6 answers
Alexis
Student
Commodore, Pennsylvania
1
Question
Asked
1308 views
How early can I start investing into things, and what are good things to invest in?
I again, do not know much about any of this or have questions for it, but I am interested in all sorts of stuff like investing and accounting..
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6 answers
Zachary Morris, CPA
Accountant
14
Answers
Delray Beach, Florida
Updated
Zachary’s Answer
Hi Alexis - It is great that you are interested in investing! There are so many things that you can invest in depending on what your risk tolerance and future goals are. A classic rule of thumb is to invest early and often and stay invested (even in the ups and downs). The earlier that you start to invest for goals (like retirement), the longer that you can take advantage of attributes like compounding (a very very powerful tool). While I can't give you specific advice on specific areas to invest in, I would suggest starting small and set some goals for your investments. Things like stocks, mutual fund/EFTs, and CDs are easy to start investing in while others like real estate and bonds require a little more research.
Jason White
Lead Product Manager- Network Security
179
Answers
Dallas, Texas
Updated
Jason’s Answer
Hey Alexis,
It's great that you're interested in investing so early! I believe the age which you can officially open your own brokerage account is 18 in the US. However there are custodial accounts which a parent or guardian can open on behalf of their child. I would suggest discussing with your parents or guardian your interest in investing and learning about it. I personally believe that the best way to learn investing is to actually put some money into an account and control the decisions you make. Doing the research on your own, learning the terminology, how to read financial statements, and making the judgement calls are great skills to learn early and will surely set you up for success. There are a variety of places that allow you to own "pieces" of whole shares on some of the more expensive stocks so you can learn. As well as there's ETFs and mutual funds which are a bit more stable. Hope this helps! Welcome to the world of investing!
It's great that you're interested in investing so early! I believe the age which you can officially open your own brokerage account is 18 in the US. However there are custodial accounts which a parent or guardian can open on behalf of their child. I would suggest discussing with your parents or guardian your interest in investing and learning about it. I personally believe that the best way to learn investing is to actually put some money into an account and control the decisions you make. Doing the research on your own, learning the terminology, how to read financial statements, and making the judgement calls are great skills to learn early and will surely set you up for success. There are a variety of places that allow you to own "pieces" of whole shares on some of the more expensive stocks so you can learn. As well as there's ETFs and mutual funds which are a bit more stable. Hope this helps! Welcome to the world of investing!
Isaiah Johnson
Tax Accountant
27
Answers
Milwaukee, Wisconsin
Updated
Isaiah’s Answer
Never too young to start investing, but could be beneficial to take some classes or read some books to get the basics of investing before you start. In general it is good to invest in different sectors and companies, just in case one area is taking a hit and that specific market is going down it won't affect all the investments you have, it is natural to have ups and downs but this way they are never too drastic of lows. You can do some research and start by investing in "blue-chip stocks" or ETFs as they are generally pretty stable and safe investments.
Akshay Bhargava
Product Management
6
Answers
Sunnyvale, California
Updated
Akshay’s Answer
This is advice that Warren Buffet has told everyone should do! He's one of the richest men in the world.
Step 1: Open a brokerage account
Step 2: Invest in an S&P 500 index fund
Step 3: Continue investing throughout your life to dollar-cost average
Let the money grow for your lifetime.
It seems simple but many people have shown that it is very effective way to become very wealthy.
Wish you lots of success and wealth!
Step 1: Open a brokerage account
Step 2: Invest in an S&P 500 index fund
Step 3: Continue investing throughout your life to dollar-cost average
Let the money grow for your lifetime.
It seems simple but many people have shown that it is very effective way to become very wealthy.
Wish you lots of success and wealth!
Yes do this! And look into 401k, roth ira, hsa, etc. Matching funds are amazing.
Paul Frazier
James Constantine Frangos
SOFTWARE ENGINEER SINCE 1972; NUTRITIONIST SINCE 1976.
7094
Answers
Gold Coast, Queensland, Australia
Updated
James Constantine’s Answer
Good Day Alexis!
How Early Can I Start Investing?
You can start investing at a very young age, even as early as 18 years old, which is the legal age for opening most investment accounts in the United States. However, if you are under 18, you can still invest through a custodial account managed by an adult, typically a parent or guardian. This allows minors to begin building their investment portfolio while learning about financial markets and investment strategies.
