22 answers
Asked Viewed 451 times Translate

Is it good to start investing at a young age?


+25 Karma if successful
From: You
To: Friend
Subject: Career question for you
21
100% of 20 Pros

22 answers


Updated Translate

Alyssa’s Answer

Do you have more info on what sort of investments? As a general answer - if you have the funds and don't have any crippling debt, I think it's okay to start investing. I would probably explore low-risk options like a savings account or CD. If you're thinking about trading, understand that although there's a chance for a big return, there's also a risk of losing everything you have.


I agree with Alyssa. I think if you are able, it's ok to start investing. In addition to the advice from Alyssa, I think mutual funds are a good. A mutual fund is a mix of investments managed by an individual company. When you invest, you don’t choose specific stocks or other securities; the mutual fund does it for you. The inherent diversification of mutual funds makes them generally less risky than individual stocks, but there are mutual funds available at all risk levels. If you have a job that offers a retirement savings plan, I would also encourage you to consider this as a way to invest, at least up to the point that your employer matches your savings. You will typically have investment options for those funds as well. Colleen Kipfstuhl

1
100% of 1 Students
Updated Translate

Tom’s Answer

It is a great idea to start investing as soon as you are financially stable (paid off credit card debt, have an emergency fund of 3-6 months of expenses saved, etc.). The biggest benefit to investing early on is the power of compound interest. This website (https://www.investor.gov/additional-resources/free-financial-planning-tools/compound-interest-calculator) has a neat calculator where you can see how much of a difference investing early on in your career can make.


1
100% of 1 Pros
Updated Translate

Dana’s Answer

I glanced through the answers to make sure I’m not providing too much redundant information. Lots of good answers, just a few things I wanted to add on why it’s best to start investing early.

First, compounded interest allows for increasing value for paying interest on top of the interest you’ve already earned/been paid from previous years. The longer you invest (and keep the money in your account) the more opportunity there is to compound your interest. May sound obvious but wanted to put the term out there and I didn’t see anyone explicitly call it out or label it.

Second, another great thing about starting early is becoming familiar with investing. If you “lost” $1000 investing early and slowly but learned a lot about the types of investment options, fees, strategies, market performance, etc. then I think that’s a good ROI (return on investment) which can be refined over time.

Last, set aside a specific amount of money, come up with a strategy, work with your parents (as applicable) and try it out. Stick with your strategy for a set amount of time. Examine your results and try it again. I’d suggest sticking with a strategy for at least a year but probably 3-5 years depending on what you’re trying to learn. Best of luck!!

1
100% of 1 Pros
Updated Translate

Tony’s Answer

The short answer is yes. When you talk about investing, are you talking about the stock market, 401K type, CD's, IRA, real estate, etc?

Tony recommends the following next steps:

Do your research on the best investment for you, but saving $ is key
If you are employed, does your employer offer a 401K with matching? If so, maximize this and then invest more in other securities

1
100% of 1 Pros
Updated Translate

Julie’s Answer

Hi Sergio -

Investing at a young age is a great idea. It is important though to worry about your student loans and current debt as well as thinking about the future. If you are able to put a downpayment into a Roth IRA that has a significant interest rate, your money will grow on itself in that account. Adding little by little every year will help it build up over time. You do not have to invest in the stock market at a young age but investing for your retirement is very important. Good luck!


0
Updated Translate

Alejandro’s Answer

Absolutely! I started investing at 19 ( I wish I would've read Intelligent Investor a year earlier). In investing, time is just half of the equation for success and for the ability of your portfolio to be able to absorb rough patches of it's growth. Begin reading about the stock market and it's historic track record. Just know, you can not predict the movement of a stock. If you buy stocks on pure guesses and hunches, you are not investing you are speculating. You are truly investing whenever you really look at the financials of a company and conclude in your own valuation. Intrinsic value. Only then, are you making a smart investment move for yourself. I currently have a lot in index funds, they have great historic records. They won't make me rich within a year or anything, but it adds safe diversification. You'll read about all of this.

