Asked • 04/04/19

Should a high-school student invest their (relative meager) savings?

I am a high school student, I don't really have much money, between one and two grand in my savings account. However, I have friends who are investing in both penny stocks and stocks. I do not really know much about the subject, but I do find it interesting. I receive no interest from my checking account, so I have been told I am misusing my money by not doing anything with it. From the suggestions of other people and myself I have narrowed down my options to: - Investing in stocks - Investing in penny stocks - Investing in bonds - Saving up for college - Save up for emergencies - Start thinking about retirement (which I have been told is never too early to start thinking about) Do you think investing in stocks with a small budget would be a good option?

Nathan H.

I think you are right where you need to be for now. You should not be investing in something you have little to no knowledge about. Can you make returns on your investments without the fundamentals? Absolutely! Can you lose all of your money without the fundamentals? Absolutely! Can you lose all of your money with the fundamentals? Absolutely! When you invest, you need to have statistical analysis projecting gains before you ever put a penny in. I would highly suggest starting by looking into risk and bankroll management. You can use the Kelly Criterion to get you in the right direction but ultimately, it is going to take extremely hard and work at all times to ensure "consistent" growth. Investing will undoubtedly have its roller coaster moments so you need to diversify your bankroll to ensure you can withstand the losses. The money you earn is not spending money though. The money you invest is not spending money. You need to have a separate set of money for bills, going out, etc. Money is to an investor as wrenches are to a mechanic. Money is your tool to make more money. When you spend money, you lose your tool to make more money. I'm sorry if that was a bit repetitive but it's true. If you have any more questions, please feel more than free to reach out to me and I will help you to the best of my capabilities.


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