Putting Your Money to Work
You have to spend your days working, so why shouldn't your money? Investing is one of the best ways to grow your money, and there are millions of different ways you can do it. Since we're mostly beginners here, I'll try to keep this fairly simple to start. Once you get addicted to investing (and you will!) there are plenty of sources that can help you build your portfolio even more... but let's not get ahead of ourselves.
When I first decided to open a mutual fund, my boyfriend didn't want to tell me which one to invest in because he didn't want to feel responsible if it ended up being a bad pick. That's because anytime you invest, your are subjecting yourself to risk. That doesn't mean you should stay far away from all things Wall Street, but spend your time researching before you give you invest your money into something and try to make decisions that you are comfortable with.
Mutual funds and index funds are a good way to start, and there are several that are geared towards beginners. Two of the mutual funds that I looked into were PRSGX by T. Rowe Price and VGSTX by Vanguard. I eventually choose PRSGX because there was no minimum investment as long as you set up an automatic purchase for $50 or more each month until you reached a balance of $2500. For me, this was do-able and a good way to get my feet wet. VGSTX required a $1000 minumum investment and I just wasn't comfortable investing that much at one time.
MSN Money's Beginner's Guide to Investing is a great place to learn how to get started. It will help you figure out how much to invest, what to invest in, and how to build a portfolio that you're happy with.
If you don't quite understand the benefits of investing, allow my boyfriend explain it to you a little better in this video. He discusses how much money you can gain from investing $1000 over time versus charging the same amount to your credit card.
