small investments http://www.wisebread.com/taxonomy/term/16846/all en-US 7 Great Investments for First-Timers http://www.wisebread.com/7-great-investments-for-first-timers <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-great-investments-for-first-timers" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/1367358075_9c473e32fd_z.jpg" alt="woman and piggy bank" title="woman and piggy bank" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>Whether you&rsquo;re young or not so young, if you haven&rsquo;t put any of the money you earn into some type of investment yet, chances are you&rsquo;re pretty intimidated by the whole thing. I&rsquo;ve been there, and I can appreciate how confusing investing seems. But if you actually peek behind all the stock tickers and complicated commentary on CNBC, what you&rsquo;ll find is that a lot of investments are pretty simple. And, although it takes a little work to learn and understand these investments, they're totally worth it. Not only is investing a much better way to make the most of your money (compared to, say, stockpiling it in a zero-interest account or, worse yet, just spending it all), but understanding the world of money is the best way to put yourself in control of your finances.</p> <p>If you haven&rsquo;t started investing, don&rsquo;t worry &mdash; it&rsquo;s never too late. Here are seven simple, suitable investments for first-timers to help you get started. (See also: <a href="http://www.wisebread.com/investing-101-5-essential-steps">Investing 101: 5 Essential Steps</a>)</p> <h2>1. High-Interest Savings Accounts</h2> <p>The term &ldquo;high&rdquo; is definitely relative in this kind of interest-rate environment, but this type of savings account will offer a higher rate than most other bank accounts and can be a good place for a brand-new investor to start. That&rsquo;s because in order to be a regular investor, you must first become a regular saver. Shop around at local banks and credit unions for the highest interest rate possible, and start making regular contributions to your new savings account. <a href="http://www.wisebread.com/figuring-the-size-of-your-emergency-fund">Once you have some money saved</a>, you can look at building a more complicated &mdash; and higher earning &mdash; portfolio.</p> <h2>2. Certificates of Deposit (CDs)</h2> <p>CDs are savings certificates in which money is deposited for a certain amount of time (usually between three months and five years) in exchange for interest, which is paid when the CD matures. CDs generally have higher interest rates than savings accounts, but once you put the money in, you can&rsquo;t take it out until the investment matures (at least not without paying a penalty or losing the interest you would have earned). Generally, the longer the CD&rsquo;s term, the higher the interest rate. The interest on these babies is guaranteed by the institution that provides them, which makes them a simple, stress-free way to give your money a little boost.</p> <h2>3. Money Market Accounts</h2> <p>A money market account is offered by banks and credit unions. It&rsquo;s a lot like a regular savings account, except that it pays somewhat higher interest and may also have a minimum balance requirement of between $1,000 and $5,000. You can even write checks from a money market account, although the number of withdrawals allowed per month will be very limited. Money market accounts are very safe, but it is still possible to lose money here. Because many money market accounts will charge a fee for going under the minimum balance or over the maximum number of allowable transactions, it is important to manage this type of account carefully.</p> <h2>4. Mutual Funds</h2> <p>A mutual fund is a pooled investment that many investors buy into together. This allows investors with more limited means to invest in a group of different stocks, bonds, and other investments, providing instant diversification (otherwise known as not putting all your eggs in the same basket). Mutual funds can also add some level of management expertise, because the investments are often chosen by a portfolio manager. But while mutual funds are very simple to use, investors should be on the lookout for high fees, often known as management expense ratios (MERs). When looking for a mutual fund, consider buying a low-fee fund that tracks an index &mdash; that&rsquo;s the kind of performance many large mutual funds deliver anyway.</p> <h2>5. Exchange-Traded Funds (ETFs)</h2> <p>One of the drawbacks of mutual funds is that they can&rsquo;t be traded quickly &mdash; and investors will often incur fees when they try. An <a href="http://www.wisebread.com/the-duel-etfs-vs-mutual-funds">ETF, much like a mutual fund</a>, is a combination of many different investment assets. However, ETFs are traded on the stock market like stocks, allowing shareholders to respond to changes in the market more easily. ETFs also tend to have lower fees than mutual funds (although they will be subject to trading fees every time they&rsquo;re bought and sold). Most ETFs aim to match the returns of a market index (like the S&amp;P 500), but watch out for more complex investments like inverse ETFs and leveraged ETFs. These investments carry significant risk, and should be avoided by all but the most experienced investors.