College student lacking investment experience: How to begin investing money?
"If you have wage income that is reported on a W2 form, you can contribute the maximum of your wages, what you can afford, or $5500 in a Roth IRA.   One advantage of this is that the nominal amounts you contribute can always be removed without tax consequences, so a Roth IRA can be a deep emergency fund (i.e., if the choice is $2000 in cash as emergency fund or $2000 in cash in a 2015 Roth IRA contribution, choice 2 gives you more flexibility and optimistic upside at the risk of not being able to draw on interest/gains until you retire or claim losses on your tax return).  If you let April 15 2016 pass by without making a Roth IRA contribution, you lose the 2015 limit forever.  If you are presently a student and partially employed, you are most likely in the lowest marginal tax rate you will be in for decades, which utilizes the Roth tax game effectively.   If you're estimating ""a few hundred"", then what you pick as an investment is going to be less important than making the contributions.  That is, you can pick any mutual fund that strikes your fancy and be prepared to gain or lose, call it $50/year (or pick a single stock and be prepared to lose it all).  At some point, you need to understand your emotions around volatility, and the only tuition for this school is taking a loss and having the presence of mind to examine any panic responses you may have.  No reason not to learn this on ""a few hundred"".  While it's not ideal to have losses in a Roth, ""a few hundred"" is not consequential in the long run.   If you're not prepared at this time in your life for the possibility of losing it all (or will need the money within a year or few, as your edit suggests), keep it in cash and try to reduce your expenses to contribute more.  Can you contribute another $100?  You will have more money at the end of the year than investment choice will likely return."
"In my opinion, you should pay off the student loans as soon as possible, before you start saving for the house downpayment. $26k is a big number, but you have a great salary.  (Nice!)  Up until now, you have been a poor college student, accustomed to a relatively low standard of living.  Your $800 per month plan would have you pay off the loan in 3 years, but I would challenge you to pay off this entire student loan in 1 year or less.  A monthly loan payment of $2226 will pay off your loan in 12 months. After that is done, if you take the same amount you had been paying toward your student loans and save it for your condo, in less than two years you'll have a 10% down payment saved ($50k).  The whole thing will take less than three years. There are three reasons why I recommend paying off the loan first before saving for the condo: one is practical and two are philosophical. Practical: You will save money on interest.  Paying off the loan in 1 year vs. 3 years will save you $1343.  You won't find a short-term safe investment that will beat 5% in interest. Philosophical: The loan is something current and concrete that you can focus on.  Your condo is a dream at this point, and there is lots of time to change your mind.  If the $2k+ per month amount is at all a sacrifice for you, then in a few months, you might be tempted to say to yourself, ""This month I really want a vacation, so I'll just skip this month of saving.""  For the loan, however, if you establish a concrete goal of 12 months to pay off the loan, it will hopefully help motivate you to allocate this money and stick to your plan. Philosophical: Getting used to borrowing money, making payments to a bank, and paying interest is not a great way to live.  It is better, in my opinion, to eliminate your debt as fast as possible and start getting accustomed to saving cash for what you want.  Clean up your debt, and resolve not to borrow any more money except for a reasonably-sized mortgage on your home." Your mother has a problem that is typical for a woman with children.  She is trying to help her children have a good life, by sacrificing to get them to a point where they can live comfortably on their own.  Though she has a difficult situation now, much of the problems come from a very few choices by her and her children, and her situation can be fixed. Let me point out a few of the reasons why she has come to this point: My mother is a single mom... she is turning 50 this summer... she has about $60k in school loans from the college I attended... she has payments of $500/month ($10k) to my sisters college... she lives on her own in a 2 bedroom apartment... Mother's current 'income statement', Income Essentials (total $3131, 71%, too high, goal $2200) Lifestyle (total $150, low, she should have $500-900 to live her life) Financial (total $1350, 31%) Some observations and suggestions: Even though the $1625 rents seems high, your mom might enjoy her apartment and consider part of her rent ($300) a lifestyle choice (spending money for time), and the higher rent may make sense.  But the rent is high for her income. Your mom should be spending more on food, and budget $200/month. Your mom should be saving money for investments and retirement.  She should be putting 10% into savings ($440), plus any IRA/401K pretax savings. Your sister should be paying for her own college.  She should take her own student loans, so that her mother can save for retirement.  And since she only has $10K left, an alternative would be that you could loan her the money, and she could repay you when she graduates (you have money, as you loaned your mother $8K). You should be repaying the $500/month on the $60K student loan your mother took to help you get through college.  You have benefited from the education, and the increased opportunity the college education has given you.  Now is the time to accept responsibility and pay your debts.  You could at least agree to split the expense with her, and were you paying even $300/month (leaving $200 for her), that would still fix her budget. Your mom should get a car that is paid for and reduce her transportation expenses, until the $350/month debt is resolved.  She should resolve to spend no more than $300/month for a car, and with $100/month for insurance be under 10% for her vehicle. Since your mother lives in the US (NJ) she could avoid the $350/month debt payment though BK.  But since there are other solutions she could exercise to resolve her problems, this is probably not needed. You mom could consider sharing her apartment to share expenses.  