Thursday, October 19th, 2017

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Ask YOUNG MONEY: How can I start investing?

Hello Young Money!

I am a college student and work part-time as a waitress. I am not eligible for my employer’s 401k plan as I do not maintain 40 hours a week.

My mother (age 46) does not have a 401k plan nor any significant funds stashed for her retirement. She has sacrificed all she has earned for my sister and me to have the education she was never allowed to receive. I have been taking out money from my income with the intent to find some form of investment/savings plan where I can earn interest for her no matter how small it is.

Could you please refer me to some investment strategies? I can afford to put aside $25 a week on her behalf and then use half of my annual tax returns a year from now until 2025. How can I stretch that money for her?

Thank you sincerely for your time,


Dear Krystal,

First, I commend you for wanting to take care of your mother in the future but I would say that taking care of your financial future might be the best way to help your mom. If you are financially strong in the future, you will be in a better position to do things like help purchase a home for your mom, help her with medical bills, etc.

She is still young and has many years of earning power ahead of her. Now that you can take care of yourself, there is a great burden removed from her financially so she can start putting money aside for herself with your assistance. The best gift you can give your mom is to learn all you can about managing money properly and investing for retirement.

When the time comes for her to retire and you can and want to help her, you will have that option if you manage your money properly for the next 20 years. There are many options for investing the $100 per month you have available right now. I strongly suggest looking into opening a Roth IRA. This would not be beneficial for your mother but is a good idea for you.

You can also start with an online savings account where you can earn a better interest rate than at a traditional bank. Emigrant Bank, for example, currently pays 3.2% interest on its online savings accounts. That is the country’s best savings interest rate that I know of currently.

Starting a savings account will help you set money aside while you research investing options. One of our partners, Sharebuilder.com, is a great source of information on how to begin to invest for higher returns on your money.

The Financial Planning Association also offers another good resource to learn more about investing for your future. Check out its "20 Keys to Being a Smarter Investor."

It is not easy to work and go to school at the same time but it is well worth the effort. By thinking about investing and saving at a young age, you are putting yourself well ahead of your peers.

Best of luck and please stay in touch.


Mike Schiano


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One Response to Ask YOUNG MONEY: How can I start investing?

  1. Godson says:

    The article is a great one.It shows that the younger generation is willing to take thier future in thier hands.I am a young Nigerian and I have already started investing because I hate poverty.So crystal you are not alone.Do keep it up and we will get there!

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