Beginners' Investor Page

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I. Just Spending Gets You Nowhere

As a kid, you probably spending all the money you get as fast as you can. By doing this, you also get a 0% return on your money, and who would want that toy you bought after ten years? There’s a better way to spend your money - invest. Let’s learn some concepts.

My parents say that they are making money off their money by investing. I would sure like some more money. How can my money make money?

I know I should set goals in my life and learn how much they cost. How can I set goals? What do they cost?

I hear adults worrying about "the rising cost of living." How does the cost of living rise? How does the cost of living affect whether to invest or not?

I'm eager to make some money. Are there any reasons I shouldn't start investing now?

This investing stuff sounds too good to be true. Constantly making money? Are there any downsides to investing?

Well, I think I'd understand the concept behind investing if there weren't so many terms involved. Do we kids have firsthand experience in investing during our lives--even without knowing it? How can I learn about investing in a simple way?

II. Bank Accounts

Perhaps some of you are saving your money in a bank. Good. You’re ahead of others. You’re getting a 3% return on your money. But there’s a problem with saving in banks—and there’s also a better way!

I have an account in the bank, so I know I'm getting interest, and I'm proud of it too. Unfortunately, some of my friends say that that's not a good way to go. Why?

III. Bonds

A better way to make money is to lend it to others by buying bonds. With bonds you can get a 5% to 7% return on your money.

I know now I can make money by lending to others. But are you trying to tell me that someone actually wants to borrow my money? Who would? What kinds of institutions can I lend money to?

What are bonds that I hear kids are getting as gifts?

If I lend money to someone, can I get my money back any time I want?

Well, when I let friends borrow money, I tell them that they better pay up. What happens if the companies to which I lend money can't pay me back?

If some companies don't pay back bonds, how can I find out which ones are reliable so I don't lose my money?

IV. Stocks

Let’s shoot even higher by buying stocks in a profitable company than bank accounts and bonds. With stocks you can get a 10% to 15% return on your investment.

Exactly what is a stock?

A 10% to 15% return just by letting money sit there? You have to be kidding. Do you have any proof?

If I buy some stock and become part owner of a company, what difference can I make in the company?

V. Other ways to Invest

Besides bank accounts, bonds, and stocks, are there any other ways to make a profit? Are they for kids?

I want to make more money by investing in stocks and bonds, but I don’t have the expertise. How can I find someone else to pick stock and bonds for me?

Financial Goal Calculator

Whether my financial goal is a bike or college, I need money to achieve these goals. How can different types of investments such as bank accounts, bonds, and stocks help me pay for my goals?

Beginner Stock Learning Center

It is vital that you understand the process of making money from stocks by choosing, buying, and managing them well. When you make that decision to invest in stocks, you are starting a process that's a kin to starting your own highly selective school. Just as you initially select students based on a standard, let's say, GPA above 3.9, with investing you also initially select stocks based on fundamental criteria. Next, you narrow down the 3.9 pool of students, after carefully exploring their backgrounds. Likewise, with stocks, you must pare down your initial pool of stock picks after carefully researching companies. Finally, you admit only the best students and begin to educate them; likewise, you "buy your stock," admitting only the best to your portfolio to manage. Your "stock" of students can bring prominence to your school. Similarly, your stocks can bring you fabulous wealth. Let's examine the crucial choices you need to make that can lead you to financial success.

I. Introduction

We kids don't have a zillion dollars, you know. How much money do I need to invest?

My parents aren't the kind that give allowance, but they will buy me a birthday present. What do you recommend?

II. Getting Stock Investment Ideas (or Picking Stocks)

In a nutshell, pick companies that make good products and provide good services. They will make good profits. Most importantly, consider companies whose products you can understand. Try not to consider more than 10 at a time.

"Lots of kids at my school wear Nikes. Maybe I should consider a share..."

When I go into McDonalds, there are always long lines. McDonalds must be making a lot of money. Should I go for a piece of McDonalds?

Bob's Oddities Store is always in a mess, and nobody's there--not even Bob! Should I buy this stock?

My uncle works at Hughes, and he says that they recently made a hot deal. Should I follow up on that deal?

