sky2evan
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Congratulations for starting young! The first step to getting rich/retiring/achieving any goal in life = planning & starting early.
Instead of asking what are some good things to invest in, you should investigate and educate yourself about the available options, and make these critical choices and decisions by yourself. They are your own finances, so you should attempt to take full responsibility for them as early as possible. Why ask a question, when you can explore & discover the answers for yourself? Because in the future, you will definitely need to know how to find the answers on your own if you ever want true confidence and peace of mind. (However, many young people your age don't even think this question is important, so you are far ahead of the pack already.)
Self-responsibility -> Self-education -> Self-success.
There is lots of free stuff on the internet or in the library where you can begin educating yourself. Learn about: different investment vehicles, portfolio allocations, terminology, and successful (and failed) stock picker stories, strategies & philosophies.
Here are some tips from my own experience:
1. First, invest some time in educating yourself about investing before you do it. Then second, invest your money. NOT the other way around! Prepare, then Decide.
2. Focus on Saving in the early stages, not investing. Build and save a sizeable base sum (2-5K, more is obviously better), then Invest. Investing 1K and getting 10% is a gain of $100, while investing 5K @ 10% is $500. You can still invest with 1K, but put your main focus on Saving. Save, Save, Save. But at the same time, remember to try to do a good job in whatever you are doing! Don't focus on money THAT much - try to do jobs you enjoy, can get better at, learn from, take pride in, and truly help others with... which will usually, ironically, help you make more money and save more.
3. Don't be too greedy, and don't be too afraid. Your buy/sell/investment decisions should not be based on emotions. You are your own worst enemy, and you could make decisions that kill your investments. That is the irony: your desire to make money, could very well cost you to lose it. In a sense, you will have to learn how to divorce yourself from your money - to not care too much about it. Prices go up/down, and you need to learn how to not let your happiness go up/down with them. Consequently, this means centering your life happiness not on your money or retirement. You are NOT your money, your retirement fund, or your job.
4. Find/Develop/Refine an Investment style that is most suitable for your own personal taste/abilities/goals. That may include safer ETFs, funds, indexes, or "riskier" individual stocks. I see absolutely nothing wrong with a teenager picking individual stocks (you can start with the well known ones like Microsoft, et al.), as long as you have educated yourself about those stocks, have solid buy reasons, and are willing to take full 100% responsibility for your picks. Each person's interests, temperament, goals, risk-tolerance, analytical & judgment ability are different. There is no one-size-fits-all investment portfolio that will fit every 16-year old.
5. You'll make mistakes - so take the opportunity to learn from them. Like nearly every other endeavor, it's a process of self-discovery, self-understanding, and self-evolution. While investing appears to be only about growing your money, it's also about growing yourself.
Best wishes & many apologies for the lengthy reply - |
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