</p> <h2>6. Stocks</h2> <p>OK, you got me. Stocks aren&rsquo;t the simplest investment out there, but they aren&rsquo;t rocket science either. The thing is, the only thing that will really ever prepare you to invest in stocks is to invest in stocks. Just do it slowly, and take the time to learn as you go. There are many low-cost brokers available now that make trading relatively inexpensive. When you can afford to put a little bit of money toward investing, give it a shot. Yes, it&rsquo;s possible you&rsquo;ll lose it, but if you can come to understand why &mdash; and eventually apply that knowledge to future stock picks &mdash; that&rsquo;ll be a valuable investment in itself.</p> <h2>7. A Retirement Account</h2> <p>If there&rsquo;s any type of investment you should be using, it&rsquo;s a retirement account. Whether it&rsquo;s a <a href="http://www.wisebread.com/4-reasons-why-a-roth-ira-may-be-better-than-your-401k">401(k), IRA</a>, or 403(b), the best way to ensure you have something set aside for your golden years is to start saving now. If your employer offers some kind of matching, take it. If you get a raise, increase your contributions. Whatever you do, making building that fund a habit. Unlike the other investments on this list, retirement accounts are really just accounts. As such, they can generally include a range of different investment types, many of which are found on this list. In other words, if you want to make the most of your retirement account, you&rsquo;re going to have to know something about investing.</p> <p>Retirement accounts have many different features and benefits &mdash; including tax breaks. You can check out a great overview about the <a href="http://www.schwab.com/public/schwab/resource_center/expert_insight/ask_carrie/retirement/which_retirement_account_is_best.html">different kinds of accounts here</a>. This is one area of investing that can get pretty complicated, so it may also be worthwhile to consult with a qualified financial planner.</p> <p>If everything isn&rsquo;t perfectly clear right now, sorry &mdash; that isn&rsquo;t how it works. I&rsquo;ve tried to provide a bit of a head start for new investors in terms of where to look, but when it comes to choosing, buying, and managing those investments, the rest is up to you. After all, it is your money.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tara-struyk">Tara Struyk</a> of <a href="http://www.wisebread.com/7-great-investments-for-first-timers">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-quick-ways-to-decide-if-a-company-is-worth-your-investment">4 Quick Ways to Decide if a Company Is Worth Your Investment</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-get-paid-for-saving-money">6 Ways to Get Paid for Saving Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/investments-worth-making-with-50-or-less">Investments Worth Making With $50 or Less</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-much-should-you-invest">How Much Should You Invest?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/retirement-for-stay-at-home-parents">Retirement for Stay-at-Home Parents</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment beginner investor savings accounts small investments Thu, 29 Nov 2012 10:48:43 +0000 Tara Struyk 955601 at http://www.wisebread.com Investments Worth Making With $50 or Less http://www.wisebread.com/investments-worth-making-with-50-or-less <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/investments-worth-making-with-50-or-less" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/2953824616_6c9ee4d2ac_z.jpg" alt="piggy bank" title="piggy bank" class="imagecache imagecache-250w" width="250" height="191" /></a> </div> </div> </div> <p>Having an extra $50 in your pocket can be a blessing or a curse, depending on how you use it.</p> <p>You could do something fun and treat yourself out to a nice dinner, blow it on a <a target="_blank" href="http://www.wisebread.com/playing-the-lottery-is-a-bad-gamble">lottery ticket</a> in the hope of getting more money, or find many other ways to enjoy the extra cash. The spending possibilities are endless. There's nothing wrong with enjoying spending money &mdash; it's one reason why people work so hard to earn it.</p> <p>But saving or investing it so you'll have it for a rainy day may be the smartest move, even if it's only $50. Putting $50 a month away in savings will at least get you in the habit of being a saver.</p> <p>No matter how you've come upon that $50 &mdash; by working a few hours, not buying lunch out for a week, or <a target="_blank" href="http://www.wisebread.com/cutting-the-cable-cord-has-more-than-financial-benefits">getting rid of cable</a> TV &mdash; there are plenty of ways to invest it for long-term savings. And I'm not talking about stock tips from your cubicle buddy that may not pan out. While some of these ideas are risky, my aim with this article is to highlight investments that can be started for $50 and can continue with regular deposits at least once a month. (See also:&nbsp;<a href="http://www.wisebread.com/investing-101-5-essential-steps">Investing 101: 5 Essential Steps</a>)</p> <h2>Savings Account</h2> <p>If you don't have one, this is the best place to start. Although interest rates are low, depositing money regularly into a savings account will get you on the right path to becoming a lifelong saver and not a spender. <a target="_blank" href="https://www.google.com/advisor/ussavings?bsp=1&amp;s=1&amp;kw=savings%20account%20calculator&amp;group=GenericRadio&amp;gclid=CJCpysDisLMCFQzhQgod8V0ADA&amp;q=savings+account+calculator&amp;b=E#!search&amp;Deposit+Range_D=50&amp;Account+Type_S=Regular+Savings&amp;Account+Type_S=Money+Market&amp;Zipcode_S=94518&amp;Issuer_S=__any__&amp;start=0&amp;si=0&amp;tknid=888826176">Search for a savings account</a> with a low minimum deposit, no fees, and the highest yield you can find, and start putting money there. Use a free online <a target="_blank" href="http://www.free-online-calculator-use.com/savings-account-interest-calculator.html">savings calculator</a> to determine how much you'll gain after a few years and regular deposits of $50 a month.