I am a young man (21 years old) and i have a investment question?

Question

I want to start investing but have no idea on how thing work or where to start or what to invest in. I just want to now what is a good investment for an amature to start out in. I just want to put some money in investment now so then later down the road say 5,10,20 years ill have made some money and to help me out with money situations if i have any down the road. i would appreciate any help.

Answer 1

Congratulations on getting started. It’ll help you more than you know!

Your first dollars should be spent on getting educated on investing. You don't have to train to trade them professionally, but we are talking about your future here. So the more you learn, the more it'll help you! So let's start there.

You ask a very broad question, so be prepared for a pretty long answer. Just take it in chunks!


How to invest depends on what you already know. We'll assume that you're beginning since you say you're a newbie!

A good primer is How to Make Money in Stocks by William O'Neil. You can get it cheap just about anywhere. It’s widely available new or used.

Another good one is one of Jim Cramer's books (he’s got a few).

But books will only get you so far. At some point, you'll also want to get at least a little training. There are some great education companies if you want to make the investment. Investools.com or optionetics.com are both very good companies as is tmitchell.com

For free, you can start by visiting thestreet.com and investopedia.com. That'll get you a pretty good primer so at least you'll understand what the markets are and what a stock is, etc.

If you get a chance, watch Mad Money on CNBC. Don't trade any of his picks until you track many of them over time. Just use the show to get you to understand some basics and get a feel for the market itself.

Next, subscribe to something like Investorsbusiness daily or something like that that can help you identify good stocks.

Once you understand stocks, go to 888options.com. It's a website that'll help you understand options (what they do, how they work, etc). You don't need to trade them, but the more you know, the more you'll see how options can really be the safest way to invest (once you're educated).

For discipline (which is crucial to successful trading), probably Trading in the Zone by Mark Douglas or Mastering the Trade by John Carter

I know that’s a LOT to absorb. Just take it one step at a time for now. Start with a book or two to give you an idea of where to begin. Take your time, and let it seep in.

As you get up to speed, you should papertrade to practice (highly recommended). This should help reduce your losses in the beginning as you get used to buying/selling.

You can practice for free on almost any reputable broker site (optionsxpress, scottrade, thinkorswim, etc).

Start slow, then as you figure things out, you can buy more shares.

Congrats again on getting started. If you have any questions, please let me know.

Hope this helps!

Answer 2

The opportunities for investment are too vast for this forum so I'll recommend just a few. Real estate is my fave and there are many many ways to invest. Regardless of what you may hear from stock junkies and the like my opinion is that real estate is the most sound and rewarding of investments. Now, having said that, there are many other investment vehicles. It all depends on what you want to accomplish. You say that you want to have money 5, 10 or 20 years down the road but each of those time frames carries different strategies ... short term investments versus long term investments. At your age, I'd suggest an IRA that is fairly conservative so as to guarantee a nice nest egg when you retire. For short term investments try the stock game or bonds or purchase tax liens on real estate. You're young so you have some time to weigh your options but don't wait too long or 21 becomes 41 and you'll find yourself wishing you had made a decision. Find your way to a library and read every investment book you can find. Don't be swayed by family or friends that may criticize you're reading 'get rich quick books' because those books usually aren't get rich quick but are generally get rich eventually and with hard work and tenaciousness. Good luck.

Answer 3

Matt,

There's some good stuff in here and some not so good. But most of the answers are jumping in further down the road than you are. The first thing you need to do is read some books to help you understand some of the concepts discussed here, such as time horizon, risk tolerance, conservative/aggressive investments, etc.

1. The Only Investment Guide You'll Ever Need (Tobias)
Well, it isn't the only one you'll need, but it's a good place to start for basic financial concepts. Then it's on to stocks.

2. Next you need to learn about "asset allocation". I suggest a book called "The Intelligent Asset Allocator" by William Bernstein. In this book you'll hear that picking stocks is really hard, costly and time consuming, so you shouldn't waste your time. Instead, focus on buying what are called 'index funds' which give you broad diversification for very low annual cost (a key to long term returns.)

3. But heck, the stock market is fun, and it can be lucrative, so I'm going to recommend four books about stock investing and trading, each with a little diffferent take:

-- Real Money, Jim Cramer
-- How to Make Money in Stocks, William O'Neil
-- Beating the Street, Peter Lynch
-- The Little Book That Beats the Market, Greenblatt

4. Finally, if you really get into stocks, you may want to delve into what's called 'technical analysis' which is the study of stock charts for purposes of finding stocks about to make good moves. For that I suggest "Technical Analysis of the Financial Marekts" by John Murphy.

Good luck dude!

Answer 4

First off figure out what is suitable for you. There are a lot of risk profile questionaires on the net.

Generally they have about 10-20 questions and give you a sense of what you might be comfortable using as a investment tool.

Next, now knowing this, go to a place like Morningstar.com and find investments that match your risk tolerance.

Look for your long term goals, retirement, yo use a Roth or Tradional IRA account.

The more you can start saving now, the more you'll have later. That's the power of compunding interest.

Answer 5

I m 24 years old university student. For bearing my educational expenses I m suppose to do some business. I live in Bangladesh.
Bangladesh is one of the underdeveloped countries in the world.
The only resourses it has it's vast population. Recently Dr.Mohammad Yunus has won the nobel peace price from bangladesh. He showed the world that people can also change their state without investing.He introduced the microcredit system and got success. I myself also worked in one of his project and learned a lot . And at present I realize that if we invest in different business in small amount we can get more money as accumulated result.

If u r sincere and honest ,I would help u to strat ur own business
with nominal investment. Even if u have no money to invest ,no problem. I will provide u local products of different types costing from 50 to 90 cent which u can easily sell for 5 to8 dollars.

My only problem is that I do not have any friends oversease .

[e-mail]

Answer 6

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Answer 7

Well since u're still very young, you should substantially allocate some of your fund to more aggressive/risker type of assets to grab the potential high return. How much % of this asset is up to you (whether u are a risk taker or risk averse kind of investor...judge yourself). Since u're still in your early 20's I would say 50% allocation to riskier asset is fine for you. The rest 50% just put in a low risk of investment..just to have a steady fixed income.
Now for your riskier assets...First find what industry you think will do good in 1-3 years (I don't mean find it by yourself I mean seek advice from the experts...if you think u have no knowledge nor expertise in this field...don't be shy there are people to help you in this case...that's why we have financial advisors). After u find what industry, research on which firm u think is good and their peers. After that research their prices (example: stock prices if u're into equities). Start watching their stock price buy low and sell high, and TIMING is everything. Sounds easy, but you have no idea how many people too late to buy and too early to sell.
Start in small amount...think of it for learning experience first. LAter on if u think u got the skills already invest bigger. However if after a while u think your performance is bad, get help from your bankers/financial advisors.
Good luck

Answer 8

The whole part of doing something is if you can see your self doing it for the rest of your life i have been in the military since i was 17 years old and i love it always have and that is what it about look you can join the Navy do a few years finish your degree, and if you want to do you first choice again you can get out and do it if you want to stay Navy then you can do that and will have a degree which counts toward promotions and advancement you cant lose its win win plus the Navy will pay for you to finish your Schooling how great could it be doing what you want and getting what you need and seeing the world Cool huh!

Answer 9

Start by investing in a financial education.

A great book to start you off: best seller Rich Dad, Poor Dad by Robert Kiyosaki.

Meantime - start purring 10% of your gross earnings in a high interest savings account to start building an investment fund.

More Power to You.

Answer 10

i'll second that, read all the kiyosaki books in addition to any other investing books you think look interesting