0
Updated Translate

Vincent’s Answer

Hi Sergio,
Hi Sergio,
Yes!! It’s never too early to invest. On my 18th birthday (minimum age requirement) I went to a Scottrade Branch and opened up my first brokerage account. Every paycheck I received in my summer jobs went right into the market (Just in Simple Passive S&P Index funds). This taught me how to save and grow my money. I still invest and have seen the power of market growth and compounding returns. I recently bought my first home (at the age of 26) and its largely because I invested as much money as I could into the market. Good luck and do your research!!

0
Updated Translate

Victoria’s Answer

Bottom line: Yes

Read the book "I Will Teach You to Be Rich" by Ramit Sethi.

0
Updated Translate

Kristy’s Answer

I will add by telling you that the smartest thing you will ever do for your retirement self is start contributing to a 401K through your employer as soon as possible and NEVER touch it no matter what (if you change jobs, move it to your new 401k plan & keep growing it). You will be so very glad when the time comes! Until that time, I like Julie's answer as well - start on your own by opening an IRA.

0
Updated Translate

Rohit’s Answer

There is no doubt that one should start to invest as soon as s/he can. I believe that investment is not just about investing tons of money in stocks, saving accounts, real estate or other such options. Saving is investing too. As they say, a penny saved is a penny earned. Typically the mentality is to save what is left after all the expenses during a given period, let say a month. I believe that it should be the other way around. You should come up with a goal - let say 'X' $ should be your net worth at the age of 'Y'. When you have this, you should start to work backwards and decide the amount that you should start to save today. You would find multiple online tools that could help you with all the calculation, all you need to do is enter some basic information and your end goal. You may not have the exact goal and the figure, but do some research to figure out how much would you need on a monthly basis when you retire to maintain a good lifestyle. Once you have the number that you should start with today, you should look at systematic investment. Which means every month you should save a certain amount (no matter how small it may be) in whatever asset class you like, could be a savings account to start with. Once this money is gone, spend the balance, adjust your lifestyle according to it. Remember that credit card debt or any debt in general though tempting can be a big pain. Once you get used to these debts, it is almost impossible to come out of it. So better not to get into it at an early age. Additionally, if you are young, you should look at long term investments with moderate to higher risk. As you age, the asset mix should switch to low to moderate risk class. In any case, investment is a no brainer. While you should start to do so yesterday, it is never too late to do so. All the best!

0
Updated Translate

Kyle’s Answer

Yes it is a great idea to start investing as early as possible. Even if it is just 25 to 50 a month. I suggest downloading acorns or robinhood app onto your phone and invest through that. I suggest your first investments to be high dividend yielding stocks such as ATT or McDonalds - this way you can make and reinvest the dividends

0
Updated Translate

West’s Answer

Yes! It's great to start investing at a young age. Saving money now will be great in the future.

A few options for a new beginner -

Acorns App. This app will allow you to start investing in mutual funds with as little as $1 dollar. This is a very low risk investment and great for a beginner.

Robinhood App. This app will allow you to start investing in individual stocks with as little as $1 dollar. A little more risky than the mutual fund mentioned above.

Certificate of Deposit. This will let you invest money at a fixed rate which you can receive at a later date.

Hope this helps!

0
Updated Translate

Douglas’s Answer

Yes it is! I am 58 and wish I would have started in a 401k early on. It's the easiest way to get your retirement fund to grow as most companies have a match on what you contribute. Not taking advantage of this is just crazy. And the cool thing is you still have control of where your money is invested. Most employees sign up, but don't go further in electing what funds their money is invested in, how much ROI they are getting on the investments, etc. Trust me, start as early as you can and it will be worth it when you are thinking of retiring!


0
Updated Translate

Hsin’s Answer

Hi Sergio,

Yes, it is good to start investing at a young age. Investing at a young age allows you to use the power of compounding. There are many resources that explain what compounding is and how it works (for example, https://www.moneysmart.gov.au/managing-your-money/saving/compound-interest), but basically it is using money to earn money.

Keep in mind that you will also need to determine what to invest in, and you should be careful about who you give your money to, and costs of investing.


