What is a good investment vehicle for introducing kids to investing?
"I'd also look into index funds (eg Vanguard) as they have low management fees. you can buy these as ETFs as well - so you can buy in at a very low starting amount. An index fund can also be a talking point for your kids about what an industry index is and how it relates to the companies that fall into it. Also about how mutual funds try to ""beat the market"" - and often fail." Buy them a physical stock certificate... you can request them from a broker, or buy through a company like http://www.oneshare.com. Other options: "There are mutual funds oriented toward kids or that are suitable in some way (e.g. they have low minimums). Here are two articles with mention of some of them: Of those only USAA First Start Growth is explicitly for kids: http://quote.morningstar.com/fund/f.aspx?t=UFSGX or https://www.usaa.com/inet/pages/mutual_funds_reports Another fund aimed at kids is Monetta Young Investor http://quote.morningstar.com/fund/f.aspx?t=MYIFX or http://www.younginvestorfund.com/ The diversified funds (with fixed income) like USAA First Start Growth, Vanguard STAR, Pax World Balanced, etc. have the nice property that they won't be as volatile and may spend less time ""underwater,"" so that might better convey the value of investing (vs. an all-stock fund where it could be kind of depressing for years on end, if you get bad luck). Though, I feel the same principle applies for adults. Kids may appreciate intangible aspects of the funds, e.g. Pax World Balanced invests in sustainable companies, Ariel Appreciation also has some social parameters and I think the guy running it does charity work with kids, that type of thing. There should be quarterly and annual reports on mutual funds (or stocks) that would give kids something to read and think about related to the investment. Disclaimer: none of these funds are recommendations, I have not researched them in any detail, just giving you some leads." "For ""real"" investing I would usually recommend mutual funds.  But if you are trying to teach a kid about investing, I would recommend they choose individual stocks.   That will give them a great opportunity to follow the companies they bought in the news.  It also gives you an opportunity to sit down with them periodically and discuss their companies performance, economic news, etc. and how those things play into stock prices."
"There's not nearly enough information here for anyone to give you good advice. Additionally, /r/personalfinance will probably be a bit more relevant and helpful for what you're asking.   Aside from that, if you don't know what you're doing, stay out of currency trading and mutual funds. If you don't care about losing your money, go right ahead and play in some markets, but remember there are people paid millions of dollars/year who don't make consistent profit.   What are the chances a novice with no training will perform well?  My $.02, pay your debt, make a general theory about the economy a year from now (e.g. ""Things will be worse in Europe than they are now"") and then invest your money in an index fund that matches that goal (e.g. Some sort of Europe-Short investment vehicle). Reassess a year from now and don't stress about it." Diversification is a risk-mitigation strategy. When you invest in equities, you generally get a higher rate of return than a fixed income investment. But you have risks... a single company's market value can decline for all sorts of reasons, including factors outside of the control of management. Diversification lets you spread risk and concentrate on sectors that you feel offer the best value. Investing outside of your currency zone allows you to diversify more, but also introduces currency risks, which require a whole other level of understanding. Today, investing in emerging markets is very popular for US investors because these economies are booming and US monetary policy has been weakening the dollar for some time. A major bank failure in China or a flip to a strong dollar policy could literally implode those investments overnight. At the end of the day, invest in what you understand. Know the factors that can lower your investment value. "This Stack Exchange site is a nice place to find answers and ask questions. Good start! Moving away from the recursive answer... Simply distilling personal finance down to ""I have money, I'll need money in the future, what do I do"", an easily digestible book with how-to, multi-step guidelines is ""I Will Teach You To Be Rich"". The author talks about setting up the accounts you should have, making sure all your bills are paid automatically, saving on the big things and tips to increase your take home pay. That link goes to a compilation page on the blog with many of the most fundamental articles. However, ""The World’s Easiest Guide To Understanding Retirement Accounts"" is a particularly key article. While all the information is on the free blog, the book is well organized and concise.  