Dear EXPERIENCED investors: I know, but it's a start...?

Question

i saved up tip money from my job because i wanted to invest in a stock that i have heard from shareowners gives VERY nice returns. it's only $600 so far, i plan to keep adding, and i can still survive on my weekly paychecks without starving to death--- but is this a good idea? you know, saving tip money and putting it towards stocks? i forgot to mention i'm pretty young and i've never invested before. what are some things you'd suggest?

experienced investors, please...thanks!

Answer 1

I find it quite surprising that everyone is advising to get out of credit card debt when you did not even mention that you were in credit card debt. Are people in the U S that much in hock?

To answer your question. $600 is a bare minimum but it is a start. I started with even less a long time ago. You have two options that are reasonable. 1. You can invest in certain mutual funds.

As you have already been advised, some mutual funds have what is know as systematic purchase, where you each month have the mutual fund automatically withdraw a certain amount from your checking account, normally a minimum of $50 for T Rowe Price. When you select that option the normal minimum investment of $2500 is waved. That would be a good option for you. Here is a link to T Rowe Price

http://www.troweprice.com/common/index3/0,3011,lnp%3D10375%26cg%3D720%26pgid%3D8358,00.html

Another option which is available is to open a brokerage account with a company like Scottrade which requires only $500 to open an account. That option will allow you to buy any stocks or exchange traded funds you might wise to.

Now, when I started I opened a brokerage account. I think that if I had instead invested with T Rowe Price, I would have been much wealthier now. I would not have had so much fun however.

Answer 2

First, you should have an emergency account. Speaking generally, you should not be investing unless you are out of debt or have "good debt" that's at a lower interest rate than what you're making from investing. Investing all your money in one stock isn't the best idea either. And you have only invest $600, your returns aren't gonna be too great, considering most good stocks start around $15.00 a share. If your other finances are good, then with the amount of money you have, a mutual fund would be safer for you, especially if you are not an experienced investor. In my opinion, you should wait until you can invest more money before you get started in individual stocks.

Answer 3

Jaz,
I started out with 0 dollars. I found a mutual fund that didn't require a minimum opening amount as long as I made a commitment to invest $50.00 a month through electronic deposit. Once I had a couple of thousand I withdrew $1000.00 and bought my first stock. It takes time but the important part is making the commitment to invest every month. Right up there with the phone bill and rent should be investing. I now do most of my investing in dividend reinvestment programs or DRIPs. A lot of banks have DRIP accounts and they're pretty safe. By investing through DRIP accounts I don't get murdered by transaction fees. Some of my accounts allow investments as low as $20.00 a month so they're great for a new investor that doesn't have a lot of cash. You might want to join the Motley Fool and self teach yourself and get some ideas there. With Duke Energy you can purchase directly from them and have just $25.00 a month withdrawn automatically from your checking. If you want more info just email me at this id @yahoo.com

Oh and coldrain was right about the debt. If you're carrying a large debt load that should be your priority.

Answer 4

Just as previous posters said, get out of credit card debt and then place 3-month's worth of expenses in a bank or money market account for your emergency fund. This is even more important that learning to invest in stocks.

You will need to get a basic education on investing before you put your money into anything. Otherwise, you are likely to lose your money. You will want to weigh the pros and cons of individual stocks verse mutual funds. Personally, I would recommend mutual funds. Here are 3 good sources of info to get you started:

1) Mutual Funds for Dummies, by Eric Tyson
2) http://www.invest-for-retirement.com has a free downloadable book, by me. Took me 16 months to write, and I don't even charge a penny to my readers.
3) http://www.investopedia.com has some excellent tutorials

If you want to venture into individual stocks, then get a copy of "The Five Rules of Successful Stock Investing", by Pat Dorsey.

To invest properly, you must first define your goal(s) and your time horizon for each goal. For, it is your time horizon that will determine the amount of risk that is appropriate for you.

Answer 5

This is a great idea! $600 is a bit small to be picking individual stocks. The commissions will kill you and you can't afford to diversify.

This means NO-LOAD stock mutual funds. I like Vanguard S&P 500 index fund. Many fund families, like Scudder, will waive the minimum (frequently $1000) if you promise to build up to $1000 within a year, like making $50 per month additions to the fund plus the $600 starter.

Answer 6

Great idea! Start when you are young and use the power of compounding interest to help your money to grow and add to it continually on a monthly basis.Or there are alternative avenues of investments available
I personally prefer stocks/shares.
But whatever you decide to do you need information first.The site below will help you along the way .Good Luck!

Answer 7

I have to say that before you can accumulate at least $5,000 beside your emergency fund and you are free of debt. Just put that money in to a CD. Once you have $5,000 "free" money, then you can start to invest. Try some mutual fund first, once you feel comfortable you can move into stocks.

Answer 8

You are in a great situation to make more money!
There are plenty of great web sites that will make it easy for you to succed in the stock market.
With some research a little knowledge you are on your way.
Try http://goldenbullpicks.com
I think they have what your looking for.

Answer 9

Wha