[hybridtek]

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.

[Clough]

I don't know how much money that you have to start investing. But, a couple of places that I would investigate investing would be Dodge & Cox Funds as well as Vanguard - Mutual funds, IRAs, ETFs, 401(k) plans, and more

These two outfits have done really well for me. They have proven over time, to be realatively secure for investors and to make profits for those that are investing.

Another thing that you might try, is going to a bank and seeing what a person there has to say about investing. For a start, at your age, an initial investment in a CD may be the way to go.

If your parents have a tax attorney, he or she may also be able to guide you in the investments that you make.

I am hopeful that others will come along to offer their advice and opinions, also.

[hybridtek]

I was looking to invest in the stock market in some long term way. I was told since I am younger to be more risky in ways that I invest, like to not do CDs but I don't know.

[Clough]

The two sites that I referenced do have stocks available in which you can invest. They are investment firms that are excellent ones in which to become involved.

[nicespringgirl]

Amass capital!
Before you begin investing in the stock market, you want to save at least 5 thousand dollars, preferably 10 thousand. This is so you can diversify your risk and not put all of your eggs in one basket. That's not to say you can't invest while you're waiting to amass that capital. If you have less money, consider buying a mutual fund. A mutual fund is a company that owns a collection of stocks. By buying a share in a mutual fund, you own a piece of all of those stocks as well. But as far as individual investing goes, you will need at least 5 thousand dollars.

[ScottGem]

Without knowing how much money you have to invest, I would suggest mutual funds. You want to invest in ones that are long term capital growth oriented. A mutual fund can give you a diversified portfolio with a minimum investment.

[GlindaofOz]

Mutual funds are a safer investment for the long term. In my opinion you have to really know what your doing for stocks to be profitable. You have to really understand the flow of the market and not get nervous (thats how people lose money). With you age and limited knowledge I'd recommend a Vanguard Account you can typically open one with $2,000.

[nicespringgirl]

No-load mutual funds allow you to invest without incurring up-front sales charges. No-load mutual funds are just like other funds; you can choose them using the same strategies. In the end, however, you get to walk away without paying for the opportunity to invest. There are, however, other fees and charges to watch for with no-load funds. :)

[GlindaofOz]

I would also recommend doing independent research. "brokerage firms" (like Edward Jones) tend to sell you their product and won't recommend anything outside of their realm. Your best interest isn't their best interest.

[nicespringgirl]

Don't be a fool and invest in Mutual Funds that carry a Sales Load. There are plenty of great companies (Fidelity Investments, Vanguard, Scottrade) who will help you choose the best Mutual Funds for you without having to pay the unnecessary charges/expenses associated with loaded mutual funds.

[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 I'm 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 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]

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

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, 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 further 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.