I had a teacher who is also an investor, and he suggested that the best investment for a poor college student is a G.M.F. I took interest, but was told I would have to invest a minimum of more than a thousand dollars.
2006-09-21 13:57:58 · 2 answers · asked by Anonymous in Business & Finance ➔ Investing
Well, first thing. Mutual funds suck
(Sucks may be a bit harsh. Let's just say they're not as good as other instruments). (Search some of the resolved questions where I answer this in depth).
Secondly, buy some ETFs (Exchange traded funds). You can get the same diversification, with less overhead, less minimum investment , and more liquidity with ETFs!
Thirdly, any monies you put into investments, go ahead an put into a ROTH IRA. I'm presuming you're at a lower tax bracket now than you will be at retirement. So using your after tax dollars in a ROTH IRA will be allowed to grow tax free until retirement. Additionally, when you withdraw the money, it's all tax free too (under current law). Gotta love that!
Congrats on taking an interest at a young age. If you do so consistently and continue to educate yourself on investing, you'll find yourself able to retire much sooner than many of your peers!
Hope that helps!
2006-09-21 14:21:30 · answer #1 · answered by Yada Yada Yada 7 · 2⤊ 0⤋
Well.... I agree with the above poster about ETFs. However as far as I know ETFs are traded just like stocks, which means you need a discount brokerage to start with. If the fees of the discount brokerage don't make sense compared to your investment amount, or you find the trading thing intimidating, I would say growth mutual funds are a good way to start. Wherever you are looking for mutual funds, you should try elsewhere. There are plenty of options for buying MFs that don't require $1000 minimum.
For example, go to www.ingdirectfunds.com and check out their fund selection. You can do a monthly pre-authorized purchase plan with them, ie. you contribute $50 a month or whatever you can afford. No minimums. Since you are a college student, you are probably young, which means a growth fund is a great choice. Or an ETF if you want to go that route.
2006-09-22 00:29:18 · answer #2 · answered by ontario ashley 4 · 0⤊ 0⤋