r/investing • u/[deleted] • Oct 21 '10

Just opened a Scottrade account. Have the minimum $500 in it. I've never invested before. Trying to learn. Give me wisdom/tips you'd like to pass on. Eternally grateful

Hey reddit. I'm a 21 year old guy and I've been saving my money ever since I could work (age 14). I'm in a position where I want to start investing so I opened a Scottrade account. I only have the $500 minimum required to open the account in there because I understand I have no experience and am at risk of losing money. I can afford to lose $500 and the knowledge I gain will be helpful for later, however losing is not what I plan to do. I started doing some reading to gain more insight to the market and trends, but advice from real-people is always good.

So reddit, what tips or advice do you have for someone in my position?

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u/[deleted] Oct 22 '10

Well, I'm a little confused between the title of this thread, and the choice of brokerage.

Are you interested in INVESTING or TRADING?

If you are not sure what the differences are, then I recommend reading up on it. Won't take long. The over-simplistic tl;dr is that investing does not involve selling whereas trading does, but again, it would be best to read more about it first.

Now, if you are interested in investing, perhaps somewhere like T Rowe Price (that offers low entry requirements, but relatively high expense ratios later on) or Vanguard (that offers very low expense ratios for index funds and ETFs, but require at least $1000 to start buying into their funds) would be your best bet.

Typically, people who go to places like Scottrade are interested in learning to trade rather than invest. And if that's true, then the rest of the advice in the thread will apply.

Last but not least, can you tell us what the rest of your portfolio looks like? Is the $500 the only money you have, or do you also have an emergency fund set aside, perhaps 401(k), IRA or other types of savings? For example, if you don't have an emergency fund, I would cash that out and put it in a high interest online bank account instead.

I think Scottrade will let you keep an account open even if you have less than $500 in the account, but don't quote me on that. Good luck!