If you have recently been hit by the bug called ‘investing in stock’, and wants to know how to make millions from it then perhaps you have landed in the right page. I am not sure where to start, actually it is not easy to to share investment ideas for young people as in young age people focus more on ‘making money’ instead of ‘learning money’. Most young people assume that the idea of making investment in stock market is to earn some easy money. But let me tell you that stock market is not going to give you easy money. You mag get lucky sometimes, but more often than not, stock market will show you more bad days.
I’ve always heard people say that there is no free money and you must work for it. But in stock market people think opposite, do little and make more money. What I will suggest to my young readers is that, stock market investment will not grow your $200 to $100,000 in a few months. Instead of expecting to double your money in few days or months a much better approach will be to start learning value investing and increase your investing intelligence.
The best Investment Idea for young people is to start investing with a small amount. There are several ways to convert that small amount of something big. So rule number one of stock investment is that you must allow a decent amount of time (min 3 years) to your money to stay invested. Young people shall not be misled into believing that your one-time investment of say $200 can make you a millionaire by the time you retire. But if a from the young age you start putting $200 frequently (say monthly) in your investment account then there is good chance that you end up being a millionaire by time you retire from your job.
The best investment idea for a young investor like you will be to open a online trading account with a reliable brokerage firms. There are a lot of them available these days, and they charge not more than fraction of percentage as their brokerage charge. Choose what suits you best. Some even come with an expensive additional features such as stock trading software and analysis tools. But for young investor, I recommend going with the most basic features. By the way we are not going to use our trading platforms like a professional does. Remember that we are only starting to invest a small amount of money in the beginning.
There are also some other options such as Systematic Investment Plan that you can use to invest in stocks, but it would be a topic for another time. If you would rather like someone else manage your money for you, then there is always the possibility of putting your money in mutual funds. But where’s the fun in that. Of course, I strongly suggest that, you as a young investor, shall also put large part of your money in retirement plans as they not only compound very fast in long term but also gives tax advantage. But its true that nothing beats the fun of investing in stock market on our own. So how a young person play the stock market safely? The best idea will be to put that only that money in stocks that you are ready to lose, the money does not affect your survival. Never forget that stock market is very risky if you are not an expert. So you should invest that money that you have in your pocket after after paying the rent, car, credit card payments, etc. in short in the worst case if you lose the money you should not be on the streets.
Now a young person is all set to start investing in stocks. If you do not want to take too much risk then you have possibility to invest in equity through an ETF (exchange traded funds). ETF give an advantage of excellent investment diversification to young investors without raising lot of complications. Index linked ETF’s invest in a basket of all shares listed in the U.S. market. Its more like a mutual fund, but unlike a mutual fund you can actually trade ETF’s like stocks. You can buy and sell any time through your online trading platforms. I said that ETF will give you a diversification advantage, so what? Due to diversification ETF’s prices are not as fluctuating and volatile as single stocks. It is possible to see individual stocks see a dip by 10% is a day but even in worst of time you will hardly find ETF performing so badly.
The best Investment Idea for a young person to start stock investing very early in their life. Buy stocks of companies that you know and would love to buy their product in the market. If you are a working young man and your company is listed in stock exchange, then buying stocks of your company will not be a bad idea. There can be several great investment ideas for young people, all you need to do is to learn to do stock analysis. I know lot of young people will not like this idea of taking so much head ache, but if your want to become a serious stock investor then you cannot avoid stock analysis for lot of days.