No one has the time or enough interest to examine the fortunes of every single corporation out there. Most of us are too busy doing our jobs and raising our families to spend endless hours staring at computer screens, scrutinizing stock market TV shows, and reading investment publications. Some people invest their money with money managers, who are specially trained to pick stocks that, at least in theory, have the best chance of going up. Money managers do all the footwork you would do if you had the time. They read about stocks that interest them, and buy and sell in order to maximize their clients' investments.
Money managers run what are called "mutual funds." Put simply, a mutual fund is a pool of money - sometimes in the tens of millions of dollars - that one person controls. That person invests the pool of money on behalf of all the individual investors, often people just like you. There are literally thousands of mutual funds to choose from. If you are very aggressive, enjoy risk, and have time to let your money grow, you can choose aggressive growth–type funds. For older investors who are more interested in a fixed income, some funds specialize in stocks that pay secure dividends.
There aremutual funds for every taste. One of the best places for specific information on mutual funds is Morningstar, where the professionals learn how funds are doing. You and your kids ought to pay a visit to the website and get some extra education yourselves.
I know what you're thinking: "John, I make $25,000 a year and you want me to invest in Wall Street?" Yes, friend, I do! You don't need millions of dollars to start an investment portfolio. Perhaps you'd like to open one up with your children. For just $50 a month, you can start a mutual fund investment with a number of major companies, such as American Century, one of the country's top-rated sellers of mutual funds.
They are very interested in helping Americans of all economic levels become involved in investing.While some companies require a minimuminvestment of $2,000 or more, American Century has no minimum - as long as you are willing to commit to investing $50 a month. You can even arrange to have this amount automatically deducted from your bank account each month.
Visit their website to see the sort ofmutual funds available. After you've signed up, make periodic visits to the site to see how well your fund is doing. You'll find it exciting to watch that money grow.
People often think that working-class families are incapable of saving money. That's just not true! At OperationHOPE,we frequently work with single, working-class parents and married couples who have managed to accumulate tidy sums of cash. One couple, a schoolteacher and a butcher, brought in a combined income of $50,000 a year. They managed to save nearly $60,000, which they kept, in cash, in a safe at the butcher shop. He simply didn't trust banks. I'll never forget the day they brought in all that cold cash - and that was really cold cash!
People who are able to save such amounts of money should consider investing in real estate. There are enormous financial and tax benefits for individuals who can make a down payment on a twofamily home or a small apartment building. Buying real estate is not beyond your means. If you can develop a habit of saving, before you know it, you can be a landlord who receives checks every month instead of writing them.
When you buy a duplex or a two-family home, you live in one unit and rent out the other. You'll be able to write off depreciation, interest, and just about any improvements that you make on that combination home/investment. If you've got cash hidden under the mattress or in a meat freezer, now may be time to take it out and plunk it down on a two-family home.
Once you own your own home and/or rental property for a few years, if the value goes up, you can take out some of that money in the form of an equity loan and buy another property. Before you know it, you can be a mini real estate mogul. Wealthy people become wealthier because they put money into assets that grow - stocks, bonds, and real estate. Many wealthy people I know started off with limited educational opportunities and little family wealth. Most are self-made individuals who began with the same slender resources that youmight be working with. There are no limits to what you and your children can do when you learn about investment opportunities.
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1. Show your kids how to save money and become successful
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