I am a 15 year old who is looking to invest my earnings, help decide?

Question

I have about $1,000 to invest. I was thinking of doing a Direct Reinvestment Plan. I just wanna know what everybody thinks. I have a job and do yard work for my neighborhood and I am willing to add almost all of my earnings into the option i choose. Can anybody help me decide?
Please give me options; CDs, Money Market Accounts etc.
I live in Ohio
I have a 3.9 GPA
I dont know if any of that information is relevant but I thought the need may arise.

Answer 1

If you don't think you'll need the money for anything, you might consider starting a retirement fund. If you start early, the compounding interest will make you unbelievable rich in 40 years. Here's a link to a great msn.com article that talks about "starting in your 20s to get rich" that's worth a read:



http://articles.moneycentral.msn.com/CollegeAndFamily/MoneyInYour20s/ToGetRichStartSavingInYour20s.aspx



Now, if retirement is too far away and you are looking at something short term, some banks have special promotional CDs geared for tweens and teens. These are called "Youth CDs" and are 1 year CDs with a 1.45% interest return. Of all the investment options I looked at for my teens, this seems to be the best paying one at the moment.



As far as a money market, some banks require a minimum $2500-50000 deposit to start earning interest. Interest rates are running on par with the youth CDs so there's really no advantage going that direction.



There's also savings bonds. I bonds are really popular right now since they follow inflation and can be cashed in as less as a year. Here's another article from the US Treasury that explains how bonds work and pay out:



http://www.treasurydirect.gov/indiv/research/indepth/ebonds/res_e_bonds_eecomparison.htm



You really have several options when it comes to investing. If your parents have an accountant, he would be a good person to talk to about other investment options.

Answer 2

MMA are worthless these days; a CD is a better option, though interest rates are still really low.



If you want to involve some risk but also improve the likelihood of returns, you could open an online account at a discount brokerage and invest the money in a mutual fund. Stick to something simple like an S&P 500 index fund.

Answer 3

Just put your money in the bank or credit union in a one year CD where you can get the best rate. {Actually, I beat that handsomely. My credit union pays 6% interest on the first $500 I have in my savings and my checking accounts! - so look around. Or read the fine print and go for a (say) $100 bonus from a bank for signing up (and leaving your money there, of course).



Note: a DRP is when you already own stock, and instead of getting the dividend sent to you in cash, the company uses it to buy more of its shares in your name, for you {an advantage is no brokerage fees.}



Your strategy for now is to just preserve the money you have, for the upcoming future (girlfriend, car, college, ______).



EDIT: You are too young to even think about retirement accounts. [see above ^^^] {and they are of no value to you tax-savings wise, either; unlike me who can put $3,000 in an IRA and save $1,000 (33% return) on my taxes.}

Answer 4

You can check out the website and see what you think.