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How can I get rich?

how do i start investing with little money?
Should i have a retirement account right after highschool?

finance financial-planning investing savings retirement-planning
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Michael’s Answer

Getting rich takes time and strategy. Here are a few steps you can take:

Start Investing with Little Money: Look into micro-investing apps like Acorns or Robinhood. They let you start with small amounts and grow your investments over time.

Retirement Account: Yes, opening a retirement account right after high school is a smart move. Accounts like Roth IRA can be started with little money and benefit from long-term growth.

Learn and Budget: Educate yourself on personal finance. Websites like Nerdwallet and Investopedia are great resources. Also, create a budget to manage your expenses and savings effectively.

Good luck on your journey!
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James Constantine’s Answer

Hello Yenny!

Kickstart Your Investment Journey with Minimal Funds:

Embarking on your investment journey with limited funds can be as simple as following these steps:

Establish Concrete Financial Objectives: Before diving into the investment pool, it's crucial to define your financial objectives. Identify your reasons for investing and the goals you hope to accomplish through your investments.

Self-Education is Key: Allocate some time to learn about the various investment alternatives, their associated risks, and potential returns. A basic understanding of investing will guide you in making informed choices.

Begin with Small Steps: A hefty sum isn't a prerequisite for investing. Numerous online platforms enable you to invest with just $5 or $10. A low-cost index fund or exchange-traded fund (ETF) that offers diversification could be a good starting point.

Take Advantage of Micro-Investment Apps: Several micro-investment apps allow you to invest small sums regularly. These apps typically round up your daily purchases and invest the leftover change on your behalf.

Explore Robo-Advisors: Robo-advisors are automated investment platforms that construct and manage a diversified portfolio for you, based on your risk tolerance and financial objectives. They are cost-effective and require a minimal initial investment.

Adopt a Long-Term Investing Mindset: Investing is a marathon, not a sprint. Stay dedicated to your investment strategy and resist making hasty decisions influenced by short-term market swings.

Diversify Your Investment Portfolio: Diversification is the cornerstone of risk management in your investment portfolio. Distribute your investments across various asset classes like stocks, bonds, real estate, and commodities.

Keep an Eye on Your Investments: Regularly assess your investments to ensure they align with your financial objectives and risk tolerance. If necessary, rebalance your portfolio to maintain diversification.

Is a Retirement Account Necessary Right After High School?

While it's uncommon for individuals fresh out of high school to open a retirement account, starting early can yield significant benefits due to the magic of compound interest. Here are some factors to consider:

Roth IRA: If you have an income, opening a Roth IRA can be a strategic move, even at a young age. Contributions to a Roth IRA are made with post-tax dollars, facilitating tax-free growth and withdrawals during retirement.

Employer-Sponsored Plans: If you join the workforce immediately after high school and your employer provides a retirement plan such as a 401(k), consider enrolling, especially if an employer match is available.

Long-Term View: By starting to save for retirement early, you allow your investments more time to grow, potentially leading to a larger retirement fund.

Financial Stability: Before focusing on retirement savings, ensure that you have a solid emergency fund and are effectively managing any high-interest debt.

In conclusion, while it's not obligatory to have a retirement account right after high school, starting early can set you on the road to long-term financial stability.

Top 3 Credible Sources Used:

Investopedia
The Balance
NerdWallet

These sources were referenced for their exhaustive guides on beginner-friendly investment strategies, retirement planning tips for young adults, and insights into accumulating wealth over time through wise financial choices.

May You Be Blessed Abundantly,
JC.
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Isabel’s Answer

Hello Yenny!

Embarking on the journey to accumulate wealth is all about earning, saving, and investing smartly. You can kick-start your investment journey, even with a modest budget, by utilizing apps like Robinhood or Acorns. These platforms enable you to purchase fractional shares, allowing you to start small and grow steadily. Spreading your investments across different areas is a great way to mitigate risk.

Consider opening a retirement account such as a Roth IRA as soon as you finish high school. This will allow you to reap the benefits of compound interest over the years. Remember, consistent contributions, no matter how small, can make a significant difference over time.

Focusing on financial education, crafting a sensible budget, and steering clear of high-interest debt are key to laying a robust financial foundation for your future.

