I am a teen wondering what the best way to save and invest money is. Should I get a savings bond, a CD, invest in the stock market, or what? I would appreciate info from anyone that has info on the subject.
2007-02-10 15:18:09 · 13 answers · asked by Anonymous in Business & Finance ➔ Investing
It really depends on when and how you want access to the money.
Short term:
If you need access then a Savings account like www.emigrantdirect.com at 5.05% is a good place to start. Local bank savings will only be about 1 to 1.25% you would actually be losing money to inflation.
Mid term couple years:
CD's are OK but your money is tied especially if you want to beat 5.05% it will be longer than a year more like two years. If you have to have super safe then this is OK.
Better with some risk would be ETF's or no-load Mutual funds, look for no load funds like Vanguard and being young go for 8 to 10% historical returns.
Long term 4+ years
US Savings bonds, very secure but very long term with small return, may be 6% at best.
Being young again ETF's and Mutual Funds are a better choice and since long term is the goal go for more risk like funds that have 10 to 15% historical returns, again no-load funds.
It's good to start when you are young treat buying shares in an EFT or a mutual fund like buying stuff at the store. Think of them as stuff you want to buy like a new football, Shoes, stereo, etc… The difference between the Rich and the Poor is the rich buy assets and the poor buy liabilities.
For example
The poor spend $17 on a (music) CD that's worth $3 as soon as you leave the store and you can’t give it a way 20 years later. - A liability
The rich spend $17 on a stock that pays a small dividend starting a $0.25 a year and in twenty years is worth $98 and pays $2.50 in dividends a year
- An asset
2007-02-10 17:04:47 · answer #1 · answered by hogie0101 4 · 0⤊ 0⤋
Go with the stock market. At a younger age you can be more aggressive and so have more risk. Some people would say look into mutual funds, but even those aren't aggressive enough.
Try looking into companies that you support that have a good product and room for growth. Research some companies by looking at their news and stock history. Pick out a few stocks so it will be diversified enough. Then get an account from Schwab or Scottrade to buy them. Reading up on the info may be a little time consuming, but it's very important. Learning is the best way to increase money.
For your account, get a Roth IRA to save for retirement. If your underage, you'll need a parent to control your account.
2007-02-10 15:49:58 · answer #2 · answered by zander1331 3 · 2⤊ 0⤋
My answer is going to be very boring but really worth it in the long run. Invest whatever money you can into an IRA (Individual Retirement Account). If you started with an initial investment of $3000 when you were 15 years old and continued to invest $3000/year until you were 19, by the time you retire and, assuming a 10% return on investment, you would have more than $1.5 million.
Right now it may not seem glamourous, but right now in your life it is the best place to put it. Ask your parents to take you to a financial advisor and enjoy your future.
2007-02-11 12:31:52 · answer #3 · answered by Mark B 2 · 0⤊ 0⤋
it's easiest to save if you don't see the money - so if you can get direct deposit of your paycheck and then regular savings withdrawals from that same account to something such as ingdirect (as stated above, an online bank, and there are others) or if you're thinking longer term there's sharebuilder which allows you to buy small quantities of stock with regular investments. Unless you're really sure you want to put the money away for a longer period of time, I'd stay away from CDs - you can probably get better returns in stocks AND my local bank offers rates on 1 year CDs that just barely match ing's savings rate. Good luck.
2007-02-10 18:03:36 · answer #4 · answered by Anonymous · 0⤊ 0⤋
If you're investing for the long term, you should definitely invest in the stock market. You'll get the best return over time. This can be as simple as opening an account at a discount broker such as Scottrade and buying an index fund that tracks, say, the S&P 500.
2007-02-10 15:46:40 · answer #5 · answered by LongArm 3 · 0⤊ 0⤋
This is good. A teenager with this interest so young. It is obvious you will do well in finances by this question.
You can see a whole lot of ideas on these answers from all of these people.
I would put small amount of monies in almost all of these different classes of money. Stocks, bonds, CD's savings, checking books etc.
the idea here is to see how all of these work so different in the growth of each. AND TO SEE WHAT MISTAKES YOU WILL MAKE. By making these mistakes with smaller piles of money will teach you a good lesson for the day when you may not want to make such mistakes.
Just remember these two truths.
1.Save
2, Diversify your assets.
2007-02-10 16:50:34 · answer #6 · answered by Brick 5 · 0⤊ 0⤋
I guess it would depend on what you are saving for. Long term or short term. Savings bonds, CD's and money market accounts with check writing privileges are all good investments. Though if you are looking for a better return try a no load mutual fund with no 12b-1 fees and a low expense ratio. good luck and remember the earlier you start saving the better.
2007-02-10 15:51:03 · answer #7 · answered by Anonymous · 0⤊ 0⤋
I would open a Free student savings account, and also buy some CD's so that the money is not easy to get ahold of. I wish you all the best =) I can't wait for my kids to think like you.
2007-02-10 15:23:50 · answer #8 · answered by whattheheck 4 · 0⤊ 0⤋
i know this is the time that you want to earn money,
try ingdirect.com for info on savings or cd's they have the best rates on saving money.
2007-02-10 15:39:58 · answer #9 · answered by I have the true answer. 2 · 0⤊ 0⤋
Bank Of America.com
2007-02-11 08:46:32 · answer #10 · answered by Anonymous · 0⤊ 0⤋