Last week, Warren Buffett said, "My wealth has come from a combination of living in America, some lucky genes, and compound interest."Since you're young, presumably American, and lucky enough to have a stable income, my only advice is: Don't forget the secret weapon of compound interest. Work like a machine. Save like an animal. Whatever material luxuries you're forgoing today are probably trivial to the wealth you'll accumulate by starting young. You won't regret it.
When you're young with a long time horizon, focus on investments with staying power. My favorite company for a long, long-term perspective is probably Costco (Nasdaq: COST). There aren't many companies as profitable and encased in a milewide moat as Costco. Its membership-based business model makes its competitors' barriers to entry pretty thick. You can be fairly assured it'll still dominate its market space 10, 20, and 30 years from now.
The sweet smell of success
Two stocks worth looking at are Mosaic (NYSE: MOS) and Agrium (NYSE: AGU). Both are fertilizer companies well-positioned to benefit from the increasingly important problem of producing food for a growing global population. True, both of them have suffered recently from temporary earnings setbacks and uncertainties about their immediate future. But long-run trends are incredibly supportive for their businesses, and even a modest recovery in earnings could send shares soaring higher.
Go with Goo
The best way to get started investing? Just start investing. Buy some stocks. Dollar-cost average into a small portfolio with very low transaction fees. And most importantly, don't buy anything complicated.
The best way to get started investing? Just start investing. Buy some stocks. Dollar-cost average into a small portfolio with very low transaction fees. And most importantly, don't buy anything complicated.
On this last point, I recommend Google (Nasdaq: GOOG). Everyone knows the business, and most of us use its search engine daily. In that sense, it would be like buying shares ofMcDonald's (NYSE: MCD) or Coca-Cola (NYSE: KO); you know and use the products, and the chances of the stock going to zero are, well, close to zero.But Google also has the advantage of growth. Unlike cloud computing, cheeseburgers and soda aren't new. And The Big G is a big-time innovator on the Web. Google Apps is challenging Microsoft's (Nasdaq: MSFT) Office, and Google TV could forever change broadcast advertising.
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