How do you invest?
Answer:
I began my education in to investing when I was your age. I started by helping my uncle open a Swiss bank account. He in turn took me under his wing and started me on my path to investing. You need to do a lot of reading. You can't start investing till your 18 unless your parents open the account OK your every move. I began working to earn enough of a nest egg to start. At 17 I started. I worked a lot of lame and stupid jobs to get there but I did it. You can too. It won't kill you. Start reading everything you can find on investing. Its the one thing they will never teach you in school so it must be worth while. In fact trading is the most profitable thing you can learn to do. That's the main reason they don't teach it in public school. Public education is just to teach you to be a good employee.
Find a mentor who will spend time with you. Hit the school library and check out everything they have. Get some wade cook books. Never buy anything by wade cook, just check it out. Some books are worth buying. His are not them. But they do a great job of educating the beginner to the mechanics of investing. Not so when it comes to strategy. Learn the In's and outs and then move on to other books.
Start small and build up. You can start out with a simple mutual fund. As your nest egg grows you can branch out into other more adventurous stuff. Your knowledge base will grow as your investment grows. It may be worth it to start with a full service broker who can hold your hand so to speak to get you started. One who lives and works in your area. You want some one who's office you can walk into and visit face to face. He may also have some recomended reading for you. Yes its quite boring. Some of the books I have read are a real snore. However once one of them pays off, it starts to get exciting.
As I told you I started at 17. I retired at 45. I turned 47 just this weekend. I like retirement just fine. All those people running thier guts out to earn a living and I come and go as I please. I get up in the morning and see my kids off to school. I get to work on a few hobbies. Every one else is stressed and busy and complaining about the high price of gas. Not me.
As your earning your money to get started the first thing you should do with your first $4000 is open a ROTH IRA. Your young and it will set you up for life if you do it now. See your broker for details. IF your parents get you started with one now while your 14, my great scott that will be worth a fortune when you turn 59 and a half. If nothing else start there.
If you don't have no money, then you must have some money. I'd invest in a bank certificate .. about a 7 month term at 5.15 interest. Play it safe until you learn more. Good Luck ! :)
You are definately on the right track if you are already wanting to know how to invest at 14. Way to go! For now, you can try stocks, but don't just jump into it. Find someone you respect who invests in stock that will take the time to show you how (a mentor). Invest in things that you like (chances are others like them too).
The other thing you can do is open a savings account or buy some bonds. By the time you are 18 you will be able to start investing in real estate (if you play your cards right). Always keep your credit clean (very important).
Good luck!
I wanted to invest at 14 too, but I did not have any money until I was 17. I began investing then. One of the very first stocks I bought was 10 shares of MMM. Unfortunately, I sold it a year later. A very very stupid thing to do. I do not exactly recall what I paid for it, $50 a share sticks in my mind. It had to be in that neighborhood. Compared to todays price that is equivelent to $1.00 a share at todays prices. I bought 10 shares. That $530 dollar investment (the broker fees were $30 back then) would be worth $40,000 today and I would now have 500 shares. And that does not include dividends. I have no idea how much that would have been over the years. Currently the annual dividend is $1.84 a share so on 500 shares that would be $920. Not too bad but not nearly as good as some stock investments. But better than many if not most.
However, it is very very difficult to hold on to an investment after it has doubled in price. The normal reaction is: Wow, I have doubled my money, time to take my profits and run.
There are mutual funds that have done as well but the main problem with mutual funds is that they have to pay realized capital gains annually which are taxable. That reduces ones gains considerably. They do offer the advantage of diversification. A couple I particularly like are GAM and PENNX. One is a closed end fund (you buy it like a stock) the other is a open ended fund. Both have returned about 13% annually over a very long period.
In the mean time, go to you library and check out a few books on investing. You will be well served in future investments.
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