How to Invest Money
It is safe to say that stocks and crypto currency is the new age of money and technology in the world right now. It seems that everyone is investing in these new platforms and itching to make it big. As a teenager, you're probably wondering whether you can join the rest of the world and their endeavors with investing. And whether you can truly make it big.
In this post I will give investment tips to teenagers who are looking to get started with investing money, and don’t know how or where to do so. These tips will be geared towards teenagers who don’t have a whole lot of money to start off with, and are looking for safe-to moderately safe investments. But keep in mind, these are only tips and suggestions that work based on how the market is doing, they do not guarantee any profit.
My first strategy for investing money is for teenagers who don’t have a whole lot of money to invest with and are looking for a low-risk investment.
1. Invest 80-85% of your money in mutual funds
A mutual fund is where an investment company takes money from different investors, and invests that money in different assets. This way is ideal for beginning investors, as they don’t need to pick and choose what stocks to invest in, instead a professional does it for them. Moreover, the professional will invest in a multitude of assets creating a diversified portfolio for the investor. This is a an added bonus as an individual stock will not influence whether your profit goes up or down, instead your mutual fund will do well based on how the stock market/American economy is doing overall. If the stock market is doing well, you should expect your mutual fund worth to go up, however if the stock market is not doing well, you could not make much of a profit or lose money.
Mutual funds can be a little risky, but not as much as stocks since they don’t rely on an individual stock but instead a multitude of them. Investing 80-85% of your money in mutual funds will allow you to make a safer investment, while expecting a pretty good profit. One thing to remember while investing in mutual funds, is that they are a long-term investment, meaning they shouldn’t be traded often.
If you are looking to get started with mutual funds, contact an investment advisory such as Vanguard. Companies like Vanguard, Fidelity, and Charles Schwab Corporation will manage your money for you. For example, you can put your 80-85% of your investment money in Vanguard’s S&P 500 index fund. This would probably the best fund to invest in as a beginner as the S&P 500 index tracks the 500 largest companies on the stock market in the United States.
2. Invest your remaining 15-20% in bonds
The left over 15-20% you have should be invested in bonds. Buying bonds are similar to issuing a loan. You are giving the US government some money, and they will pay you that money back in increments along with some interest. The reason many people invest in bonds is because the interest you receive is higher than what banks give you. This method of investing is ideal for safe investors as you are sure to get your money back along with some profit, the only drawback is you’re not going to get much of a profit.
Investing in both bonds and mutual funds gives you a a chance to make a profit, but at the same time your investments are safe. This investment strategy is ideal for teenagers who don’t have a steady/high income and don’t have much money to start off with. So if you are ready to start investing, follow these easy steps and get introduced to the world of stocks and money!
