Young Investor

Discussion in 'Ask any question!' started by Superman, Jul 23, 2019.

  1. Superman

    Superman New Member

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    Hello, first of all this is my first post and I may not have the forum etiquette down pat, and I apologize in advance for anything off.

    I am probably very young to be on this site, as I am 13. I have dug around a little bit, and there is no legal age limit, as long as there is a legal adult in the mix in some places. I wish to get into stocks, like long term stocks and re-investing dividends for a long time. I have around $450 USD. Though I know it is nice to start as early as possible, I do have other ambitions, and it is, again, very early on.

    Do you believe that it is best for me to go in as soon as possible or should I wait until I have an actual income?
     
  2. Mitzter

    Mitzter Member

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    Hya Superman, welcome on board! Very nice to see a youngster like yourself being interested in the stock markets.

    Warren Buffett started with only $100 when he was about your age and look what he turned his investments into. He is now one of the richest people in the world! I would hit the markets with your $450 and invest more when you get the income. But, very important, the $450 should be money that you’re willing to lose and which you don’t need on short notice.
     
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  3. Trahn Thompson

    Trahn Thompson Active Member

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    Welcome superman, Talk with your parents and have them set up a trust. You will need help with the tax side of investing and trust are an easy way to do this. Congrats on starting young, the greatest way of growing wealth is long term.
     
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  4. T0rm3nted

    T0rm3nted Moderator
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    @Superman Welcome, and congrats on thinking ahead and planning for your future. Here's my advice:

    1. Talk with your parents first. You may need them to help you sign up for an account, co-sign something, or just give advice. If they see you planning for your future, maybe they even chip in a little extra because you're being responsible!

    2. Set your goals. You're young, so it's going to be hard to know what is realistic. Your parents should be able to help, but we can help here as well at least letting you know if some of your goals are achievable, and the best way of reaching those goals. Setting goals is the most important. If you're planning on getting wealthy and buying a yacht, those aren't exactly achievable. Obviously people get lucky or get hand-me-downs from wealthy parents and that happens, but for most, it's not an achievable goal. If you're goal is to make 10% a year and retire when you turn 50 with a 401K of $2M and a savings account of $2M, that's within the realm of possibility, and starting at your age is a great start.

    3. Research. Read around on this site, look around elsewhere. When setting your goals, that will give you an idea about a lot of things. Risk tolerance, how much money you're trying to make, etc. Then you'll have a better idea what to spend most time researching. Are you trying to make a career out of this day trading/swing trading? Are you just looking to pick some investments and hold them for years? Do you enjoy the technical side about reading charts? Do you like learning about a companies financials for long-term holding? A lot of that will be determined when you set your goals.

    4. Paper Trade first. A lot of people say it's pointless, but I disagree. It's very useful if you treat it like it's real money. If you only have $450, when paper trading, only use $450. Don't use the whole $100K that most paper trading sites give you to start. It will teach you about commissions, it will teach you about how much you can expect to gain/lose on a trade of that size, it will teach you about different types of trades (stop orders, limit orders, market orders, etc.). Then when you go to use a real brokerage, you'll know how to execute a trade, you won't be hit by unexpected commissions, you won't make $90 and think "Man that's horrible" when it's actually a 20% gain which is hugely successful.

    After all that is done, I'd say you'll know what to do at that point. Do all those and you'll have a much better idea what you want to do, and how you want to do it. Good luck, and make sure you post questions around here whenever you have them! Pretty much everyone here is happy to help, even if you think it's a dumb question. There are no dumb questions, and other people lurking on the forum are thinking the same things, so you'll be asking for many, not just yourself!

    I made this spreadsheet for you as a little encouragement. Let me know if you have any questions.

    upload_2019-7-23_7-48-28.png
     
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  5. Gray Wolf

    Gray Wolf Well-Known Member

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    I know some will say fees get in the way of small accounts but... I would suggest you look in to a brokerage like TD Ameritrade and think of setting up a custodial account there. They have hundreds of commission free ETF's that have decent enough yields to start small. Then you can use their Think or Swim platform for paper trading which allows you to test strategies and develop trading rules. On their education portion they have many good online courses that will help you learn the methods etc.
     
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  6. Bodacious

    Bodacious Active Member

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    Welcome to the forum young man.

    This........

    4. Paper Trade first.
    A lot of people say it's pointless, but I disagree. It's very useful if you treat it like it's real money. If you only have $450, when paper trading, only use $450. Don't use the whole $100K that most paper trading sites give you to start. It will teach you about commissions, it will teach you about how much you can expect to gain/lose on a trade of that size, it will teach you about different types of trades (stop orders, limit orders, market orders, etc.). Then when you go to use a real brokerage, you'll know how to execute a trade, you won't be hit by unexpected commissions, you won't make $90 and think "Man that's horrible" when it's actually a 20% gain which is hugely successful.
     
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  7. hitman

    hitman Well-Known Member

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    I like seeing young kids starting this early my youngest daughter started at the say age with my help and she is now even pointing out companies to me that her age group is supporting so we debate the companies before taking positions in them. Do you have any family member that benefit from the market if you do use them for guidance they will have your best interest at heart. This is a good site to get ideas because the vets that are on will call bs(p&d) when the see it. Best Wishes.
     
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  8. Superman

    Superman New Member

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    Thanks! Will definitely be using the chart for future reference.
     

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