Getting Started with Investing

When you invest, you’ll usually find that the bigger the risk you take, the more money you’ll end up making. But, you need to make sure that you do your homework and don’t invest haphazardly. When you start, and where you put the money, are the keys to success in accumulating wealth. For example, if you make an investment and earn 4% a year on your money, it will double every 18 years or so. If you earn 8% on your money, it will double every 9 years. So, if you invested $400 at 4% interest a year when you were 16, you’d have about $3,200 by age 70. But, if at age 16 you invested $400 at 8%, when you turned 70, you’d have about $25,600. Then again, if you invest poorly, you could end up with nothing.

If you’ve never invested before, you’re probably wondering how to get started. Before you do anything, consider consulting a financial advisor, who might be able to help you make informed decisions about where to invest your money. If you’d like to do things on your own, here are some ideas of where you can find some of the investment avenues discussed in this section.

Click the links below to read more about each of the topics:

You may also want to check out the various Bank of America Resources to help you take control of your finances.

Stocks

Stocks The most common way to purchase stocks is through an investment firm or brokerage. A broker is registered with one or more stock exchanges, in order to trade stocks on your behalf within that exchange's market.

Full-service brokerages offer you expert advice on your investments and will manage your account for you. However, they can be pretty expensive. Discount brokerages won’t give you very much personal attention or advice, but they cost quite a bit less than a full-service brokerage. These days, you can find a lot of discount brokerages online.

Another way to buy stocks is through your employer’s direct stock purchase plan, if they offer one. These plans allow investors to buy shares of the company’s stock directly from the company itself. Most have a minimum initial deposit but are happy to waive it if you agree to automatic monthly withdrawals from your checking or savings account. Or, in some cases, you can even choose to have an amount taken directly from your paycheck to invest.

» Investing

Getting Started with Investing

Stocks

Bank of America Resources

Investing