What is a good way to invest at the age of 22?

Question

I want to invest in something so that I can have a little money for the future.

Answer 1

1) Use only risk capital - 100% of which you can afford to lose

2) Decide whether you want to devote literally thousands of hours to studying the stock market

3) If you decide you can't do 2), then buy a no-load, low expense index fund - 80% of mutual fund managers fail to beat or even match their indexes after fees. Don't believe the hype about hedge funds either, because hedge funds are not required by law to report their performances (so only the successful ones report, while the failing ones quietly shut down). LTCM blew up in 1994, and recently Amaranth lost about 80% of its investors' money. Long-term, the stock market has returned up to 10% per year (including dividends), although it is more likely to return more like 4-7% in the future.

4) Never think the stock market is an easy way to make quick money. It is once you've mastered it, but thinking that way ensures that you don't have the objective emotional control to make money in the stock market.

5) Think of the stock market like any other career - it takes time, effort, and money to get good at it

6) Discipline is the key to successful stock investing

7) Read, read, read, and study, study, study

8) Avoid any and all hot stock tips (especially on the Internet), don't subscribe to newsletters or systems (80-90% of which are not even profitable, but of course you don't realize that until it's too late), and stay way from penny stocks

9) Unless you are willing to invest the substantial time it takes to time bull and bear markets (which can be done, regardless of what anyone says or thinks), then invest steadily every month or year, and ignore what the stock market is doing

10) NEVER QUIT. Eventually, perhaps after only months, or 10 years, you will start pulling ahead, and once you've gained reasonable competence in the stock market, it will start to seem like easy money.

Answer 2

Does your employer have a 401K? Start there, you get to put money into investments and lower your taxes at the same time. Joining the 401K gets you a free place to keep the mutual funds that you will be investing the money in and a few choices of funds so you can begin to learn about investing. Automatic payroll deductions ensure that you keep it up.

If you can save more than that maybe your employer has a stock purchase plan. These usually come with a 15% or so discount plus some nice rules about price lock-ins. This can be an excellent way to save a downpayment for a house and while real estate for investment purposes alone requires a bit of work and knowledge, real estate investment as side effect of needing a place to live is probably the number one source of wealth in this country.

Maybe start with Andy Tobias' "The Only Investment Guide You'll Ever Need"

Answer 3

An IRA, invest the full amount that you can afford, what particular type of investment, individual stock, bond or mutual fund, domestic or foreign, is up to you to select and can be more than one. If you deduct it from your taxes now you will pay taxes when you withdraw it, so it's better to not deduct it, and be able to withdraw it 40 years from now tax free. This money can't be taken away from you to satisfy debts or lawsuit judgements. the next best thing would be a term life insurance with Met Life or such outfit. Bonds are ok but humdrum, low but safe yield. Gold and "fools" go together. They say the younger you are the more risk you can afford to take, but my advice is stick to things you know, such as the industry you work in or your academic field of study. Be wary of "fads" (I got burned on snowboards, Iceban and Lucent), they only profit those who advise others to buy, and then sell out when it peaks. The railroad stocks I was talked out of investing in a few years ago have doubled since. Even the best admit they are only right 50% at best, study up on the markets and mutual fund ratings. If you have time to read try Investors Business Daily for a two week free subscription and read it cover to cover, or even secondhand Wall Street Journals or Barrons magazines, they may be outdated but will give you an idea of the basics. Be wary of Jim Cramer, he's become so big that stocks move on his word alone these days.

Answer 4

I am 21 and have been wondering that question myself. It's tough to figure out where to put your hard earned money, but there are a few important things you need to figure out before you begin investing.

1. How much money do you have to invest? This is perhaps the most important question to start with because what you can invest in is limited by how much you have. You should at least be saving 10% of your annual income to invest with.

2. How much time and effort can you to dedicate to your investments? If you just want to put your money into something and not worry about having to review it on a daily or weekly basis or sitting down and figuring out plans with financial advisors and CPA's etc, then a simple CD or mutual fund could be your best bet. If you feel you have a bit more time to dedicate to researching investments, speaking with experts, forming a team to help you, and are willing to take on a bit more risk, then you may want to look into things like stocks, real estate, private business ventures, etc.

3. How important is asset allocation to you? Do you want to put your money all in one type of investment such as putting money in a CD or do you feel you'd rather work with multiple investment strategies like a CD, some stocks, maybe a mutual fund or two and some real estate? Overall the less amount of money you have the less amount of diversifaction you are going to be able to have again going back to certain investments needed minimum amounts to start investing with. On the up side, diversifying your investments (or your portfolio if you prefer) spreads out the risk involved with investing to help minimize your losses and maximize your gains.

4. What level of risk are you willing to except? At our young age I say go for broke with risk because we have the best ally in getting rich on our side, time. We can afford to take bigger risks than someone in their 50's or 70's. Bigger risk equals bigger reward. Smaller risk equals smaller reward.

The best way to invest is up to you, but once you figure out those 4 things you can begin investing. The sooner you start the more time you'll have to grow your money tree. Here are some investment opportunities to check out:

CDs
Mutual Funds
Index Funds
Stocks
Bonds
Real Estate
Private Equity Loans
Private Business Ventures


Remember the best investment you can ever make is in yourself! Don't forget to buy some books on investing and personal development and personal finance. You can't increase your net worth without increasing yourself. Become the best you can be and you'll be shocked at the types of opportunities will pop up.!

Answer 5

Becareful who you take your advice from as you can see the variety of responses you see here.

Having been in your situation and being slightly older than you, i have changed my situation through hard work and education.

(read RICH DAD POOR DAD by ROBERT KIYOSAKI)

Because you asked that question is the same reason i started a group on myspace about 2 year ago called the National Young Millionaires association. Here you will be connected with people like yourself who can give you a better connection than you'll find here. (there are nearly 13,000 people there now like yourself.)

Check my sources and you'll find out how to connect with this community.

My mother played it safe her entire life until she died two months ago with cancer at 60 years old. She was never able to accomplish a good amount of her dreams because she played it safe - had kids, couldnt afford to take risks after that, and whatdya know - she's no longer able to achieve what she wanted. 40 YEARS - she spent working for the same company - playing it safe. By the time she needed to take risks because of becoming sick, losing her job, and needing money to support the family - there was no way she could take any risks to better her life.

For everyone else that may be reading this - if you're young - playing it safe is one of the worst things you can do.

At least while young, you can recover.

Answer 6

Invest in a mutual fund that traces an index like the S&P 500. Invest regularly so you take advantage of 'dollar cost averaging.'

Answer 7

Try going through financial peace university. Best investment you'll ever make. It tells you very clearly how to retire a millionaire. The real way. No gimmicks or shrot-cuts. Explains how and what to invest in, such as Roth IRA's, ESA's, Real Estate, etc. More importantly, it tells you when to invest.

Answer 8

The bigger bang for your buck try Primerica Financial Services, they will teach you while helping you to invest your money. They teach you how to keep more of your money instead of paying large fees that other services charge. Just give them a look over, you should always check out with whom you invest through.
Good luck

Answer 9

Two amazing rules: 1) never own a credit card. 2) Buy a house.
Guarantee is that if you can live without a credit card, you will , when your 50, have paid off your mortgage, and possibly you will have enough cash to buy a new car, and a country chalet or upgrade to more valuable property, with cash. No debt, that is the key, Go for it, give it a try.

Answer 10

No, yet you will possibly land up broke. loads of IPOs land up as duds. lots. If the IPO is any stable in any respect, you have no longer have been given any probability of entering into on it except you have an account with a substantial brokerage organization well worth a minimum of a million pounds. Do you?