Paying $1625 for an apartment for one person seems extravagant.  She might enjoy sharing her apartment with a room-mate. That is about it.  Once her children take responsibility for their lives, your mom will have a manageable budget, and less stress in her life. Mother's revised 'income statement', Income Essentials (total $2721, 62%, high, need to reduce by $500) Lifestyle (total $450, 10%, low) Financial (total $990, 23%) While you and your sister have these changes, Summary of changes: Some rent is lifestyle, reduced car loan by $200, sister pays her college $500, you pay your college $300, mom saves 10% of her income.  Once your sister graduates and starts to repay you for your help with her college, you can take over paying the remainder of your loans, saving your mom an additional $200/month. Investing money in the stock market with [Compound Stock Earnings](http://www.compoundstockearnings.com) is a great way to build wealth and plan for the future. However, few people know what the stock market is let alone how to begin investing in it. It is important to understand how companies and stocks work before investing in them. Definitely not.  You are too young.  Let me explain: Your money will be locked up for at least 40 years, and you will have to navigate some really quirky and trap-laden rules in order to get money for simple things.  Let's say you want to buy a house.  You won't be able to leverage the 401K for that.  College Tuition?  Limits. Your money is locked in and you may get some match, but that assumes your smartest decision at your age is to save money for retirement.  At your age, you should be investing in your career, and that requires cash at hand.  If you want to withdraw early you pay more of a penalty than just the tax rate.   Put differently: investing in your human capital, at a young age, can yield stronger results than just squirreling money.  I'd say don't worry until you are 30. BTW: I'm 24 now.  I used to save money in a 401K for a few months, before I understood the rules.  Since then, I decided against 401K and just saved the money in a bank.  After a few years, I had enough to start my business :)  the 401K couldn't give me that opportunity. Further Explanation: I am in the NYC area.  Many of my friends and I had to decide between living in manhattan or choosing to live in the outer boroughs or NJ.  One thing I noticed was that, while the people in manhattan were burning much more money (to the tune of 1500 per month), they were actually much more productive and were promoted more often.  Having lived in brooklyn and in manhattan, even though it is less expensive, you actually lose at least an hour a day thanks to the commute (and have to deal with crap like the 6 train).  Personally, after moving in, I invested the extra time in myself (i.e. sleeping more, working longer hours, side projects).  Now, when all is said and done, the people who decided to invest in themselves in the short term are financially more secure (both job-wise and economically, thanks to a few bonus cycles) than those who decided to save on rent and put it in a 401K. As far as the traps are concerned, my dad tried to take out a student loan and was denied thanks to a Vanguard quirk which didnt allow more than 50K to be borrowed (even though the account had over 500K to begin with). Here's a good strategy: Open up a Roth IRA at a discount-broker, like TD Ameritrade, invest in no-fee ETF's, tracking an Index, with very low expense ratios (look for around .15%) This way, you won't pay brokers fees whenever you buy shares, and shares are cheap enough to buy casually. This is a good way to start. When you learn more about the market, you can check out individual stocks, exploring different market sectors, etc. But you won't regret starting with a good index fund. Also, it's easy to know how well you did. Just listen on the radio or online for how the Dow or S&P did that day/month/year. Your account will mirror these changes! At your age (heck, at MY age :-)) I would not think about doing any of those types of investments (not savings) on your own, unless you are really interested in the investment process for its own sake, and are willing to devote a lot of time to investigating companies in order to try to pick good investments. Instead, find a good mutual fund from say Vanguard or TRP, put your money in there, and relax.  Depending on your short-term goals (e.g. will you expect to need the money for college?) you could pick either an index fund, or a low-risk, mostly bond fund. If it's money you can lose, and you're young, why not?  Another would be motifinvesting where you can invest in ideas as opposed to picking companies. However, blindly following other investors is not a good idea.  Big investors strategies might not be similar to yours, they might be looking for something different than you.  If you're going to do that, find someone with similar goals. Having investments, and a strategy, that you believe in and understand is paramount to investing.  It's that belief, strategy, and understanding that will give you direction.  Otherwise you're just going to follow the herd and as they say, sheep get slaughtered. "For a job doing that kind of stuff, what is PREFERRED is 4 year undergrad at ivy league school + 2 year MBA at ivy league school, and then several more years of experience, which you can sort of get by interning while in school this will of course saddle you with debt, which is counterintuitive to your plans basically, the easy way up is percentage based compensation. without knowing the right people, you will get a piss poor salary regardless of what you do, in the beginning. so portfolio managers earn money by percentage based fees, and can manage millions and billions. real estate agents can earn money by percentage based commissions if they close a property and other business venture/owners can do the same thing. the problem with ""how to trade"" books is that they are outdated by the time they are published. so you should just stick with literature that teaches a fundamental knowledge of the products you want to trade/make money from. ultimately regardless of how you get/earn your initial capital, you will still need to be an individual investor to grow your own capital. this has nothing to do with being a portfolio manager, even highly paid individuals on wall street are in debt to lavish expenditures and have zero capital for their own investments. hope this helps, you really need to be thinking in a certain way to just quickly deduce good ideas from bad ideas"