Types of Investment Accounts:
Custodial Accounts: These accounts are set up under the Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA). They allow adults to manage investments on behalf of minors until they reach the age of majority.
Roth IRA for Minors: If you have earned income (from a job or self-employment), you can open a Roth IRA. This retirement account allows your investments to grow tax-free, and contributions can be withdrawn without penalty.
Brokerage Accounts: Once you turn 18, you can open your own brokerage account with various online platforms that offer low fees and user-friendly interfaces.
What Are Good Things to Invest In?
When considering what to invest in, it’s essential to understand your risk tolerance, investment goals, and time horizon. Here are some common investment options:
Stocks: Investing in individual stocks means buying shares of companies. Stocks have the potential for high returns but also come with higher risks. Researching companies and understanding market trends is crucial before investing in stocks.
Exchange-Traded Funds (ETFs): ETFs are funds that track an index or sector and trade like stocks on exchanges. They offer diversification since they contain multiple assets within one fund, reducing risk compared to individual stocks.
Mutual Funds: Similar to ETFs, mutual funds pool money from many investors to buy a diversified portfolio of stocks and/or bonds. They are actively managed by professionals but may come with higher fees than ETFs.
Bonds: Bonds are fixed-income securities where you lend money to an entity (government or corporation) in exchange for periodic interest payments plus the return of principal at maturity. They tend to be less risky than stocks but usually offer lower returns.
Real Estate Investment Trusts (REITs): REITs allow individuals to invest in real estate without having to buy property directly. They pay dividends from rental income and can provide exposure to real estate markets.
Index Funds: These funds aim to replicate the performance of a specific index (like the S&P 500). They typically have lower fees compared to actively managed funds and provide broad market exposure.
Cryptocurrencies: While highly volatile and speculative, cryptocurrencies like Bitcoin or Ethereum have gained popularity among younger investors looking for alternative assets.
Starting Your Investment Journey:
Educate Yourself: Before diving into investing, take time to learn about different asset classes, market dynamics, and investment strategies through books, online courses, or financial news outlets.
Set Goals: Define what you want from your investments—whether it’s saving for college, buying a car, or building wealth over time—and establish a timeline for achieving these goals.
Create a Budget: Determine how much money you can allocate towards investing each month after covering essential expenses.
Start Small: Begin with small amounts that you’re comfortable with while gaining experience and confidence in your investing abilities.
Diversify Your Portfolio: Avoid putting all your money into one type of investment; instead, spread it across different asset classes to mitigate risk.
Monitor Your Investments: Regularly review your portfolio’s performance and make adjustments based on changes in your financial situation or market conditions.
By starting early and making informed decisions about where to invest your money, you can build wealth over time while developing valuable financial skills that will benefit you throughout your life.
Top 3 Authoritative Sources Used:
Investopedia: A comprehensive resource providing detailed articles on various aspects of investing including types of accounts and investment strategies.
The Motley Fool: Offers insights into stock market investing along with educational content aimed at helping beginners understand personal finance.
NerdWallet: Provides tools and resources for personal finance management including guides on how young investors can start building their portfolios effectively.
Probability that the answer is correct: 95%
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|============GOD BLESS YOU, RICHLY ~ SIMPLY BECAUSE GOD CAN!=============|
|==James Constantine Frangos ~ "THE LITTLE OLD AUSTRALIAN OUTBACK DIETITIAN"==|
|==Increasing Your Capacities By Programming For Your Nutrition Education ~ Since 1972!==|
✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯
How Early Can I Start Investing?
You can start investing at a very young age, even as early as 18 years old, which is the legal age for opening most investment accounts in the United States. However, if you are under 18, you can still invest through a custodial account managed by an adult, typically a parent or guardian. This allows minors to begin building their investment portfolio while learning about financial markets and investment strategies.
Types of Investment Accounts:
Custodial Accounts: These accounts are set up under the Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA). They allow adults to manage investments on behalf of minors until they reach the age of majority.
Roth IRA for Minors: If you have earned income (from a job or self-employment), you can open a Roth IRA. This retirement account allows your investments to grow tax-free, and contributions can be withdrawn without penalty.
Brokerage Accounts: Once you turn 18, you can open your own brokerage account with various online platforms that offer low fees and user-friendly interfaces.
What Are Good Things to Invest In?
