How much starting capital would you say a person needs in order to comfortably start investing in penny stocks? I mean, in order to not have to worry about losing all you have in the span of a couple of months
I'd start investing with as little as $250-500, and add to it as much as you can every time you get paid. As for penny stocks themselves as possible suitable investments...
I'd say it depends on each person. I mean, I can afford to start with a bit more than you may be able to for example, so I can't give you an all round exact figure. You're going to have to think 'How much money do I have free at the end of the month?' Then decide whether you want to try making money off of the money you usually buy a few games with, or if you want to just have a short time enjoyment of a game or a movie.
It's definitely more interesting to get my money to work for me My question was in the sense that for example, let's say someone has 50$ at the end of the month, it wouldn't be very wise to put that money into penny stocks as it probably wouldn't be worth it, right?
I'd definitely invest it in something if you don't need it. IRA, 401k, whatever. Even $50 a month invested at 12% over 30 years = $160k or so.
That's true, even a little amount put aside every month or whenever possible adds up to a lot in the long run, especially if you manage to invest it wisely and with some luck you can make a small fortune even with a low investment.
What's the wiser investment though? Would you guys put his hypothetical $50 a month in an IRA/401k/etc, or on some penny stocks?
Neither are going to be incredibly lucrative. IRA/401k/etc are sort of "boring" investments. If you're looking to have fun with the $50 and don't expect to get rich, then penny stocks might be a way to go.
A little invested wisely will likely eventually become much more than a little. And if it's added to frequently at regular intervals it will become a lot. If you're already putting $500-$1000 a month into wise, sound investments within IRAs, 401k, etc, I'd say go ahead and have fun with that $50 on the side in a discount brokerage account if you're so inclined - maybe you'll have good luck speculating with that extra little bit. It's certainly better than blowing that $50 at the casino or whatever. But if the $50 a month is all you can invest for the time being, I'd be much more serious with that $50.