Hsin recommends the following next steps:

Try a compound interest calculation to see how much money you will have after one year, 5 years, and 10 years if you saved $100 today at a 2% annual interest rate.
Build a budget to figure out how much you can invest.
Research different types of savings and investments (savings accounts, CDs, mutual funds, 401(k)).

0
Updated Translate

Tammy’s Answer

I recommend starting early with disposable income as it makes following the market more interesting and you can even find groups where you can complete with each other on investments. You don't need a lot of money to start but the sooner you do the more you will learn and you never know you could end up investing in a small company that becomes the next Google or Amazon.

With all investing you do risk loosing your investment, but with budgeting and saving money (skip Starbucks) you could be on your way to financial independence.

0
Updated Translate

Michael’s Answer

Invest in your career and personality. Worrying about money and retirement have their place but can easily crowd what’s truly important. If you can keep your priorities straight then investing won’t be that difficult. You don’t know what the market’s future will be, nor does anybody else. You do know it is full of theives who will try to steal what you worked hard to earn, but they can’t steal a well honed skill or solid personality. Those are yours to keep, and can pay back much more than a flaky 401k can.


0
Updated Translate

Bill’s Answer

Never too early to start investing. When I reflect back, I wish I had started investing earlier. Risk appetite changes as you advance through the stages of life.

0
Updated Translate

George’s Answer

Yes, invest early and steadily. I cannot emphasize this enough - INVEST EARLY in life. But, please, only invest what you can afford to lose. Make sure you have an emergency fund for a rainy day. Disclaimer: I am not a professional financial advisor.

0
Updated Translate

Michael’s Answer

YES. Start investing while you are young and have money to lose (you may not think it but you do)......find something or someone you believe in, learn about them, understand their business plan and invest in them - $5k today will not matter in 10 years unless it is worth $150k......take the risks before you have kids, house, etc.....your welcome to your 10 year older self.


0
Updated Translate

Anthony’s Answer

Yes it is good to start investing at a young age as long as you are not investing beyond your means and make good investments. It is always important to have money available to cover anything you will need to pay for for a decent period of time (The next 6 Months +). Getting familiar with investing and doing so at a young age and starting to invest can have a great pay off if you make the right investments especially if you have a lot of time on your side for these investments to grow. Starting young allows you to take a greater advantage of compounding. This allows your investments to grow and magnify this growth even more utilizing any return on your investment being added to your original investment to have a greater total investment amount so now any % return would be on larger amount of investment leading to higher and higher amounts as your investments grow over time. Feel free to look into compounding and the various calculators online for this to put in amounts to test out over various time periods to see the benefit of timing and compounding. Best of luck with everything and if you are going to invest please do so knowing the risks and be sure to learn enough about investing beforehand and what is a good move for your particular case!

0
Updated Translate

Alejandro’s Answer

Absolutely! I started investing at 19 ( I wish I would've read Intelligent Investor a year earlier). In investing, time is just half of the equation for success and for the ability of your portfolio to be able to absorb rough patches of it's growth. Begin reading about the stock market and it's historic track record. Just know, you can not predict the movement of a stock. If you buy stocks on pure guesses and hunches, you are not investing you are speculating. You are truly investing whenever you really look at the financials of a company and conclude in your own valuation. Intrinsic value. Only then, are you making a smart investment move for yourself. I currently have a lot in index funds, they have great historic records. They won't make me rich within a year or anything, but it adds safe diversification. You'll read about all of this.

0
Updated Translate

Daniel’s Answer

The best thing you should do to begin investing is read as much as possible about it as you can. The sooner you start investing and learning about it the better, in my opinion. Yahoo finance and bloomberg are both two websites to look into. And you should start small because there is always risk in investing but in the long run as long as you have a good strategy and do not make snap decisions you should have no problems!

Setting yourself up for retirement is a great way to start, I suggest looking up and into what Roth IRAs, IRAs, and what a 401k is. Then I suggest opening up an account with a free brokerage company such as vanguard, charles schwab, or Robinhood and starting small with your investments in low risk stocks or ETFs. An ETF is a bunch of stocks comprised into one investment, so there is even less risk. I hope this is helpful but the internet is your best resource and you should research as much as possible.

0