Hi, my name is Vlad Tess and I really want to start investing.

The thing is, that I get financial aid for my college and don't want to risk it. I mean, I could lose my financial aid. I don't plan to sell though. I want to buy gians and never sell short.

Anyway, the question is that, can I invest? I have only $15,000 income a year on average in NY. Please tell me if you know how this will effect me.


Thank you so much guys!

You may wish to look into a Roth IRA to start. A Roth IRA is taxed up front but the gains are not taxed. It is a retirement account but it also allows for withdrawl for first home purchase (typically). Most banks will have the ability to assist you setting up a Roth IRA. Just go and ask them about it. There is a maximum that you can put into a Roth each year and after you make over a certain amount, you are not allowed to have a Roth. They have great advantages and I'd highly recommend starting one if you can.

If you wish to have your income further hidden so as to not upset your standing as "flat broke" with the financial aid department then perhaps a 401k account is a good idea. Using a 401k account the money is deposited pre-tax and not considered part of your taxable income. This is also a retirement type account and there are penalties for early withdrawl but you are allowed to take short term loans against your account.

It is best to start saving for retirement as early as possible so even if you can only contribute a small amount, these accounts might be a great benefit to your overall savings in the long run.

One warning - ask your bank about associated fees. There are sometimes fees associated with small accounts that can be prohibitive. You will want to know about fees and penalties before making any investment.

With these two examples the typical investment vehicle within the account is mutual funds and you can decide the amount of risk you wish to have when you choose the type of funds within your account. Banks have people who will sit and discuss these things with you... no need to feel shy about asking questions to a investment counselor at your bank of choice.

Hi aminator2002,

I want to thank you for your response. The thing is that I really want to invest into stocks. I can't do 401 because I don't have an employer. Is there like an IRS site where its posted about the tax charges?

Thank you so much.

I can only help on a very basic level with stocks since I only have experience with mutual funds. I still suggest going to an investment counselor at a bank. Most people with a minimal amount of cash aren't going to take it to a stock account because fees are rather high and you have to manage it yourself.

That being said, have you investigated etrade.com? I think a small online trading account could be established without much trouble. But I want to warn you that there will be fees and unlike both investment types that I mentioned, there is no tax shelter for stocks and you will pay full capital gains on your stocks and that will be considered as part of your income. In your case with an income of 15k, that probably won't amount to a hill of beans, but it's something to consider. If you're looking for a quick turn around on your available money and don't want to pay high fees and don't want to take much risk then consider investing in short term CDs. A CD pays a guaranteed amount and you can make them renew on various time frames such as 30 days, 90 days etc. These will also be taxable, but if you want to make sure you aren't gambling the savings you have then they are safe and in general a good way to make about a 5% return.

You will want to consider whether you really know enough to buy stock and if you have the kind of income level to take risk. If not, then consider a CD. If you have a company in mind to buy stock then I think an etrade account is probably a decent route. But in this economy please be careful.

Ami, would you e-mail me please? I have a question about investment that I don't want to post publicly. It's simple and quick. TAL.

Thank you so much. I'll check out the site you've mentioned.