Best way to invest money as a 22 year old?
What is the goal of the money?  If it is to use in the short term, like savings for a car or college, then stick it in the bank and use it for that purpose. If you really want this money to mean something, then in my opinion you have only one choice:  Open a ROTH IRA with something like Vanguard or Fidelity and invest in an index fund.  Then do something that will be very difficult:  Don't touch it. By the time you are 65, it will grow to about 60,000.  However, assuming a 20% tax bracket, the value of that money is really more like 75,000.   Clearly this will not make or break you either way.  The way you live the rest of your life will have far more of an impact.  It will get you started on the right path. BTW this is advice I gave my son who is about your age, and does not earn a ton of money as a state trooper.  Half of his overtime pay goes into a ROTH.  If he lives the rest of his life like he does now, he will be a wealthy man despite making an average income.  No debt, and investing a decent portion of his pay. Most important: Any gains you make from risking this sum of money over the next few years will not be life changing, but if you can't afford to lose it, then losses can be. Rhetorical question: How can you trust what I say you should do with your money? Answer: You can't. I'm happy to hear you're reading about the stock market, so please allow me to encourage you to keep learning.  And broaden your target to investing, or even further, to financial planning.  You may decide to pay down debt first.  You may decide to hold cash since you need it within a couple years. Least important: I suggest a Roth IRA at any online discount brokerage whose fees to open an account plus 1 transaction fee are the lowest to get you into a broad-market index ETF or mutual fund. Hopefully this $1000 is just a start, and not the last investment you will ever make. Assuming that, there are a couple of big questions to consider: One: What are you saving for? Are you thinking that this is for retirement 40 or 50 years from now, or something much sooner, like buying a car or a house? You didn't say where you live. In the U.S., if you put money into an IRA or a 401k or some other account that the government classes as a retirement account, you don't pay taxes on the profits from the investment, only on the original principal. If you leave the money invested for a long period of time, the profits can be many times the original investment, so this makes a huge difference.  Like suppose that you pay 15% of your income in state and local taxes.  And suppose you invest your $1000 in something that gives a 7% annual return and leave it there for 40 years. (Of course I'm just making up numbers for an example, but I think these are in a plausible range. And I'm ignoring the difference between regular income tax and capital gains tax, etc etc. It doesn't change the point.) If you put the money in a classic IRA, you pay 0% taxes the year you open the account, so you have your full $1000, figure that compound interest for 40 years, you'll end up with -- crunch crunch crunch the numbers -- $14,974. Then you pay 15% when you take it leaving you with $12,728. (The end result with a Roth IRA is exactly the same. Feel free to crunch those numbers.) But now suppose you invest in a no-retirement account so you have to pay taxes every year. Your original investment is only $850 because you have to pay tax on that, and your effective return is only 5.95% because you have to pay 15% of the 7%. So after 40 years you have -- crunch crunch -- $10,093. Quite a difference. But if you put money in a retirement account and then take it out before you retire, you pay substantial penalties. I think it's 20%. If you plan to take the money out after a year or two,  that would really hurt. Two: How much risk are you willing to take? The reality of investment is that, almost always, the more risk you take, the bigger the potential returns, and vice versa. Investments that are very safe tend to have very low returns. As you're young, if you're saving for retirement, you can probably afford a fairly high amount of risk. If you lose a lot of money this year, odds are you'll get it back over the next few years, or at least be able to put more money into investments to make up for it. If you're 64 and planning to retire next year, you want to take very low-risk investments. In general, investing in government bonds is very safe but has very low returns. Corporate bonds are less safe but offer higher returns. Stocks are a little more. Of course different companies have different levels of risk: new start-ups tend to be very risky, but can give huge returns. Commodities are much higher risk. Buying on margin or selling short are ways to really leverage your money, but you could end up losing more than you invested. Mutual funds are a relatively safe way to invest in stocks and bonds because they spread your risk over many companies. Three: How much effort are you willing to put into managing your investments? How much do you know about the stock market and the commodities market and international finance and so on, and how much are you willing to learn? If your answer is that you know a lot about these things or are willing to dive in and learn a lot, that you can invest in individual stocks, bonds, commodities, etc. If your answer is that you really don't know much about all this, then it makes a lot of sense to just put your money into a mutual fund and let the people who manage the fund do all the work. The classic answer is simple. Aim to build up a a financial cushion that is the equivalent of 3 times your monthly salary. This should be readily accessible and in cash, to cover any unforeseen expenses that you may incur (car needs repairing, washing machine breaks down etc). Once you have this in place its then time to think about longer term investments. Monthly 'drip feeding' into a mutual stock based investment fund is a good place to start. Pick a simple Index based or fund with a global investment bias and put in a set amount that you can regularly commit to each month. You can get way more complicated but for sheer simplicity and longer term returns, this is a simple way to build up some financial security and longer term investments. "First off, monozok is right, at the end of the day, you should not accept what anyone says to do without your money - take their suggestions as directions to research and decide for yourself.  