What is better? Buying stocks or saving money? I have a very low income.?

Answer 1

answer is both....

You save money in an IRA bank account until you have enough to buy a CD. Then you buy the CD and continue to save in the bank account with new contributions....once the CD matures you put all your savings and CD earnings into a new CD. repeat process until you have 5,000. Then take that 5,000 and buy into a mutual fund. begin putting all contributions directly in that mutual fund. Continue to do so until it hits 25k. Then take 5k of that and invest directly in a stock that you have been tracking for the last 2 years...Lather, Rinse, Repeat!

Overall point is to begin investing in something and that something is sometimes a savings account. Investing in stocks requires money (transaction fees will eat up earnings on small balance purchases) and buying 2 shares of something does little for you unless it's Berkshire Hathaway and that one is over 3.5k per share. So work yourself up...but start working!

Answer 2

The answer to this depends a lot on how much financial knowledge you have. The stock market can be very dangerous if you don't know what you're doing. However, it also offers the highest rewards if you understand the market. It is a good idea to see a good financial planner to help you to set up a plan. Simply saving money in a savings account, while better than not saving, will actually lose value over time, because the interest that most savings accounts pay do not keep pace with inflation. You will have more dollars, but each dollar is worth less every year, due to the effect of inflation. A well-managed portfolio of stocks or mutual funds can out-pace inflation and actually increase your wealth. Hope this helps!

Answer 3

It doesn't matter how much money you have - buying stock and saving money are both good. Credit debt is bad. If you don't have much to invest, you might start by opening a savings account at your local bank. Once you have $1,000, you might consider opening an account at Scottrade. They offer many no-commission mutual funds, and $7 online stock trades.

If you want to learn about investing I would suggest "The Little Book that Beats the Market" to learn the fundamentals. You might also want to see what the best investors are buying and selling at http://www.top10traders.com - this is a free site that lets you create a portfolio of stocks with $100,000 in "play" money. Each day the site ranks the best performing portfolios, so you can see how your picks perform compared to other investors. You can also read posts on investing from the best traders, as well as share your own investing ideas. There is also a charting feature , so you can see how your portfolio performs compared to the S&P 500.

Here are this month's best traders:

http://www.top10traders.com/Top10Standings.aspx

Good luck.

Answer 4

This stock market is pretty bad, but a lot of smart investors feel that the best time to find good deals/undervalued stocks is when the market outlook is pretty bleak. The other thing you might want to try is investing only a portion of money at a time (like 10% of the lump sum every two weeks) that way you can end up owning more shares. For instance, if you buy 10 shares at $10 and then the stock drops to $5, you can then buy 20 shares - voila!

Answer 5

It depends. If you invest in stocks, you have to be able to dedicate that money for the long haul. The market will have peaks and valleys, but if you're able to stay with it, you'll make more money in the market. If you're living on a tight budget and think that you'll need that money for unexpected expenses, then I'd do the safe thing and put my money in a savings account. ING has their Orange account, which has a minimum deposit of $25 (I think) and has an interest rate of 4.25-4.50%, which is more than a normal savings account. The only catch is that it takes anywhere from 3 days to a week to get your money if something comes up. I've had my orange account for about a year now, and I love it.

Answer 6

buying stocks is a form of saving money, but if you mean stock vs. savings account, go with stock, with little money mutual fund is best. avg growth for most mutual funds are around 15% in the long run. Best way to go about this is to transfer a fixed amount of money to the fund every time you get paid.

Answer 7

Why not do both?

You can start a brokerage account at Scottrade, deposit only about $10.00 per week or so. You will make interest on your money, and when you have saved enough to invest in stocks, you can buy stocks.

Answer 8

You don't say how much you have to invest. The higher the risk, the higher the gain, but also the greater loss. It take money to make money. If you don't have much, try savings bonds, or CD's..When you have more try mutual funds.

Answer 9

save your money, once you reached your comfort zone. Invest, invest like crazy. Live at your means save and invest at the same time. there is nothing wrong with working hard for your money, but it is better to make your money work hard for you

Answer 10

save and buy birkshire hathaway class b stock, has a phenomenal track record and is like a mutual fund w/o the maintenance costs associated w/