Lux Investing
How do you invest, how much money do you need to invest?
I'm 16 years old, and would like to invest, but want to know how it works.
Public Comments
- You give your money to an investment firm and they use it to buy an employee a summer home in the Hamptons.
- You have to be 18 to invest on your own, but here are some tips on how to get started. Some companies allow you to purchase their stock directly from them on an automatic investment plan. This simply means that you are agreeing to invest a set amount each month. You can also set up a similar investment strategy thru a broker. Another option is to look for mutual funds that allow you to start with a minimal investment if you start an automatic investment plan with them. What to invest in is different from one person to the next. It depends on your goals and your ability to accept risk. Everyone has goals that are either current, mid term, or long term. Current goals are expenses that are coming up in the near future. An example would be saving to pay you annual car insurance. That would be money that you would need to keep safe and readily available when you need it. Mid term goals are things that you will need money for in about 3 to 5 years. Lets say that you intend to buy a new car in a few years and want to start saving for it now. You still don't want to take risks with this money, but you can afford to invest it for a particular length of time. A bank CD is a good example. Your long term goals are those things that you will need money for in 5 years or more. At 18 they may be things such as: buying your first home planning on having a family buying a second home/vacation home planning for retirement. As far as that last one goes...you are never too young to start planning for retirement. Educate yourself well before taking the leap.
- I would strongly encourage you to invest in your own financial education first. That's what I did (I'm 21 btw). Apparently, there are no minimal amounts needed to invest. But there are rules among financial institutions (ie Prudential, i'm investing in Prulink funds with them), and restrictions on how the min no. of shares you need to purchase. If I'm not wrong, there are some shares on the US market which requires at least 1 lot, some ETFs that can allow a minimum of 1 unit. PS: I'm not from the US
- Unfortunately, in the U.S., you have to be 18 to have a noncustodial stock account. I would recommend the book The Warren Buffett Way (by Hagstrom), which you can get from a local public library. It outlines the stock-picking strategies of Warren Buffett, arguably the world's greatest investor. Fred