I also do not think what you have is too little to invest, but that depends on how liquid you need to be.  Often in order to make a small amount of money grow via investments, you have to be willing to take all the investment profits from that principle and reinvest it.  Thus, can you see how your investment ability is governed by the time you plan to spend without that money?  They mantra that I have heard from many people is that the longer you are able to wait, the more 'risk' you can take.  As someone who is about the same age as you (I'm 24) I can't exactly say yet that what I have done is sure fire for the long term, but I suggest you adopt a few principles: 1) Go read ""A Random Walk Down Wall Street"" by Burton G. Malkiel.  A key point for you might be that you can do better than most of these professional investors for hire simply by putting  more money in a well selected index fund.  For example, Vanguard is a nice online service to buy indexes through, but they may require a minimum.  2) Since you are young, if you go into any firm, bank, or ""financial planner,"" they will just think you are naive and try to get you to buy whatever is best for them (one of their mutual funds, money market accounts, annuities, some flashy cd).   Don't.  You can do better on your own and while it might be tempting because these options look more secure or well managed, most of the time you will barely make above inflation, and you will not have learned very much. 3) One exciting thin you should start learning now is about algorithmic trading because it is cool and super efficient. quantopian.com is a good platform for this.  It is a fun community and it is also free. 4) One of the best ways I have found to watch the stock market is actually through a stock game app on my phone that has realtime stock price feed.  Seeking Alpha has a good mobile app interface and it also connects you to news that has to do with the companies you are interested in."
"If you're willing to do a little more work and bookkeeping than just putting money into the 401(k) I would recommend the following. I note that you said you chose some funds based on performance since the expense ratios are all high. I would recommend against chasing performance because active funds will almost always falter; honor the old saw:  ""past performance is no guarantee of future returns"". Assuming the cash in your Ally account is an emergency fund, I would use it to pay off your credit card debt to avoid the interest payments. Use free cash flow in the coming months to bring the emergency fund balance back up to an acceptable level. If the Ally account is not an emergency fund, I would make it one! With no debt and an emergency fund for 3-12 months of living expenses (pick your risk tolerance), then you can concentrate on investing. Your 401(k) options are unfortunately pretty poor. With those choices I would invest this way: Once you fill up your choice of IRA, then you have the tougher decision of where to put any extra money you have to invest (if any). A brokerage account gives you the freedom of investment choices and the ability to easily pull out money in the case of a dire emergency. The 401(k) will give you tax benefits, but high fund expenses. The tax benefits are considerable, so if I were at a job where I plan on moving on in a few years, I'd fund the 401(k) up to the max with the knowledge that I'd roll the 401(k) into a rollover IRA in the (relatively) short term. If I saw myself staying at the employer for a long time (5+ years), I'd probably take the taxable account route since those high fund fees will add up over time. One you start building up a solid base, then I might look into having a small allocation in one of my accounts for ""play money"" to pick individual stocks, or start making sector bets." Definitely see your point. One of my customers started as an owner/operator of a frozen yogurt shop that became popular, and now he has three. He says he works less hours now but his stress level is *higher* because he employs young people. (He actually has a low turnover because he pays well). Still, some people graduate high school not knowing you have to wash your hands after handling money, and chocolate toppings on the floor need to be cleaned up before bugs are attracted. He said he spends a ton of time explaining things that 18-22 year olds should already know. He told me if he had it to do over he would have just kept the one store and ran it himself. The point im making is that some people would prefer to keep it simple.  The only reason im expanding is I think there is room to bring in my good friend as a partner.  Ill end up making less money for a while and maybe equalizing in the long run but the business will be able to stay open five days a week even if one of us is gone. Ill be trading income for time without disrupting my customers. "Its funny how we call them teens, teenagers etc.   I fucking hated being called that when I was one.  