How to Start My Road To Financial Freedom?

EthanR answered one year ago …

At age 17 I would start off with Mutual Funds or Exchange Traded Funds (ETF) before you start buying individual stocks. You need to read and learn much more than you will get at any one web site. Some great authors to read about stocks are Peter Lynch, William O'Neil, and Norman Fosback. After you learn about fundamental analysis, then you might want to read about technical analysis as well.

Congratulations on your business! At age 17 you are taking steps to insuring a wealth building future for yourself. Having one's own business and investing are the ways to get there. Read everything you can, go slowly, and do not trade individual stocks with real money until you try trading "on paper" first.

I would also recommend that you read the books by Dave Ramsey and go to wwwdaveramsey.com to use his investment calculators. You will be amazed at how wealthy you can become by age 40 or 50 just by putting a couple of hundred bucks a month into a mutual fund. You can play around with the interest numbers, see how you will do with an 8% return, 10% return or 12% return.

A lot of younger investors make the classic mistake of becoming too aggressive, trying to get rich quick in six months. They do this by day trading, trading penny stocks or low priced stocks, or putting all their money into one stock. Typically they lose all their money, then either have to start all over again, or worse they get discouraged and give it up completely. This is a big mistake. If you want to have some money working aggressively for you, that is fine. There are some mutual funds that are aggressive growth stocks. When the market is good they go up a lot. When the market is bad they go down a lot. By dollar cost averaging (putting the same amount of money in each month on the same day over a period of time), you can minimize your risk somewhat.

Another important lesson is to diversify your assets. Put money into different sectors of the market, such as tech, energy, transportation, food, gold, etc. When one sector goes down, another will go up to offset your losses. You can sell a sector when it becomes too frothy, and buy more in sectors that have been beaten down.

You sound like a winner. Best of luck!