Someone explain Credit and Stocks to 18 Year Old(Rep for helpful answers)

[Iceson Beckford]

Recently turned 18 and I’m trying to get my adult shyt sorted out but I need some help

My family aren’t good with money so thought I’d ask brehs and brehettes on here

Just got a new card that comes with Phone and Travel insurance. Opened a new ISA savings too.

How do I go about building credit?

How do I invest in Stocks and Shares?

Are bonds good?

How much do I need to put aside in order to do so?

Got a part time job and some money but currently owed £300 from family members and want to use the money back wisely and save incase I want to bounce on my job.

All answers appreciated and reps for those with the best answers

 

[MJ Truth]

How much money do you actually have now? What are your current living arrangements? Where do you work/what do you earn there?

You may be putting the cart before the horse right now.

 

[Obreh Winfrey]

Things might work differently across the pond but in the US you build credit by regularly paying off debts and holding and maintaining accounts (checking, savings, etc.). Thanks to a savings account my parents opened while I was young I basically came it the gates with good credit. If you aren't in that position then get yourself a credit card with a small limit, make small purchases and only buy things that you have enough cash to cover otherwise. You don't want to get in the habit of swiping plastic with no regard of cost especially if you aren't employed.

As far as stocks don't do anything until you've done sufficient research on your own. Understand what they are, how they can help or hurt you, the tax implications for your situation. I occasionally post links to https://www.investopedia.com/ . Look up terms and concepts, get familiar with financial lingo. Then start watching stations like CNBC and Bloomberg (I assume Sky or BBC have business arms you can seek) and start watching the markets. Notice what happens to the market when there's big news events and such. The last thing you want to do is jump in with no plan - I almost did that but luckily I couldn't get my investing account set up so I didn't make mistakes.

You can purchase stocks using brokerage firms like ETrade, Fidelity, Charles Schwab, TD Ameritrade, etc. Your bank may even have a way to do it. Research how much trades (a single transaction of buying/selling) cost, the securities you can trade, everything you can so that you can make an informed decision. I went with TD Ameritrade because they own a platform where you can make mock trades. You do what is best for you.

Bonds are generally safe investment vehicles however the returns aren't necessarily great - a theme with investing is high risk high reward, low risk low reward, but all investments carry risk. Anyone who tells you they have a surefire investment you need to be wary of. If it sounds too good to be true then it probably is. Invest with your brain not your emotions.

What you should do is hold onto your money until you have enough knowledge to take the first steps. I think you'll have a feeling when you're ready. But like I said, brain not emotions. And answer those questions honestly (honestly with yourself more so than us) that MJ Truth asked.

Disclaimer: I'm not a financial planner or expert so don't take my word as the gospel.

 

[LiIZaneFan1978]

Yea you need steady income before you can do any of the things on your list

You should avoid credit cards at this point in your life, 18 yr olds generally lack the income and discipline to use credit to their advantage.

You don’t wanna be 22 tryin to rebuild your 450 score cuz you “made some mistakes” straight outta high school.

1. Steady income

2. Build credit

 

[Iceson Beckford]

How much money do you actually have now? What are your current living arrangements? Where do you work/what do you earn there?

You may be putting the cart before the horse right now.

I have about 200 arm and around 300 coming in. Living at home with family and I work at a cinema making around 300 a month(used to be a lot more but moved jobs and get less hours)

 

[Jimmy Two-Times™]

Credit is simply money in *your possession and stocks are your share of the total investment.

Google is your fwend.

 

[MJ Truth]

I have about 200 arm and around 300 coming in. Living at home with family and I work at a cinema making around 300 a month(used to be a lot more but moved jobs and get less hours)

Yeah, breh, no offense or anything, but you're not in a financial situation right now to be focused on investing or even building credit at this point. Get your income up first, focus on your education/personal development.

 

[WetinBeDat]

1. Read this book

2. Look into DRIPS (dividend re-investment plans)

 

[Iceson Beckford]

Yeah, breh, no offense or anything, but you're not in a financial situation right now to be focused on investing or even building credit at this point. Get your income up first, focus on your education/personal development.

No offence taken, I did ask for your advice so much appreciated

 

[Iceson Beckford]

Credit is simply money in *your possession and stocks are your share of the total investment.

Google is your fwend.

Google is my friend but google don’t explain and give advice like the coli does

 

[Pclarkrsa]

Bonds are investments in the US government, and are actually pretty easy, and pretty safe. That being the case, the return isn't huge. Low risk, low return (but that goes for everything when it comes to money). You don't have to have a lot of money, as the minimum amount for investment is $25. You DO have to have some time to set it and forget because it's a five year deal. Now you can withdraw early, after the first 12 months, but you'll pay a penalty fee for doing so. It's not much, but it's worth mentioning. To get started, head to treasurydirect.gov, get an account, and get to investing.

 

[Rusty$hackleford]

Bonds are also sold by private companies. Those vary in risk by their credit rating ie junk bonds.

The bond coupon is a percentage rate, the amount they pay the investor each year of the bond, typically split into two payments a year. Not all bonds have coupons.

Upon maturity of the bond, the par (face) value of the bond is paid back to the investor. Bond holders do not have to hold the bonds to maturity, they can sell them to other investors.

Bonds that are traded on the market (secondary) are sold at a discount or premium. That depends on the coupon (interest) rate fixed to the bond in relation to current rates offered on new bonds. Higher rates relative to rates on newly issued bonds would trade at a premium because the yield is higher. That would cause the investor to pay more than the par value of the bond. Conversely, investors would pay less, a discount, on bonds with rates lower than current issued bond rates because the yield is lower.
Interest income earned on munincipal bonds is tax free. Munis usually pay lower yields than taxable bonds. Interest (coupon) payments on taxable bonds are subject to income tax.

 

[Cynic]

Forget that. Right now you need to be developing your sales and marketing skills.

by the time a stock is public all the money will have been made anyway