I am 19 years old and people have told me, that if they wish they could go back, and do something differently, they would invest early. I want to start investing now and be ready for the future, but i have no idea how to start. Where do i start, like who do i go to or talk to about it. I know i can afford to start to.

hybridtek

I think i wouldn't need 5 thousand dollars to get started, that is kind of a lot at my age. I think putting away a little money would even help in the long run and not waiting till i am almost retired to start saving. After all isn't if you double a penny 32 times you can get 1 million dollars. So starting even with a little early would benefit I have heard. Where to start when im such a noob

GlindaofOz

Well if you are still trying to amass capital I would recommend opening a high yield savings account (like one at ING). That way you are making money on your savings. This will also give you time to do more research and try to learn more about the products that are out there.

That penny thing is if you put away a penny day in a high yield account and allow it to earn interest each day.

ScottGem

What you need to do is establish a budget. Figure out over 3-6 months, what you spend on things like rent, insurance, food, entertainment etc. Budget it some savings in that. Start off with a high yield savings account. One you build it up into 4 figures, you can then start looking at putting it into more long term investments.

Once you start working, hopefully your job will offer a 401K plan, utilize that to the max.

rkim291968

Here is another vote for no-load mutual fund. You have choice of a lot of proven funds. You can start with small amount, and regularly deposit even smaller amount. You can even make the fund to be your IRA account if you haven't already. That way, you get tax break as well.

I like the fact that you are only 19 and is thinking about investing. Imagine. $10000 invested today will be $174000 in 30 years if your average yearly return is 10% (= S&P 500 historic return). If you save more money every year, it will help you retire at age 50.

hybridtek

is it true that with a decent investment, every 7 years the money will double?

Clough

I'm not sure what you mean by a "decent" investment. One thing that how much money grows greatly depends on where it is invested. I have seen a $5,000 investment that I made in a Dodge & Cox Stock Fund go to about $10.000 in five years. I have also seen it diminish greatly in recent times because of our economic situation in the U.S.

morgaine300

Not taking taxes into consideration, an investment at exactly 10.41% per year will double itself in seven years.

Assuming you can get that amount every year, and have it guaranteed. I have "decent" investments get almost 20% in a good market, but they don't stay that way over the long-term. Higher returns come with higher risk. And nothing is ever guaranteed.

So CAN an investment double in seven years? Yes. Will it? No one knows. If you want to invest, you must learn early the difference between "can" and "will."

Now I have a question for you. Are you asking about the seven year thing with dollar signs in your eyes, and getting all excited over the prospect that money could grow this fast? If so, then take several steps back and settle down. Thinking greedy gets you into trouble.

Starting out, I think a nice 500 index fund is a good idea. The market in the long-run goes up. (As long as you don't panic and bail out during the bad times.) As time goes by, your portfolio grows, and as you learn, you can expand into different things. In fact, the younger you are, the riskier you can be. That doesn't mean you can just jump into a bunch of risky stuff. But the futher away your goals are, the more risky you can be, and as those goals come closer, you get less risky. But you still need to stay balanced and take the time to learn. Even a well diversified portfolio needs your basic large-cap domestic stuff. I have a fair chunk in a 500 index fund. (I'm also a bit partial to my T Rowe Price Capital Appreciation fund.) So it's a good starting point. The one waiver I'd stick on that is that you don't want to be dumping short-term money into stocks.

Also remember there's more to it than just numbers. Like a good management team. A good history does no good if the fund has just been taken over by an idiot. :-) Of course, that's another nice thing about index funds -- they aren't managed and their expense ratio is very low.

Pull in the reins, relax, learn. Starting early is good. The discipline is also good. But don't let greed run you.

Clough

I couldn't spread the rep so soon, morgaine300, but I just wanted to say, excellent answer and I'm glad that you are around here!!

morgaine300

Thanks. In 20 years I'll let you know how well my advice does for me. LOL.