Hopes this helps!
-Isabel
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Tim’s Answer

To start investing, open a small brokerage account and invest in companies that you think have a good long term investment. Try to diversify, meaning don't just buy one stock, or invest in one sector. Rather, invest across a few different companies in different industries that are in different parts of their business cycle (start-up technology all the way through safer, mature companies). This will help you hold a diversified portfolio that over time, should offer a good way to invest and build wealth over time. The best way I've found to learn how to be a successful investor is to be invested in markets as it is almost guaranteed to keep you interested.
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calvin’s Answer

Educate Yourself: Learn the basics of investing through books, online courses, or financial blogs. Understanding the fundamentals will help you make informed decisions.

Set Financial Goals: Determine what you want to achieve with your investments. Are you saving for retirement, a major purchase, or just looking to grow your wealth?

Start with a Budget: Allocate a portion of your income for investments. Even a small amount like $25 or $50 per month can grow over time.

Use Micro-Investing Apps: Platforms like Acorns, Robinhood, or Stash allow you to start investing with very little money. They often have low or no minimum investment requirements.

Open a Brokerage Account: Many online brokers, such as Fidelity, Charles Schwab, and E*TRADE, offer no-minimum accounts and commission-free trades. This can help you start investing without needing a large sum of money upfront.

Invest in Exchange-Traded Funds (ETFs) or Mutual Funds: These funds pool money from many investors to buy a diversified portfolio of stocks, bonds, or other securities. They are a good way to diversify your investments with minimal capital.

Take Advantage of Employer-Sponsored Retirement Plans: If you have a job that offers a 401(k) or similar plan, contribute to it, especially if your employer matches contributions. This is essentially free money for your retirement.

Consider Robo-Advisors: Services like Betterment and Wealthfront provide automated, low-cost investment management. They create a diversified portfolio based on your risk tolerance and investment goals.

Dividend Reinvestment Plans (DRIPs): These plans allow you to reinvest your dividends to purchase more shares of stock, which can compound your investments over time.

Be Consistent and Patient: Regular contributions, no matter how small, and a long-term perspective are key to building wealth through investing.
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Alexander’s Answer

Hey Yenny,

There are many online brokerage firms that provide access to the stock and bond market, with very little starting capital. However, it's important that you establish, at least, a foundational understanding of how those markets and the platform work before you begin investing. Also, I would recommend finding a platform that allows you to practice with 'fake money' first. This is extremely helpful as it allows you to feel-out the market and trading platform before you start investing actual capital.

As it relates to retirement accounts: Typically, the earlier you start a retirement account the better. Firstly, it helps to establish discipline with your personal finances, and the earlier you start, the more years your money will have to compound (i.e., do to investment returns/interest). That said, it's important to determine:

i) a sustainable amount of money that you should contribute each paycheck/month/year (i.e., you wouldn't want to contribute 100% of each paycheck).

ii) what type of retirement accounts are best suited for your situation (i.e., Roth IRA, Traditional IRA, etc.)

There are a ton of helpful resources on the internet, such as Investopedia.com and Youtube.com that will help you in thinking-through some of these considerations.

Best of luck to you!
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Zach’s Answer

I am going to disagree with a few of the answers here. I would avoid things like Robinhood or Acorn and when you are fresh out of high school put some of your graduation money or some money you have saved from jobs you have worked into a Roth IRA. This is one of the best investment vehicles you can start early to plan for your retirement and to accumulate wealth over the course of your career. Later on, once you have a salary or consistent income and some money to "play around" with, then you can begin to invest in a traditional brokerage account and maybe diversify into some riskier investments. Another thing to think about is a stable career path. Finding a balance between what you are passionate about and a stable career with upward mobility is key. I have known many people who have chosen careers for the money and burned out fairly quickly and I have also known people who strictly followed their passion but ended up being miserable because they loved their job but couldn't afford to do the fun things they wanted and weren't accumulating any wealth. There are lots of factors to consider when building wealth but the best things to focus on are:
1. Staying out of debt when possible (buying a car or a house are exceptions), never take on any consumer debt to buy something that you don't absolutely need to live.
2. Picking a stable career with good upward mobility.
3. Budgeting your money to save and invest.
Watch Dave Ramsey, he is a self made millionaire who gives great advice on how to build wealth.
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Rebecca’s Answer

Thank you for your question. How do you define rich? Different people have different definitions! This is a question on financial management.
Firstly, you need to distinguish
-what you want - it is something nice to have, eg jewellery, trendy sneakers
- what you need - it is something essential to you, eg school fees, transport, etc
You need to divide your income into 3 portions:
1. Expenses on what you need
2. Save the money for investment - seek guidance from your mentor, your parents, etc.
3. Expenses on something what you want
Hope this helps! Good Luck!
May Almighty God bless you!
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