investing money?

Question

i wanna know if any of you have done this and be successful at it?
How do you start?
what is the minimum amount of money to invest?
what site is good to know everything about investing?

Answer 1

I have made online investment. There was no minimum. I have invested $5,000. Now I am getting 2% interest every month ($100).
Am I successful? Well, I could get even 30% APY. :-)

Answer 2

If you have a 401k plan at work, this is by far your most important investment opportunity. Your employer will match your funds. You will have the opportunity to select stocks, bonds and mutual funds in your 401k plan. Your employer will provide some brochures on how to evaluate these options.

The next most important investment tip is to start putting aside some money regularly from your paychecks. Have it automatically deposited to a savings account or money market fund. Make it a lifetime habit. Everytime you get a raise, make sure at least some of the new money is added to your regular investment savings. Once you've started to accumulate a sizable amount, go to a stock broker or financial planner who you trust to decide how best to invest it. Basically, depending on your age and investment goals, you want to either invest it very conservatively, or take some more speculative options, or split your investment into a couple of these categories and treat them differently under your investment strategy.

Good luck.

Answer 3

Standard investment advice is that you should invest in a diversified mix of stocks, bonds, and money market funds. You need about $1,000 dollars to start. You want to buy a diversified portfolio of stocks as individual stocks are too risky. Most folks have a dificult time buying a properly balanced portfoilio of stocks on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Unless you know what you are doing, it is best to buy mutual funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low cost funds. If you are like most people you will invest part of your money aggressively in stock funds, and part conservatively in money market funds and bond funds. Vanguard.com has an on-line questionnaire which will give you an idea of how to do "Asset Allocation," determining how much to put in each type of fund.

If your company offers a 401K plan at work, try to invest the most you can. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea. If you have children, you may want to consider a 529 plan or other college savings plan that grows tax free.

I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, I would suggest putting ~70-80% of your money in the Vanguard Total Stock Market Index Fund. and ~20-30% in a foreign stock index fund. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion.

Buying a house instead of renting will save you a lot of money in the long run. You don't have to pay rent and you build equity in your house instead. Buying rental property can also be a good investment. However, being a landlord can be hard work, and many people are not good at it. If you don't know how to handle deadbeat renters, you can have trouble.

If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments.

Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.

Sources:

http://www.vanguard.com/VGApp/hnw/planningeducation
http://www.fool.com/school.htm
http://sec.gov/investor/pubs/assetallocation.htm
http://www.diehards.org/readsites.htm
http://finance.yahoo.com/education/begin_investing
http://finance.yahoo.com/funds/basics

Asset Allocation Calculators
(Determining how much to put in stocks and how much into bonds and money markets is a personal decision depending on your financial status. These Asset Allocation questionaires give you a rough idea how to do this. I like Vanguard best, but try some of the other sites as well.)
https://personal.vanguard.com/VGApp/hnw/FundsInvQuestionnaire?cbdInitTransUrl=https%3A//flagship.vanguard.com/VGApp/hnw/planningeducation/education
https://ais2.tiaa-cref.org/cgi-bin/WebObjects.exe/DTAssetAlcEval
http://www.ifa.com/SurveyNET/index.aspx

Web forum: http://www.diehards.org/
(Many investment web forums are overrun by scam artists. This one seems the most legitimate site.)


529 plans: http://www.savingforcollege.com

Answer 4

Read. Read. Read.

Read at least 2 books on investing and one or two on Mutual; Funds. This will give you the right start. You don't have to be an expert. But, don't go into this with limited knowledge. It will cost you a lot.

Stay away from books that promise quick riches.

Answer 5

To answer your questions:

I invest my money without using a money manager or financial planner. However, I enjoy learning about investing. I have been averaging a 15.1% return the past three years.

I think to be successful at investing you need to understand the basics of investing and I encourage you to research the internet to learn about modern portfolio theory, efficient market theory, and learn the definition, risks and potential rewards for investing in money market accounts, bonds, stocks, and real estate. Even if you decide to not manage your money yourself you need to know these things so that someone can not take advantage of you. In general, if you get help I suggest paying a financial planner a set fee rather than a percentage of your assets.

As you learn more you may want to consider other avenues for investing such as private equity or municipal bonds but I would hold off on that for now. Unless you are a sophisticated investor with a lot of money these asset classes most likely will not be helpful to you to invest in and even if you are does not make sense in many cases either due to conflict with personal goals or risk adjusted return.

So along with education another thing you need to start investing is to understand your personal goals. What are your short term goals? Your long term goals? How much money do you need to meet these goals? Are you able to sleep at night if you loose part of your investment over the short term? Can you survive if you lose part of your investment? The answers to these questions will help you determine the asset allocation and the amount of risk you are willing or able to take.

For example, if you are investing for a goal that you want to accomplish within 3 years or so, like a down payment for a house, it may be best to save this money in what would be considered a short term investment vehicle such as a high yield money market account. This investment barely keeps up with inflation but it protects your investment from loss so that you will be certain that you will have the necessary funds to meet your goal.

However, if this money is for a long term goal, say your retirement, then you will want to consider an investment vehicle that will appreciate and grow your wealth without succumbing to inflation like a short term investment vehicle might. In this case, I would suggest investing in a broadly diversified index fund such as the total stock market index fund offered by Vanguard. Although stocks can go up or down or become worthless, if you own a broadly diversified mix of stocks the risk to your portfolio of investments of any one stock becoming worthless is reduced significantly by owning the other stocks or investments. Also, even though the stock market goes up and down, over the long term history has shown that the market on average rewards those who take the risk. So if you own the market you will get the reward for the market risk. However, if you just own one stock, you will have the intrinsic risk of that particular company which can be significantly greater than that of the market. Unless you are able to understand this risk and be able to assign an appropriate value for the stock, I would suggest not buying a single stock right now and focus on investing in index funds.

An important concept to understand is that time is your best friend with investing. The earlier you start the more you will benefit from compounding. Also you want to invest in a way that keeps your costs low. You can not always control the return of your investments, like stocks, but you can control the costs.

There is a lot to learn but it is important to do so and it is worth it. I have linked some references that hopefully you can find useful.

One important thing to add is to be successful at investing you need to be successful at controlling your spending habits. Try to consider your whole financial picture in your asset allocation. For example, the size of mortgage debt you have or credit card debt you have will have a significant impact on your overall investment return. If you have credit card debt you are most likely better paying that off before investing the money elsewhere and figuring out how to not have credit card debt. That will most likely pay more than any stock investment you would make.

Answer 6

A good place to start is http://www.top10traders.com - you can create a "practice" portfolio - it's free - each month the site ranks the best performing investors.

Answer 7

If you are just starting off, choosing a good safe mutual fund is the way to go.