The Simple Dollar is a nice blog with frugal living tips, lifestyle assessments, financial thoughts and reader questions. The author also reviews about a book a week. Investing - hoping to get better returns than savings can provide while minimizing risk. This thread is an excellent list of books to learn about investing. I highly recommend ""The Bogleheads' Guide to Investing"" and ""The Only Investment Guide You'll Ever Need"". The world of investment vehicles is huge but it doesn't have to be complicated once you ignore all the fads and risky stuff. Index mutual funds are the place to start (and maybe end). Asset allocation and diversification are themes to guide you. The books on that list will teach you." "In this environment, I don't think that it is advisable to buy a broad emerging market fund.  Why? ""Emerging market"" is too broad... Look at the top 10 holdings of the fund... You're exposed to Russia & Brazil (oil driven), Chinese and Latin American banks and Asian electronics manufacturing. Those are sectors that don't correlate, in economies that are unstable -- a recipie for trouble unless you think that the global economy is heading way up. I would recommend focusing on the sectors that you are interested in (ie oil, electronics, etc) via a low cost vehicle like an index ETF or invest using a actively managed emerging markets fund with a strategy that you understand.  Don't invest a dime unless you understand what you are getting into. An index fund is just sorting companies by market cap. But... What does market cap mean when you are buying a Chinese bank?" Keep it simple: mutual funds (preferably index, low fee or ETF linked funds) do make a nice start for your little princess college fund.  You dont need a real fortune to offset the trading cost of an online broker but if your really going to take advantage of dollar cost averaging, you might want to invest into a trusted fund company.  Do your research, it is worth it. Ignore what the investment salesman is saying, he works for his wealth, not yours.  A good DIY strategy, either joint with your own retirement account agregate or on a low cost index fund will make wonders.  Keep in mind to be resilient: you will cash out when the princess will be in college in 20 yerars. Make sure to make proper time horizon investment and allocation.  Cheers, All the best. Feel free to edit "You are your own worst enemy when it comes to investing. You might think that you can handle a lot of risk but when the market plummets you don't know exactly how you'll react. Many people panic and sell at the worst possible time, and that kills their returns. Will that be you? It's impossible to tell until it happens. Don't just invest in stocks. Put some of your money in bonds. For example TIPS, which are inflation adjusted treasury bonds (very safe, and the return is tied to the rate of inflation).  That way, when the stock market falls, you'll have a back-stop and you'll be less likely to sell at the wrong time. A 50/50 stock/bond mix is probably reasonable. Some recommend your age in bonds, which for you means 20% or so. Personally I think 50/50 is better even at your young age. Invest in broad market indexes, such as the S&P 500. Steer clear of individual stocks except for maybe 5-10% of your total. Individual stocks carry the risk of going out of business, such as Enron. Follow Warren Buffet's two rules of investing:  a) Don't lose money b) See rule a). Ignore the ""investment porn"" that is all around you in the form of TV shows and ads. Don't chase hot companies, sectors or countries.  Try to estimate what you'll need for retirement (if that's what your investing for) and don't take more risk than you need to. Try to maintain a very simple portfolio that you'll be able to sleep well with. For example, check into the coffeehouse investor  Pay a visit to the Bogleheads Forum - you can ask for advice there and the advice will be excellent. Avoid investments with high fees. Get advice from a good fee-only investment advisor if needed. Don't forget to enjoy some of your money now as well. You might not make it to retirement. Read, read, read about investing and retirement. There are many excellent books out there, many of which you can pick up used (cheap) through amazon.com." "Mutual funds can be relatively low risk and a good starting point. Really it depends on you.  What are your goals? This is a pretty open ended question. These can all be low risk and provide some return.  Note ""Less Knowledge"" is never a good qualifier for an investment. Your money is your business and you are entitled to know what your business is up to." It's important to consider your Investor Profile when deciding the right kind of vehicle for your finances. You are a young guy, with a considerable earned income and no dependents (sorry, this was not clear from the question.) This means that you are able to take a lot of risks that people who also have a family to think about, might not. == high risk tolerance You should definitely not put your money in a Wealth Management fund or Mutual Fund or any other 'hands-off' vehicle. These typically have worse returns than the FTSE itself. Their popularity is due to an amazing marketing job and the fact that people in general want to believe there is an easy way to grow their money. Probably the best vehicle for your money is property, so the first thing you should do with the money is hire a competent accountant and solicitor.