How can this be done?

Question

I am 19 and my goal with investing is $600 a month (is that to unreasonable?) I have around $20,000-$25,000 to give go. Would Mutual funds be the way? CDs? Money Markets? Stocks? Bonds?

Answer 1

You want to make $7,200 a year on a $20,000-$25,000 investment. That is too optimistic. Stocks average 10-12% a year. You shouldn't expect more than $2000-$3000 a year with great variability from year to year.

Answer 2

Six hundred a month may be reasonable depending on your income and expenses.

Keep some in cash for emergencies. Six months of income is the standard recommendation, but you can probably do with less.

Mutual funds are a good way to start. I often recommend that if you want to dip your toes into individual stocks, start with one that pays a dividend and makes a product or services that you personally use and like. It's a thrill to get the first dividend check.

An alternative to mutual funds are some ETF's and closed end funds, such as SPY, RSP, and BEP. I personally like RSP and BEP.

With $25K you can spread it around in 3, 4, or 5 pieces to reduce risk, although funds by nature are already diversified.

Answer 3

If I were in your position I would invest in stock, like oil, aluminum,different alloys +items that are looking good for the future and make sure you get dividends Quarterly. This means you get a check quarterly from each set of stock. At the end of the year don't forget to include them when you do your taxes. You'll make money, the more you invest the more taxes you pay, but the more money you'll make. GOOD LUCK.= My father use to do that as a hobby, he made good money. It keeps America strong.