I'm 18 and entering college. Where should I start investing?

I believe that being able and aware of investing when you are young can give you a good advantage. So, I want begin my investing as soon as possible. Where should I start?

Be careful when choosing an investment vehicle. Some require taxes on gains or penalties for early withdrawals.

You're 18 and not rich. You want to invest. Great. I would say either an IRA, 401(k), or a plain old savings account.

If your job offers a 401, go for it. Since you're young you can afford to make aggressive investments. If you loose money, you can make it up in a few paychecks.

STAY AWAY FROM CREDIT CARDS!!! Well, have one and use it sparingly. Those vultures selling credit cards to students won't say how much you spend in interest after a while. Plus, if you screw up your credit early on, it could take a decade or more to fix.

This is what I did. 2 years at community college, worked part time, served in the Marine Reserves. Got my AA, no debt.
Worked 60+ hour weeks for 2 years. Started on BS part time then full time while working full time. Graduated with relatively minor debt, thank you GI Bill.

Invest small then gradually increase. Your first major investment, your education. Then when you have money to play with, invest. Start young, but make sure you can afford it, first.

At this point, if you're starting college, you're going to be investing just about everything you have in tuition.

Don't get me wrong, I applaud the effort, far too many people don't think enough about the future or about fiscal responsibility (heaven knows our leaders in Washington don't).

But if you're just starting college, worry first about paying for that and getting good grades, and start saving as soon as you have an actual positive net cash flow.

Now! Its ok to start small! If you ever get a chance to look at an amortization table it will demonstrate how fast money will grow the sooner you get started. If you dont have enough money to buy the minimum shares of stock, try mutual funds. Another very low risk to invest is get a Bank CD (certificate of deposit). They will hold your money for a specific amount of time and pay you interest during that time. Typically CDs (depending on the bank) range from 2-4% APR on CDs while stocks traditionally give a modest (but more risky) advantage of 10% APR (annual percentage rate). For more information on investing try looking at this site: Investing 101 http://beginnersinvest.about.com/cs/newinvestors/a/011201a.htm

You'll hear a lot of people tell you where to start investing, such as a Roth IRA, CD, 401K, etc. That may be fine for them, but will those investments fit your needs?

Before you start investing, there are 3 questions you need to answer. They are:

1) What are my income requirements? For example, do you want to return 10% a year? Do you want to have $1 million by the time your 40 or 60 yrs old, etc.?

2) What are your time horizons? Meaning, when would you like to have this money. Do you want to start your working career with $100k in the bank? Do you want to be a millionaire by the time your 35, etc?

3) What are your risk tolerance levels? In other words, how much risk can you handle?

For me, the answers are (these are overly simplistic, but you get the point):

1) I want maximum profitability
2) I want returns within 2-4 days, 2 - 3 weeks max.
3) I have a very high risk tolerance level.

I'll give you an example. Back in 1998, I was short the Swiss Franc. The Dow plunged 558 points in 1 day and my and the Franc blew thru my short positions. I lost the entire investment, plus some (something like $5000). To me, it was not big deal. It was only money. I wasn't hurting for cash. But, most people would have freaked out if they lost $5k in 1 day.

I'm a very short term trader, I don't want to be in for long periods of time, I am a very short term trader. Plus, I want maximum profits. That's why I trade derivatives and 4X. I can get the most bang for my buck, in a short period of time and I have a high risk tolerance level.

People tout stocks and say, "Hey, I got a 25% return on my stock in 1 year", which is really good for a stock trade. But for me, I got a 387% return on a trade in stock index contracts, in get this -- 3 weeks. Now that trade had a higher risk value as I was trading in highly leveraged derivatives contracts, but that's what I thrive on.

So before you go taking other peoples advice on what you should invest in, define for yourself what investments conform to your style and personality. If you're not sure, consult with an investment pro to help you define your parameters.

Believe me, if you're a risk taker, you aren't going to be satisfied investing in something that takes 40 years to double. That would be like an adrenaline junkie trying to get his adrenaline fix from take a walk in the park when he wants to be extreme mountain biking, catch my drift.

Anyway, good luck in finding what is best for you. Oh, and one more thing - continue learning for the rest of your life when it comes to investing. It is a field where education never ceases.

start with a 401k if possible, perhaps a simple savings account, start by puting away 20 % of your pay check each month, bonds are also a good way to secure yourself for the later years.

I would put some of your money in a ROTH Ira.

don't let them make you a indentured servant by taking on a lot of student loans. you can dig a deep hole with those loans and their not forgiven

Invest in your education, when you through with that you can then start investing.

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Mutual funds. NEVER go for GICs (Guaranteed Investment Certificate) because it's not in sync with inflation. You'll be lucky if you pull even after that. Mutual funds isn't in line with it either, but at least the return rate is better so you can actually make money off interest. Try this mutual funds company called Templeton. From what I remember from my finance days (which was half a semester), that'st he best one. Good luck.

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