By Jamal Ray
Have you ever wanted to invest* in stocks but didn’t know where to start? If you’re 18 or older you may invest on your own, if you’re 17 and younger, you will need a parent or guardian to start an account with you.
Here are some tips to help you learn more about investing.
Start by saving as much money as you can. This can involve saving a percentage from your income, or a certain amount each week or month. Start by building an emergency fund. It’s “ … always good to invest long term, unless you need it for an emergency”, states Luke, an investor at Great Point Capital. Having savings in the bank can ensure that you have easy access to funds in an emergency without paying high interest changes with a credit card or payday loan.
Remember, paying for college is also an investment in yourself and is something you should consider first before you start investing for the long-term. After you have built some emergency savings and you are set with your college costs, you might consider investing for the long-term. Anyone can start investing, you just need a brokerage account (see Javonte’s article on page 14). When you get your first job, be sure to ask about retirement and other long-term investing benefits. Your employer can be a great place to start. Starting out investing can be stressful. Investors often start by investing into mutual funds, which are funds that allow you to diversify and invest into large number of stocks in one fund for small amount of money. You can start investing with as little as $25 -100 in some cases.
There are many different types of stocks or investment vehicles to invest in. If you want to invest in the largest amount of companies, consider an index fund. Index funds allow you to invest into hundreds of companies for a small amount. This diversification reduces risk. You may also want to consider bonds issued by companies or governments as a reliable, steady income source. Bonds are set loans at a set interest rate for a set period of time. (You will need to find funds or an ETF* to purchase bonds.) Both bonds and diversified mutual funds are routes to consider when starting investing. According to William Heard, CEO of Heard Capital LLC, there are some things that come with investing such as “being patient, it’s the key to being successful.”
Hopefully, these tips are helpful for people who are interested in investing!