(Bloomberg Businessweek) — It seems like everybody wants to move to Monaco right now—everybody who is super rich, that is.

How would you advise a 17-year-old interested in the world of investment? Which books would you suggest that I read? Do you have any tips? Who are you investing in?

At 17, I’d likely:

Build a Rainy Day Fund
Take a few months of income and stash it in a rainy day fund.  Most 17 year olds still have family to fall back on if really bad things happen so you probably don’t need a full 3 – 6 months of living expenses set aside just yet.

Invest the Rest in Stocks
Invest it in a broadly diversified, low expense stock fund like SPY or VTI.  Two years of savings for a part time job is likely in the $10k – $50k range so I’d suggest investing it slowly, every month, in $1000 to $2000 chunks for three reasons:

  1. it will get you into the habit of regular investing
  2. it will spread out your risk of buying in at a bad time in the market
  3. the chunks are still big enough to keep your trading fees under 1% with most discount brokerages


Get an account at a low fee broker like Scottrade, Etrade, or similar, send them all the money, and then click the buy button every month.

I advocate stocks as opposed to real estate because it’s easier to invest smaller amounts, and you can build the regular habit of monthly investing.

I advocate stocks over most everything else because your time horizon is likely 20 to 40 years.  With time horizons that long, it’s very hard to beat the investment returns of stocks with anything else (like bonds, gold, Bitcoin, pork bellies, and most other things you could buy and hold).

Read Like Crazy
The fact that you’re asking the question indicates you’re interested in investing.  Feed the interest!  I would NOT start with something beefy like The Intelligent Investor.  It’s a great book, but not for someone that’s just getting started.  To start, I’d turn to books like The Millionaire Next Door and Rich Dad Poor Dad.  Both give good foundations on how to think about investing.

Once a particular type of investing catches your eye, dig in.  Want to own rental property?  Landlording and The Unofficial Guide to Real Estate Investing.  Buying individual companies?  Now try The Intelligent Investor.  Interested in a startup? The Lean Startup has you covered.

Once you get on the path to investing, there’s no end to the diversity of interesting things to invest in, and good material you can put in your head.