Investing? need help.

**jmetsrule** · 12-23-2015, 08:30 AM

That's great that you're starting so early. I will add a small portion of advice.

The key to being a good investor is actually being a good saver. At 15 or 50-years-old, you're always going to have to budget your money. This means balancing the money you need to live in the present day vs. the money that you will need for the future. My advice would be the following:

Divide your paycheck into the following four categories by percentages:

1) Fun Money (You gotta' have some fun at 15)
2) Living Expenses (deodorant, clothing, food, etc.)
3) Retirement (This is important. If you start now at 15, you could be a millionaire by the time you retire. I'm not joking.)
4) Emergency Fund (This is a savings account that you keep money that you may need in case of an emergency.)

Then try to reach these goals.

1) Pay yourself your Fun Money at the beginning of the month, or as your paycheck dictates, and stick to this amount. Don't pull from categories 3 and 4 just for fun. If you can do this, congratulations--you've literally learned a lesson that takes the majority of people 40-50 years to learn. It's not easy, but well worth it.

2) Open a checking and savings account. I can't tell you where to do this. I have a Capital One 360 account for my savings and I use USAA for checking. Talk with your mother about some of your options.

3) Save one month's salary as your emergency fund. When you reach this goal, add another month until you have three to six months saved.

4) Open a Roth IRA account. This is for your retirement (investing). I would open one at Vanguard.com. Remember, I said "Roth" IRA, NOT a traditional. Every month, put 15-20% of your earnings into this account. You can put in a maximum of $5500 in it every year. That seems like a lot right now, but when you start earning a lot more it will seem like it's too small of an amount. Keep putting money in every month until you have at least $1000 dollars in the Money Market Settlement fund. (This is like a savings account that you will use to move money into investments.) Once you have a 1000 dollars, you can now start buying investments: a Target Retirement Fund is nice.

5) Put the remaining money you have at the end of the month into your savings account to reach your Emergency Fund goal. Once you've reached your goal for the Emergency Fund, then put the remaining money into your Roth IRA.

6) If you work at a job that offers a 401k and a match, meaning for every 5% or so of your paycheck that you put into the 401k, your company will match that amount, make sure that you always take the match. It's free money!

7) Retire at 65 with plenty of money to live comfortably. And look back on the moment you decided to be responsible with your money as one of the most important decisions you've ever made.

8) Pass this knowledge on to others you care about.

Good luck! It isn't easy at your age to think about these things, but I hope you do.

**autoxer** · 12-23-2015, 09:57 AM

There's a lot of good advice in jmetsrule post!

Here is a good primer on investing in the stock market:

Stock Series

http://jlcollinsnh.com/stock-series/

**clatoden99** · 03-07-2016, 02:56 AM

If the goal is to become a trader or investor, I think the first step is to understand the framework of markets and existing theory about stocks, which may be imperfect, but sets the stage for how to find interesting insights or patterns about stocks later on.

Start with learning the foundations -- microeconomics, efficient market theory, CAPM, models for growth and dividends, etc. Within those foundations, it is not possible to outperform a market investment in a risk-adjusted way. But you would still learn a lot about what the market looks like and how it generally operates.

Once you know how "the system" works, you can start thinking about ways to hack the system.

Pick some stocks or sectors that you feel you have insight on, whether that comes from understanding the fundamentals or quantitative models. Start trading them with a small amount of capital. You will soon feel the force of efficient markets, where even with the insights you may have, you will have tough losses sometimes and returns may or may not exceed market returns.

But by being thorough and methodical and documenting exactly what insight it is that you are acting on, what "efficient markets" would suggest would happen, how your insight further refines that prediction, and how the outcome differed from that, you can start to gain an edge as a trader and/or investor.

**Tanuja Chandel** · 03-09-2016, 12:57 AM

Investing in the stock market is one way to increase your wealth and security, but it is not without some serious risks. In order to invest properly, you need to understand what the stock market is and how it operates.There are two main types of stocks, common and preferred.
Common stock is the form of stock most recognizable to newcomers. It is a share in a company. Common stock can give some of the highest returns in investing but comes with the largest risk.
Preferred stock gives ownership like common stock does, but does not bestow voting rights.The dividends paid out by preferred stock are fixed instead of variable like common stock.Preferred stock is a more secure source of dividend income than is common stock.
Stocks operate according to the law of supply and demand. As the demand for a stock increases and more people are interested in buying than selling, the price of the stock goes up. This is because there is less supply of the stock and each share becomes more valuable. Stocks generally increase in demand as the company succeeds, and their demand lowers if the company performance suffers.
Good investors invest for the long term. If you are looking to cash in right away, the stock market might not be a good place to put your money.

**scottbiddick** · 03-21-2016, 07:17 AM

Choose the appropriate type of account. Depending on your investment needs, there are several different types of accounts you may want to consider opening. Each of these accounts represents a vehicle in which to hold your investments.

**polunio** · 04-24-2016, 06:17 AM

Investing in stock market is good for short term and long term.. Depends on your goal, the strategy that you will use..

**sv2007** · 04-24-2016, 10:44 AM

When I think of the stock market, I think long term and persistence. Playing the averaging game where you put steady money into it over time to smooth out the bumps.

I recently wrote an Android app to help a motorcycle forum realize the time value of money and illustrate why I like the slow and stead approach to stock market. Search for "whatif S&P500 calculator" on the google play store; I think you'll be surprised with its results. (Note: I'm not making any money on it. I'm retired and program as a hobby so I don't bother with ads or anything. Kind of like this post is free advice to you.)

Since you are new, these days, anybody can invest in the "S&P500" fairly easily by buying one of the many S&P500 ETFs. They are an approximation of the S&P500 that tracks it well (there's some lag and expense, but the computers move pretty fast). The one I like is SPDR SPY, it's the first and (technically not an ETF) trades high volume; but it costs the most.

However, having said that (and wrote the App for S&P500), I should disclose that I only have a small amount of my asset in S&P500 (mainly parts of my 401ks). Recently I read a book call "Get Rich Carefully" by Kramer. I love that book because almost everything he said just matches my stock investments for the past 20+ years. I believe in stock picking (but I don't believing in timing the market, which Kramer believes).

I use S&P 500 because it is easy bet for newbies and performs pretty good. A lot of funds try to compare themselves with it (and many can't even beat it).

Just remember, even $3/day ($91/month) can be used to start your investment egg.

**ygrey** · 05-16-2016, 01:33 AM

Great that you wana start so early. The most important thing is to determine your investable income. Start by making you budget monthly/weekly.

See where you could save and how much more money you could invest. At the same time you need to have a safety net in place. For starters invest small amounts in Mutual Funds and learn the trends of the market.

There are various demo market that give you virtual money to invest. You could start off with a few and then once you get a hang of it, get into the real deal.

Investing? need help.