How to invest £250 at 16?

[Joe]

What ways can i invest £250 at 16 ? Thankyou.

[Harry]

safest bet is buying £250's worth of gold, sit back and wait a few years. one way or another you'll make a profit on it. just make sure you now what your buying and were you buy it because jewelers are rip off artists.

[Ashcan]

How long for.

Look at shares.

If you want to invest for the long term, look at the FTSE 100, choose a well established company that pays a dividend but that you think is in an industry that has a good future.

Here's the trick for long term investment, do not get paid in money if you don't need it, get paid in shares (and add a little amount when the share payment is made to increase your holding.

Lets say you go for XYZ at 90p per share, so you buy 250 shares (there is a commission to pay) but lets pretend it is the difference so 250 x 90p = £225 + £25 commision £250.

Then the dividend is paid at 2p per share (which is about 2.2%) you have £5 in shares which is 5 .6 shares and lets say the shares are now 80p so you add 20p to make 6 shares.

You now have 256 shares priced 80p because the market doesn't have your faith in the shares, so they are only worth £204.80.

But they have a good year, and the following year they pay 2.5p dividend on your 256 shares and the market realises it can see a nice dividened payment so the price has gone back up to 110p

256 x 2.5p = £6.40 but they are 110p so you get 5.8 shares you add the 30p to get 6 shares making 262 shares (now worth £288.20 for your £250.50)

next year 2.8p dividend £7.38 worth of shares, lets price them at 130p which you top up to give you 6 shares 268 shares worth £348 40

My Mum knew a woman who when her husband died was in shock, the husband had bought shares in the early 1960s in a company called Associated Dairies, who did milk and milk deliveries and bakery, we don't think he bought more than £100 worth of shares, and never took the dividend in money.

Associated daires became Asda and were bought out by Wal mart the shares were worth £600,000 (about $1,000,000) around 2001.

He should have started drawing the dividend in money 10 years earlier and enjoyed it, but it shows the power of compound interest and a growing company.

The price earnings ratio is the one to seek out, and look to find a sound company with a future of dividend payments, so forget Facebook which was a crap launch and will never make the profits it would need to warrant the price.

Gold is going nowhere now, come back to it in 10 years time when it has lost its price and then only buy for show.


Once you find your feet, then you can look for a new start up or future big earner.

Genetics and Chemistry are future industries.

Good luck.

[Paul]

Depends, do you want a small term investment or long term. Gold is not a bad idea for long term. But as you are only 16, do not take too much risk. Try to go for something which is less risky even though the return is not too high.

Here are few short term investment ideas:

•Checking accounts: Because they are designed for ease of withdrawal and deposit, checking accounts pay nearly no interest. They are not recommended for storing any money that will not be used in near-term transactions, but they are extremely convenient for writing and depositing checks, accessing ATMs and arranging for automatic transactions like bill paying. Some checking accounts require fees and minimum balances, so they should be researched before they are opened.
•Savings accounts: Although they provide higher returns than checking accounts, savings accounts still offer very low returns. They are a safe place to store money temporarily and can often be used in tandem with checking accounts to manage basic personal finances.
•Money market accounts: Money market accounts offer many of the same services as checking accounts although transactions may be somewhat more limited. They are usually managed by banks or brokerages, so they can be a convenient place to store money that is earmarked for upcoming investments or has recently been received from the sale of an investment. Returns remain fairly low with these accounts.
•Money market funds: Money market funds are very liquid investments that offer marginally higher returns than the previously mentioned options. They are often managed by brokerages and used to store money that is not currently invested. Unlike bank accounts and money market accounts, deposits are not FDIC insured, but the risk is extremely low.
•Certificates of Deposit: CDs offer higher rates of return in exchange for tying up invested money for the duration of the certificate's maturity. Money removed before maturity is subject to a penalty. CDs are very safe investments, and most are FDIC insured.
•Treasury Securities: There are also a variety of Treasury securities and bonds that can offer modest returns and high liquidity for short-term storage.

[BigDarren]

Not enough for stock market investment (as already suggested), because dealing charges and price spread will take a big chunk. Savings accounts have abysmal interest rates. Gold is a gamble. Other than buying and selling for profit, suggest that you just keep it for when you need it.