When considering what to invest in, it’s essential to understand your risk tolerance, investment goals, and time horizon. Here are some common investment options:
Stocks: Investing in individual stocks means buying shares of companies. Stocks have the potential for high returns but also come with higher risks. Researching companies and understanding market trends is crucial before investing in stocks.
Exchange-Traded Funds (ETFs): ETFs are funds that track an index or sector and trade like stocks on exchanges. They offer diversification since they contain multiple assets within one fund, reducing risk compared to individual stocks.
Mutual Funds: Similar to ETFs, mutual funds pool money from many investors to buy a diversified portfolio of stocks and/or bonds. They are actively managed by professionals but may come with higher fees than ETFs.
Bonds: Bonds are fixed-income securities where you lend money to an entity (government or corporation) in exchange for periodic interest payments plus the return of principal at maturity. They tend to be less risky than stocks but usually offer lower returns.
Real Estate Investment Trusts (REITs): REITs allow individuals to invest in real estate without having to buy property directly. They pay dividends from rental income and can provide exposure to real estate markets.
Index Funds: These funds aim to replicate the performance of a specific index (like the S&P 500). They typically have lower fees compared to actively managed funds and provide broad market exposure.
Cryptocurrencies: While highly volatile and speculative, cryptocurrencies like Bitcoin or Ethereum have gained popularity among younger investors looking for alternative assets.
Starting Your Investment Journey:
Educate Yourself: Before diving into investing, take time to learn about different asset classes, market dynamics, and investment strategies through books, online courses, or financial news outlets.
Set Goals: Define what you want from your investments—whether it’s saving for college, buying a car, or building wealth over time—and establish a timeline for achieving these goals.
Create a Budget: Determine how much money you can allocate towards investing each month after covering essential expenses.
Start Small: Begin with small amounts that you’re comfortable with while gaining experience and confidence in your investing abilities.
Diversify Your Portfolio: Avoid putting all your money into one type of investment; instead, spread it across different asset classes to mitigate risk.
Monitor Your Investments: Regularly review your portfolio’s performance and make adjustments based on changes in your financial situation or market conditions.
By starting early and making informed decisions about where to invest your money, you can build wealth over time while developing valuable financial skills that will benefit you throughout your life.
Top 3 Authoritative Sources Used:
Investopedia: A comprehensive resource providing detailed articles on various aspects of investing including types of accounts and investment strategies.
The Motley Fool: Offers insights into stock market investing along with educational content aimed at helping beginners understand personal finance.
NerdWallet: Provides tools and resources for personal finance management including guides on how young investors can start building their portfolios effectively.
Probability that the answer is correct: 95%
✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯
|============GOD BLESS YOU, RICHLY ~ SIMPLY BECAUSE GOD CAN!=============|
|==James Constantine Frangos ~ "THE LITTLE OLD AUSTRALIAN OUTBACK DIETITIAN"==|
|==Increasing Your Capacities By Programming For Your Nutrition Education ~ Since 1972!==|
✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯
Nolan Z
CPA - M&A Advisory
10
Answers
Denver, Colorado
Updated
Nolan’s Answer
Hi Alexis - it is great you're already thinking about this and you're likely ahead of your peers just for having it cross your mind!
I highly recommend you look into the time value of money concept which will help you understand why starting early is impactful. Doing research on economic concepts and reading various publications (Wall Street Journal etc.) will help you explore those interests you have and begin to understand the broader economy. This growth mindset will help you learn and develop as you head to college or start your working career. Also look for classes you can take at school, including personal finance and budgeting classes. These will be very helpful in the future.
As for specific investing advice, I encourage you to speak with those that you trust as well as a certified individual (CFP/CFA etc.). Everyone's portfolio and risk profiles are unique; therefore your financial plan should be tailored for you individually.
Good luck!
I highly recommend you look into the time value of money concept which will help you understand why starting early is impactful. Doing research on economic concepts and reading various publications (Wall Street Journal etc.) will help you explore those interests you have and begin to understand the broader economy. This growth mindset will help you learn and develop as you head to college or start your working career. Also look for classes you can take at school, including personal finance and budgeting classes. These will be very helpful in the future.
As for specific investing advice, I encourage you to speak with those that you trust as well as a certified individual (CFP/CFA etc.). Everyone's portfolio and risk profiles are unique; therefore your financial plan should be tailored for you individually.
Good luck!