. There are alot of different choices and everyone will tell you a different answer.

Answer 4

INGdirect is pretty cool. They give you 4.3% right now. So you can make that your short-term investment. You can transfer your money back and forth between your account and your checking account. Very flexible. You earn monthly interest.

Get a job with a good company and buy their stocks. Employee stock plans help a lot. They might give you a discount when you buy. And a few months later you can sell and make profits.

I'd say IRA and ROTH IRA and 401K but those are more long-term. If you're looking to have some money now or soon, then my first 2 choices are the way to go.

Good luck!

Answer 5

Currently CD's are offering 5% interest and are a very safe form of investment and the minimum deposit is around $1,000. Mutual funds are usually more risky yet they have a potential for higher return plus they have a bunch of different fees. With that amount of money i would recommend the CDs or a money market fund which could be opened at most banks or at Vanguard or Fidelity. They both offer around 5%. Hope that helps.

Answer 6

I started a Janus account with 500 to start as long as you sign up for an automatic $100 to be deposited out of your account monthly.

Otherwise the min would be 2500. So it's a good way to get into a good fund family w/ou8t having a ton of initial investment.

Answer 7

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Answer 8

Just keep saving and read books. something like: "How to make money in bull and bear markets", "Money Mischief", "Reminiences of a Stock Operator", "Economics for Dummys", etc.

Keep watching the real world for clues as to new products and who makes them, new problems that need solutions, and how people feel about themselves and their 'visions'...you must be a psychologist to minimize risk in your investment decisions.