Academy of Young Investors

Frequently Asked Questions

Q) Out of the more than 18,000 available mutual funds, which one should I invest in?

A) Very popular question. We suggest investing in mutual funds that have been around for at least 18 years and consistently rank in the the top 10 with respect to annualized returns (learn more).

Myth) I don't have enough money to start investing

Fact) You can start investing with $25 a month. Key: you must continue to invest a small amount every month for at least 30 years to generate significant unearned income (learn more).

Myth) I'm to young to think about retirement

Fact) Young investors contribute less and make more over the long-term relative to older investors (learn more).

Myth) Investing has to be confusing and boring as hell.

Fact) Learning basic financial concepts will eliminate massive confusion and make investing fun.

Q) What the heck is a web based training module?

A) Click here for the answer.

Q) Can I start investing with $50 initial investment and $25 a month subsequently?

A) Yes. There are certain mutual funds that will waive the minimum investment requirements (~$500-$1000). In addition, thanks to the web there are several online discount brokers that will charge you as little as $2.99 per trade, which makes investing with $30 a month possible.

Q) When should I start investing?

A) ASAP. If your time investment horizon is 7-30 years. No one can predict which way the market will move in the short-term. However, over the long run (30 years) the market has outperformed other investment vehicles handily (~12% annual return).

Q) Isn't the stock market risky?

A) When you buy stock you expose yourself to market risk. The same is true when you buy a house or a piece of jewelry. The market decides how much your stock is worth from day-to-day. We will teach you how to address market risk with time and diversification. The longer the investment time horizon the lower the risk.

Note: The minimum investment time horizon for stocks is 7 years. Do not buy stocks if you are not prepared to hold them for at least 7 years.

Q) Can I depend on social security or my employer sponsored pension fund or 401K for retirement?

A) I wish we could depend on others for our retirement. The fact remains, no one cares about you like yourself. The average life expectancy for a woman in the USA is 80 years, 78 for men. Who knows what the life expectancy for US citizens will be 30 years down the road. You can bet medical technology will dramatically increase life expectancy. Can you count on the government to pay for your medical costs and living cost for 25 years past retirement? I doubt it. That is why politicians have already raised the retirement age from 65 to 68 if you born after 1960. Will your kids take care of you? Maybe. The bottom line is clear: one must plan for his or her retirement and prepare for it.

True freedom of choice is tied directly to your financial position

Do not let someone else determine how you are going to live out your retirement.