</p> <h2>ETFs</h2> <p>Buying exchange-traded funds, or ETFs, is a way to buy stocks without all of the costs of mutual funds, says <a target="_blank" href="http://www.whitestreetadvisors.com/">Mike Sena</a>, a certified financial planner in Canton, Ga. Most mutual funds have an initial minimum purchase requirement of typically $2,500 or more, and investing $50 at a time can be unworkable, Sena says. Most every discount brokerage, such as <a href="https://us.etrade.com/home">E*Trade</a> and <a href="https://www.tdameritrade.com/home.page">TD Ameritrade</a>, have generous lists of commission-free ETFs that he recommends investing in until the investment reaches several thousand dollars.</p> <p>An ETF is traded on stock exchanges and trades throughout the day. While most brokers charge a small fee of less than $10 to trade them, there are plenty of ETFs without trading fees, though <a target="_blank" href="http://www.forbes.com/sites/investor/2012/02/13/are-commission-free-etfs-really-cheaper/">Forbes</a> warns investors may not be getting the best performing ETFs from brokers that don't charge fees.</p> <p>Sena recommends that for $50 a month, investments should be scattered among different types of companies, from a large company ETF one month to a small one the next, and an international one and other types of ETFs in other months. Such investments should only be made after making sure you have an adequate emergency fund and little or no consumer debt, he says.</p> <h2>DRIP</h2> <p>Joining a company's Direct Investment Plan, or DRIP, is a low-cost way to invest in an individual stock on a regular basis without having to go through a broker. Most <a target="_blank" href="http://www.directinvesting.com/drip_learning_center/how_to_enroll.cfm">DRIPs</a> don't charge fees for ongoing investments. Some require high minimum initial purchases, such as $500, so <a target="_blank" href="http://www.dripdatabase.com/Default.aspx">look for plans</a> with low minimums to start and that allow $50 purchases. You may have to save up for awhile to get to the initial purchase requirement.</p> <h2>Lending Club</h2> <p>Instead of putting your money in some big bank or company and not knowing where your money is going, loan money to your peers through <a href="https://www.lendingclub.com/">Lending Club </a>and avoid putting your money in a nameless, faceless bank. <a target="_blank" href="http://www.serenityfc.com/">Alan Moore</a>, a financial planner in Shorewood, Wis., recommends it as a great way to start investing partly because the initial investment can be made for $25. Loan returns range from <a target="_blank" href="https://www.lendingclub.com/landing/partner.action?partnerID=80019&amp;param2=540557371538032057e&amp;gclid=CNz20v3usLMCFY6DQgodWgIAqg">5.73% to 9.90%</a>, which is much better than a savings bond, CD, or <a href="http://www.wisebread.com/the-types-of-savings-accounts-which-is-right-for-you">other savings account method</a>. The loans can be risky, so it's a good idea to diversify with small loans to a variety of borrowers instead of loaning most of your investment with one person.</p> <h2>A Band</h2> <p>I promised to stay away from wacky investments, but <a target="_blank" href="https://www.sellaband.com/en/pages/how_it_works">SellaBand</a> is so intriguing that it may be worth $50 just for bragging rights. The site helps you find a hot, new artist to invest in. Initially an investment will get you free downloads, signed T-shirts, backstage passes, and other band swag. It's up to the band if you'll ever share in sales revenue. You may not get rich, but it's fun to say &quot;I'm with the band&quot; and really mean it.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/aaron-crowe">Aaron Crowe</a> of <a href="http://www.wisebread.com/investments-worth-making-with-50-or-less">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/get-25-free-for-opening-a-savings-account-with-5-05-interest">Get $25 FREE for opening a savings account with 5.05% interest. - UPDATED</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-choosing-the-right-fund-for-your-portfolio">Are You Choosing the Right Fund for Your Portfolio?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-etfs-can-put-more-money-in-your-pocket-than-mutual-funds">8 Ways ETFs Can Put More Money in Your Pocket Than Mutual Funds</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-ways-to-add-gold-to-your-portfolio">4 Ways to Add Gold to Your Portfolio</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-signs-an-etf-isnt-right-for-you">8 Signs an ETF Isn&#039;t Right for You</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment exchange traded funds savings account small investments Mon, 26 Nov 2012 11:00:29 +0000 Aaron Crowe 955563 at http://www.wisebread.com