Re: Starting Out
Open a Roth IRA. Contributions to a Roth IRA are made after tax, but earnings in the account grow tax free. Earnings cannot be withdrawn until you are 59 without penalty, but you can withdraw your CONTRIBUTIONS at any time penalty free. You can also withdraw money for certain expenses like education and a down payment for a house. However, because of the tremendous tax advantages, you should probably view it as a retirement account and leave as much money in there as possible.
The contributions limits for the Roth IRA are $3000 for 2004 and $4000 for 2005. You have until April 2005 to make the contributions for 2004. You can open one at most brokerages.
Another thing... at $250 per transaction, it is very difficult to outperform the market purchasing stocks when taking transaction fees into account. If it costs $10 to buy and $10 to sell, that is already a signicant percentage of your capital that you need to make up for. Investing that amount of money, I would consider purchasing no-load index funds. This has the added benefit of diversifying your portfolio as well. Look for funds with low expense ratios such as Vanguard. If you insist on investing in stocks, consider saving up more capital and purchasing in blocks of $1000 or more.
I would be very conservative about what you invest your money in right now. FWIW I think Berkshire Hathaway is a fine investment.
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