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Did
you ever hear of "investing" school?� How
about a high school or college elective called "how
to make money in the stock market?"�� Did
your dad teach you how to research stocks to pick some
solid winners?��
�No?...well cheer
up...that's what this online zine is all
about!��
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| The
Plain� Summary
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You
can invest in either money market funds, CDs or mutual
funds for under $500. |
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Getting
Financially Fit!
Think of investing just
like exercise.� You didn't just start running 3
miles after your first attempt (if you are a
jogger).� Instead, you started running maybe a
block, then, later 2 blocks, a mile, 2 miles,
etc.��
Think of investing in the
same way.� You SHOULD start out with small amounts
while you learn investing, even if you do have over
$500, like we suggest!� Then, as you learn
more, you can start putting more money to work for
you.� It's important to start small and with less
risky investments, because then you will build up your
"financial muscle" and savvy...and be able to
move more quickly into the bigger, more riskier
investments.��
Your
Options (no, we are not talking about the
"stock" kind here)
Let's take a quick
summary of some $500 or less investment possibilities:
Money
Market (MM) Fund -�These
is basically an account where the bank lends your money out to other
companies or individuals.� The up side is that you
get a much better rate on these than a traditional
"savings" accounts...these are now passe!�
Also, you can withdraw from these at any time in most
cases.�
Certificates
of Deposit (CD) -�This
is also an account that the bank lends out to other
companies or individuals, except that the bank makes you
commit to certain periods of time without you
withdrawing.� The upside is you get a slightly
better interest than the MM fund.� Downside?�
Withdraw your money early, and you might has well put
your money in a mattress for 6 months.� Flashes of
the great depression?
Mutual
Funds -�Way
different than either MM or CD.� This time, you are
actually buying a small part of several companies...you
are an owner, not a lender!� The mutual fund is a
collection of several companies' stocks that is put
together to act like a stock (a share itself).�
Basically, when you buy one share of a mutual fund, you
have bought a very small piece of a lot of
companies.�
In our case, we are going to
concentrate on a type of mutual fund known as large
cap.� This is a lower risk type of fund that�buys
stocks of companies that have a large net (or capital)
worth...usually, companies that have a value of over a
certain figure...usually around $1 billion or so.�
The upside?� More potential for a better
return.� Downside?� More potential to eat
beans and rice for the next few months.
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