Go to Barnes and noble and there is a ""teen fiction"" section.  Must be for 12 years olds or something, so they feel older.  The only appropriate time to call a person a teen is in porn, and those bitches are all 22." At 22 years old, you can afford to be invested 100% in the stock market. Like many others, I recommend that you consider low cost index funds if those are available in your 401(k) plan. Since your 401(k) contributions are usually made with each paycheck this gives you the added benefit of dollar cost averaging throughout your career.  There used to be a common rule that you should put 100 minus your age as the percentage invested in the stock market and the rest in bonds, but with interest rates being so low, bonds have underperformed, so many experts now recommend 110 or even 120 minus your age for stocks percentage. My recommendation is that you wait until you are 40 and then move 25% into bonds, then increase it to 40% at 55 years old. At 65 I would jump to a 50-50 stock/bonds mix and when you start taking distributions I would move to a stable-value income portfolio. I also recommend that you roll your funds into a Vanguard IRA when you change jobs so that you take advantage of their low management fee index mutual funds (that have no fees for trading).  You can pick whatever mix feels best for you, but at your age I would suggest a 50-50 mix between the S&P 500 (large cap) and the Russell 2000 (small cap). Those with quarterly rebalancing will put you a little ahead of the market with very little effort. First of all, make sure you have all your credit cards paid in full -the compounding interests on those can zero out returns on any of your private investments. Fundamentally, there are 2 major parts of personal finance: optimizing the savings output (see frugal blogs for getting costs down, and entrepreneur sites for upping revenues), and matching investment vehicles to your particular taste of risk/reward. For the later, Fool's 13 steps to invest provides a sound foundation, by explaining the basics of stocks, indexes, long-holding strategy, etc.   A full list Financial instruments can be found on Wikipedia; however, you will find most of these to be irrelevant to your goals listed above. For a more detailed guide to long-term strategies on portfolio composition, I'd recommend A Random Walk Down Wall Street: The Time-tested Strategy for Successful Investing. One of the most handy charts can be found in the second half of this book, which basically outlines for a given age a recommended asset allocation for wealth creation. Good luck! If you have little investing experience, you shouldn't involve yourself in leveraged investments or short-term speculation at all.  You will probably just lose money. If not, is there a better way to invest with a small amount of money? If you have little investing experience, you should not attempt to make a lot of money on a small investment at all.  You will probably just lose money. The best way to invest with a small amount of money is to put it in a low-cost, mainstream investment product (like an index fund), and wait and save money until you have more.  By that time, you may decide that leaving the money in a low-cost index fund is actually the best thing to do anyway.  (Incidentally, I don't know if fund minimums are different in the UK, but in the US, an amount equivalent to £100 might not even be enough to start, so you might have to just put it in a savings account until you save enough to even buy into a mutual fund.) Fantastic question to be asking at the age of 22! A very wise man suggested to me the following with regard to your net income I've purposely not included saving a sum of money for a house deposit, as this is very much cultural and lots of EU countries have a low rate of home ownership. On the education versus entrepreneur question. I don't think these are mutually exclusive. I am a big advocate of education (I have a B.Eng) but have following working in the real world for a number of years have started an IT business in data analytics. My business partner and I saw a gap in the market and have exploited it. I continue to educate myself now in short courses on running business, data analytics and investment. My business partner did things the otherway around, starting the company first, then getting an M.Sc. Other posters have suggested that investing your money personally is a bad idea. I think it is a very good idea to take control of your own destiny and choose how you will invest your money.   I would say similarly that giving your money to someone else who will sometimes lose you money and will charge you for the privilege is a bad idea. Also putting your money in a box under your bed or in the bank and receive interest that is less than inflation are bad ideas. You need to choose where to invest your money otherwise you will gain no advantage from the savings and inflation will erode your buying power. I would suggest that you educate yourself in the investment options that are available to you and those that suit you personality and life circumstances. Here are some notes on learning about stock market trading/investing if you choose to take that direction along with some books for self learning. If you have no immediate need for the money you can apply the Rule of 72 to that money.  Ask your parent's financial advisor to invest the money.  Based on the rate of return your money will double like clockwork. At 8% interest your money will double every 9 years.  45 years from now that initial investment will have doubled 5 times.  That adds up pretty fast.  Time is your best friend when investing at your age. Odds are you'll want to be saving for a college education though.  Graduating debt free is by far the best plan.