Should I invest?

Question

I am 18 and have worked the past two summers, and have about 5k (will have about 9k at end of summer). I am attending college next year and have recieved many scholarships. All of my school is paid for (all four years). Is there a good reason that I should invest some money instead of just letting it sit in the bank? If so, why and what should I invest in?

Answer 1

Let 's look at this in a completely different way. You are young and you are in the process of aquiring an education.

You will have approx $9K which you are thinking about investing. Along the way, if you choose to invest, you will learn a lot about investing over the next four years.

So, if you do not think that you will need this money, then invest it. The worst that can happen is that you lose it all. Remember, NEVER invest money that you can't afford to lose.

BUT, if you do lose it all, you will have bought yourself an investment education worth far more than $9K.

Now for the beginner advice...

The stock market can be risky at the best of times, even for experienced investors. However, everyone has to start somewhere, and if you do not start now then when will you acquire the necessary experience?

Do read some books on the subject. Visit your local book store and find a book that you like and feel comfortable with.

Some of the titles I have on my bookshelf include:
One Up on Wall Street by Peter Lynch
How to make money in Stocks by William J. O’Neil (Founder of Investor’s Business Daily)
The Millionaire Next Door by Thomas J Stanley and William D Danco

Check out web sites like fool.com and yahoo finance.
Investigate trading strategies with a proven track record over 3, 5, 10, and 15 years.

Pick something that you understand, find easy to use, will help you realise your goals, and where you can take responsibility for your investments and be in full control of your capital.

Systems like the Stocks Monthly system are definitely worth investigating once you are up to speed with the nuts and bolts of investing.

Answer 2

The most important thing you should invest in is your "investing education." If you want to learn how to invest your money, then you must find the time learn how to do it properly. Listening to other people's adivice will confuse you and cost you money in the long run. You must take a little time here and there to learn about what investing is. Don't be in a hurry to make a decision. You have all of the time in the word. The stock market is not going anywhere. There are oppurtunities to make money today and their will be oppurtunities 10 years from now.

You need to understand the "why" before you invest. Just listening to advisors or friends is not good. Until you learn what you need to know about investing, let your money sit in the bank. It ain't going to spoil.

Answer 3

invest it because the interest rate a bank can give you will not be enough to beat the inflation rate so by the time you retire, the money in the bank will not be enough for you.

To invest find a investing firm/stock broker, the bad thing is your money is not insured by the FDIC is you invest it so you have to balance out what you want to do. Or you can research in co. you want to invest it, so if you lose money it will be your fault.

Invest in things you like, (Ex. co. that make things that a majority of the people are buying, iPods, invest in Apple CO.)

Answer 4

Yes, you really should invest it. I recommend an IRA (individual retirement account). If you can get started young, it will serve you well the rest of your life. It is a good idea to get used to the idea of saving now so that it will be easier later in life. Money you put away now will gain interest and will add up. If you do it now, you will be glad you did later.

Also, it is a good idea to put money away for any unexpected events that may come up. You don't know for sure what will happen in the future.

Answer 5

yes, you should. because you have the money but don't know where to invest, i think you should invest in education first. you can do courses or buy the books. remember : choose that suitable for beginners.
so my advise is for now, just let it sit in the bank, but after you have the knowledge, you can start to invest.

Answer 6

Yes, you should deffinetly put at least some of your money into stocks, if not all your spare money. And easy way to do this is to open a mutual fund account. I recommend an index fund.

Answer 7

I would stick with 5.5% CD's. MANY things will change when you graduate. Wait till then to invest in anything long term.

Answer 8

Hi, i recommand you a good and basic tutorial for investing. it covers all Issues related to your Investing and everything around it.

http://www.investingtutorial.info/

wish it will help you.

Good Luck , Best Wishes!

Answer 9

Keep some on hand just in case. IMHO put the rest into a no-load mutual fund that has the words "small" and "value" in its name, or is categorized as "small cap value."