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How do I make the most out of a relatively small amount of money?

Personal Finance & Money Asked by adamSiwiec on March 15, 2021

I am < 18 and have been investing in the markets frequently (stocks & ETFs) over the past couple of years. I put in 200-400 dollars at time and have < $2000 in the market. I feel that by the time I make a profit with this small amount of money, I lost all my profits by having to pay fees to sell. Am I investing my money wisely, or is there a better solution for my situation?

2 Answers

Consider trying a broker that offers free trading. Robinhood is one such broker.

Answered by Comptonburger on March 15, 2021

First of all kudos to you for seeing the value in saving at a young age.

I feel that by the time I make a profit with this small amount of money, I lost all my profits by having to pay fees to sell.

There are several different things you can mean by this and I'm not sure which is accurate so I am going to address the first two that I thought of.

If you are selling your investments because you need the money (emergency expenses, saved enough for a short term goal, whatever the reason) then this may not be the best solution for your savings. Investing in mutual funds, ETFs, stocks, 401k, IRA, etc are typically for longer term goals such as a goal that is 10+ years away (maybe buying a home, paying for college for your children, retirement, etc).

If you are selling your investments because you believe that another investment is performing better and you want to get in on that one instead, what I would suggest is leaving the money you have invested where it is and starting future investments in the new fund/ETF you are interested in. For example if you have $2000 invested in fund X and now you do some research and fund Q looks more appealing that is great, start investing in fund Q with your next deposit. Any research you do will be based on past results, there is nothing that guarantees that fund Q will continue doing better than the fund X you already have. Trying to time the market rarely ends well for the investor.

I would encourage you to continue saving money a bit at a time just like you have been doing. Avoid selling your investments until it is time to sell them for whatever goal you intended them for. Set aside some cash to cover any unexpected expenses so you won't have to sell your investments to cover the costs, even at 18 unplanned things happen.

Answered by homer150mw on March 15, 2021

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