III. Refining (or Screening) Your Choices, Doing Research

"Nike has had a past record of good growth and the future looks even brighter!"

In this stage of the selection process, try to reduce your list to 5 companies or fewer by doing research.

What standard is used to measure the performance of the stock market?

How do we calculate return on investment in the stock market?

External Factors: The profitability of a company is affected by a) government policy, (b) economy, and (c) competition.

Where can I find out about government policy?

About the economy?

How about competition?

Internal Factors: The growth of a company is dependent on its past track record, its products, and its services.

How can I get more information on the company itself?

How can I find stock prices and news about companies?

How can I tell whether a company is making money or not?

IV. Paper Portfolio: Simulating without the Cost

Buy shares in your favorite companies--without a single payment or any risk!

What is meant by paper portfolio?

I understand the potential of stock investment. What can I do if I don't have the money?

How can I practice my investment skills, without risking any real money?

Should I just jump into investing without previous experience?

Should I buy one or many stocks?

How can I play the stock market and get a feel for the way stocks behave?

V. Buying and Owning Stocks

Now you are ready to buy your stock.

How important is the stock market?

Where does stock trading occur?

You may be surprised to know, however, that you can't buy stock directly from the trading floor as you see on TV.

So from whom do I buy stocks?

Do I pay a fee? How much?

Can a kid legally buy stock?

Can I buy stock directly from a company? How? Do I have to pay a commission?

Can I buy one share or a few shares of stock?

How can I double my money in the stock market?

Stocks in Cyberspace For Beginners

Stock Quotes

Public Company Search Engine: Look for a stock symbol in this search engine's 7500-company database. You can enter all or part of a company name or the symbol of the company.

Data Broadcasting Corporation: Get daily stock quotes and stock market indices worldwide. This FastQuote service allows you to get multiple quotes and charts simultaneously.

PC Quote: Get daily stock quotes and market information for a company. Delayed quotes are free; real-time quotes are considered a charge service.

Quote.com: Offers many quote services, such as updated quotes to end-of-day-e-mail quotes on stocks, options, mutual funds, and bonds. Also contains portfolio services, news, analysis, commentary, company data, and more! Small charge.

Company Web Sites

InvestorWeb: Find the web sites of companies with home pages, color-coded by their importance to an investor.

NETworth Equities: Search for the companies which have homepages. A part of Quicken Online, the list contains over 1700 companies.

Hoover's Online: Search this powerful search utility by companies' ticker symbol, company names, location, industry, or sales. If the company found does not have an Internet homepage, Hoover's Online provides company profiles for a fee.

Search Engines - Yahoo, AltaVista, Infoseek

Personal Portfolio

DBC Personal Portfolio: Free service. Update your portfolio daily and calculate profit and losses with this personal portfolio manager. 10-stock limit and one portfolio only.

S & P Portfolio Tracking: Free service. There is no limit to portfolios you can add for one user. Order S&P reports from your portfolio.

News

Wall Street Journal Online: Read these Company Briefing Books which contain summary information on 7000 companies. It also offers continuously updated news and analysis of the world's markets. A small annual fee for subscribers to WSJ; additional fees apply otherwise.

Money Magazine Online: Get a daily summary of important business and investing stories from this MoneyDaily service.

CNN fn, CNBC: Obtain stock quotes and lots of other helpful information from Cable Financial News

USA Today Money: Interact with the editors at a popular business news publication!

MSNBC Commerce: See this product of Microsoft and NBC news.

Yahoo's Reuters Online Business Summary: Get business briefs, financial updates, and company information from Yahoo and Reuters

Research

AAII On-line - Life Cycle Investing - Stocks - Bonds

FAQ for Investing - Beginning Investors - Annual Reports - Books

INVESTools - Educational Resources - Basics - Asset Allocation - Strategy

LSU Financial Library

Merrill Lynch - Understanding Investing - Planning For College - Investor's Handbook

NAIC - Student Investment Clubs - Youth and Investing

Parent Soup - Saving For Your Child's Future - Raising A Money-Smart Kid

Prudential - Financial Goals - Different Types of Stocks - Fixed Income - International

Sallie Mae - Planning For College - Paying For College - Applying For Financial Aid

WWW Virtual Library: Finance and Investments

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