I need help starting an investment?

Question

I'm 16 years old and it suddenly hit me that the sooner I start investing in something, anything, then the more money I will have when i retire. What do I have to do to get started? What are some good things to invest in?

I talked to my parents and they said a good thing to start off with are CD's. What is the average % pay off for these? say i bought a 500$ CD?

Answer 1

Congratulations for starting young! The first step to getting rich/retiring/achieving any goal in life = planning & starting early.

Instead of asking what are some good things to invest in, you should investigate and educate yourself about the available options, and make these critical choices and decisions by yourself. They are your own finances, so you should attempt to take full responsibility for them as early as possible. Why ask a question, when you can explore & discover the answers for yourself? Because in the future, you will definitely need to know how to find the answers on your own if you ever want true confidence and peace of mind. (However, many young people your age don't even think this question is important, so you are far ahead of the pack already.)

Self-responsibility -> Self-education -> Self-success.

There is lots of free stuff on the internet or in the library where you can begin educating yourself. Learn about: different investment vehicles, portfolio allocations, terminology, and successful (and failed) stock picker stories, strategies & philosophies.

Here are some tips from my own experience:

1. First, invest some time in educating yourself about investing before you do it. Then second, invest your money. NOT the other way around! Prepare, then Decide.

2. Focus on Saving in the early stages, not investing. Build and save a sizeable base sum (2-5K, more is obviously better), then Invest. Investing 1K and getting 10% is a gain of $100, while investing 5K @ 10% is $500. You can still invest with 1K, but put your main focus on Saving. Save, Save, Save. But at the same time, remember to try to do a good job in whatever you are doing! Don't focus on money THAT much - try to do jobs you enjoy, can get better at, learn from, take pride in, and truly help others with... which will usually, ironically, help you make more money and save more.

3. Don't be too greedy, and don't be too afraid. Your buy/sell/investment decisions should not be based on emotions. You are your own worst enemy, and you could make decisions that kill your investments. That is the irony: your desire to make money, could very well cost you to lose it. In a sense, you will have to learn how to divorce yourself from your money - to not care too much about it. Prices go up/down, and you need to learn how to not let your happiness go up/down with them. Consequently, this means centering your life happiness not on your money or retirement. You are NOT your money, your retirement fund, or your job.

4. Find/Develop/Refine an Investment style that is most suitable for your own personal taste/abilities/goals. That may include safer ETFs, funds, indexes, or "riskier" individual stocks. I see absolutely nothing wrong with a teenager picking individual stocks (you can start with the well known ones like Microsoft, et al.), as long as you have educated yourself about those stocks, have solid buy reasons, and are willing to take full 100% responsibility for your picks. Each person's interests, temperament, goals, risk-tolerance, analytical & judgment ability are different. There is no one-size-fits-all investment portfolio that will fit every 16-year old.

5. You'll make mistakes - so take the opportunity to learn from them. Like nearly every other endeavor, it's a process of self-discovery, self-understanding, and self-evolution. While investing appears to be only about growing your money, it's also about growing yourself.

Best wishes & many apologies for the lengthy reply -

Answer 2

You may have to be older, depending on the state, to start an investment program in your own name, so you will need a relative to help. But you're absolutely right, the earlier you start, even with small amounts, the better off you will be. Try growth oriented mutual funds or ETFs which invest in many stocks. That spreads out your risk. Be careful about individual stocks.

Answer 3

Open a ROTH IRA account at Vanguard.com and purchase the Total Stock Market Index, Total Bond Index, and Total International Stock Index funds in three straight years. After that, fund each of the accounts every year until retirement.

Slow and steady and you will be on your way to a prosperous retirement being a millionaire.

Answer 4

I wish I had started at 16. I just got started a few years ago and don't have the advantage of time. The best way would be to join an investment club and to attend meetings of groups such as VectorVest, Tcnet and Canslim. Many of these have free meetings and you will hear some of the very experienced investors share their experiences. You can learn a lot this way..

Answer 5

If you have earned income throw the money in an IRA. If not have your parents open a custodial account at one of the online brokerages. The idea above about vanguard is a good one, but at your age I would not go with the bond fund. Dodge and Cox International fund is a good one. Also, read as much as you can and learn about investing.

Answer 6

You need to be careful at your age. You cannot own property at this point and you cannot sign contracts. Talk to your parents about helping you open CD's, Mutual Funds, or buying some stock shares that you are interested in. Congradulations on being mature enough to know that money does not grow on trees.

Answer 7

First of all congratulations. It is refreshing to see someone your age thinking of saving. My advice is to find a good no load index mutual fund to start or the SPY etf. They reflect the total market and go up and down with it. If you age is a problem ask your parents to set up an account for you.

Answer 8

when i was 16, i only involve myself in fixed deposits due to age limit.

do include maybank and stanchart. financial insitutuons such hong leong, sing financial and even ntuc thrift.

as such companies are not as well-known as UOB, DBS and OCBC, they offer better rates.

compounding is the name that u are refering to. u earn interest on the interest from the fixed deposit $.

Answer 9

Open a brokerage account at Zecco and invest in the ETF DIA.

Answer 10

http://www.premiuminvestor.com/