Real Answers for Life’s Money Challenges
Im a 24-year-old single male and recent college graduate.
I dont have any idea how to invest it.
My dad says that since Im young, I need to take risks.
Hes suggested some marijuana stocks and silver stocks that hes made money on.
But this seems like it might be too risky to me.
My dad doesnt work in investing, and I dont think he knows a whole lot about it.
Im not making enough to hire a financial advisor.
Is my dad giving me bad advice?
-New Investor
Dear Newby,
Your dad loves you and wants whats best for you.
But that doesnt mean he knows anything about investing.
Your dads suggestion that you open aRoth IRAwas a good one.
By forgoing a tax break now, youll get tax-free income when you retire.
But it sounds like your dad isnt clear on the kind of investment risks beginning investors should take.
But when you invest in just a couple of stocks, your risk of losing everything is substantial.
Your investments may never recover if things go south.
There may not be any money left to recover.
You never want your lifes savings tied to the fate of a single company or two.
Both the silver and marijuana industries are especially volatile.
The price of silver fluctuates wildly for a host of reasons.
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That doesnt mean you should never invest in silver or marijuana.
But you should only do so if you already have adiversified portfolioand youre starting with a relatively small amount.
And never use your retirement funds for these kinds of speculative investments.
The best way to start investing is to spread your money across the stock market.
You dont need a financial adviser here.
Im not asking you to play financial adviser here.
Youre an adult, and you dont need to provide your dad with a copy of your brokerage statement.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder.
Send your tricky money questions to[email protected].
