REDL|NE

Hello everyone,

Im almost 20, and getting that investing urge

Right now, my situation is:

-Full time student
- Part time work (make about 600/month before taxes)
- Still live at home
- Have about 2,000 in the bank.

I dont really have too many expenses, however i do make a 150 dollar loan payment every month for my car. I pay what i can for my tuition, however the folks have been very generous, and i usually just pay for my books.

My investments right now are a 100 dollar/month contribute to a RRSP (Registered retirement savings plan for your non-canadians) , but im looking to get into more.

I know the basics about stocks, bonds, mutual funds etc, but thats limited at best. Im looking to purchase some stocks that are relatively low risk, but moreso moderate.

I guess what im asking is for some advice on investing, im new at this and dont want to throw away any money by making a stupid mistake. A friend has told me that www.stockhouse.com is a good place to get information on companies.

If any one is familiar with Royal Bank, i use Action Direct for all my trades - buy and sell.

Thanks for any advice

__________________
"You learn more and more about less and less, until you
know everything about nothing."

braisler

Pay off your car. You are losing money there without a doubt. That should be your first priority. Once that is paid off, you should have a little more to work with for investing each month.

I got started with investing years ago by reading some books. Check your library for Motley Fool's Investing Guide and maybe a book or two by George Soros, Peter Lynch, etc. Don't swallow everything they say hook, line, and sinker, but rather use their ideas as a springboard for your own investing ideas.

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You do not really understand something unless you can explain it to your grandmother.
- Albert Einstein
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REDL|NE

Cars almost paid off, ive got probabaly another 6 months or so. Thanks for the tips though, i should go get a book.

__________________
"You learn more and more about less and less, until you
know everything about nothing."

Charlatan

I take it you are young... in your 20s? Don't worry too much about investing. The RRSP is a good thing to be sure but braisler says it best... pay down your car faster.

Put the money you have in lower risk venutres... it won't be too long before you are into the following:

marriage
house buying
kids

These three things require lots of money. If you can sock some away now you will be ahead of the game. A GIC might be more conservative BUT your principle will always be there when you need it.

__________________
"My hands are on fire. Hands are on fire. Ain't got no more time for all you charlatans and liars."
- Old Man Luedecke

Warf Rat

I could not agree more with Charlatan about future stituation, but I disagree with the low risk approach.
This is the time in your life when your expenses are as low as they will ever be.
Take it from me, when the house and family and all that is required to just to keep up, savings will not be you first priority.
You are young and the earlier you start the better off you'll be.
Pay offthe car, but you should still be socking away everything you can now. When it comes to risk, just try to find any 10,20,or 30 year period of time when the markets as a whole are down more than inflation, it's not likely to be found.
Remember this investing can pay college expenses for children (at least 20 years off) or an early retirement ( at least 30 years off).
When starting, find low cost mual funds, until you have saved enough to invest in stocks. That way you own several hundred stocks at once without having the money to do it yourself. When your investments grow to a sizable amount then you can look at stocks.
Be careful and don't react to trends. Also have an exit strategy for all your investments. Meaning if something does well for you short term that does not mean they can keep it up, grab gains when you can and find new places to put those gains, that way you continue to spread out your risk.

Good luck.

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A day late, and a dollar short.

777

Hey Red, if you decide to invest in stock, try choosing a company that will pay dividends on what you have bought.

It's like if you paid me $10 now, and I paid you $1 a month for as long as you let me hold your $10. That way, your money will be working for you and you'll have income from it as well.

If you'd like, you can check out Robert T. Kiyosaki's book "Rich Dad, Poor Dad", or anything in the Rich Dad series.

I don't know what the tax laws are like in Canada (like income tax), but your best option though, is to find a tax exempt investment. Like a Roth/IRA or a Variable Universal Life insurance policy.

__________________
"I don't know that I ever wanted greatness, on its own. It seems rather like wanting to be an engineer, rather than wanting to design something - or wanting to be a writer, rather than wanting to write. It should be a by-product, not a thing in itself. Otherwise, it's just an ego trip."

Roger Zelazny

turnbot

Some good advice so far.

I would suggest 3 things:
1) Set up a budget. Even though you don't make very much, getting into the habit of tracking exactly how much and where you spend your money is critical to good personal finances.

2) Invest a certain $ amount every month. Make it a priority. Go by your budget, which will tell you what you can afford to invest. Doing this monthly will allow you to take advantage of dollar-cost averaging. This strategy allows you to buy more of a certain security when the price is down, but less when the price is up. Still, the overall value is up since the shares purchased at the lower cost are worth more.

3) Invest with certain time horizons in mind. What I mean is, set up some investments for 3-5 years away. This could help you buy a home after college. Set up another investment for 10-20 years away. This will help pay for children's schooling. Finally, invest for retirement. Chances are you'll have a good 20-30 years of life after retirement. Chances are those years won't come cheaply. The more you save now, the better off you'll be then.

Some of the suggestions in 3 might require more professional advice. Finding a good financial advisor could benefit you.