Hello, I'm a college student, however, I have some extra money from my summer job this year and was wondering what the posters on this board thought about investing in college? I am looking for something more than just the average saving account as I am trying to look forward to the future whilst I have some extra cash now. Any opinions are appreciated.
I'm far from a financial wizard, but I do know that if you plan to stay in an area for more than say 3 or 4 years its probably a good idea to purchase a house. It sounds like a big deal, but if you haven't owned one yet, there are benefits to you that you can look into, the down payment on some places plus what you get for being a first time home owner makes buying a house and paying a mortgage much smarter than renting, considering what you will save on dorm fees/renting its a smart move. Especially if you get a duplex, or get a roommate who can split the mortgage with you (ie, they pay you rent, but you own the house) by the time 5 years or so rolls around you'll have saved quite a bit just based on not paying as much in rent/dorm fees not to mention the equity you will have built up.
Nothing personal, but that's terrible advice, given that he probably doesn't have the money for a down payment, or the income necessary to cover a mortgage or the maintainance costs that come with renting a house to college-age kids. Striker, find a high-quality mutual fund (perhaps from the Vanguard family) and put your money in there. Let it grow over time and add to it when you can. Sachin
This is the correct advice. You may want to do this under an IRA (traditional or Roth) depending upon what your goals are for this money. If you are saving for an eventual house downpayment, then get a mutual fund outside of an ira, if you are saving for retirement (you simply can not start too early for that), get one in an IRA. Do not try and purchase a house at your age. Sachin brought up some of the reason why you shouldn't and there are many more. Andy
Thanks all for the advice; speaking of a mutual fund, you mentioned a Vanguard fund. I looked (looked, well glanced is the better term) at their website, and I saw that 3k is about the lowest amount you can put into one. Is this true or would it be possible to put.. say 1-2k?
I agree with the previous posts about not buying a home. That would be an incredibly risky situation, especially in light of the limited resources. While investing can be exciting and educational, I would be prudent and develop a comprehensive financial plan, not just randomly invest. I would suggest saving at least 3 months expenses in a money market account. After that, you should invest in Exchange Traded Funds (ETF). There will be no minimums, just the commission charge of making the trade on an online brokerage.
You should be able to start with $50 with some funds. I invested with American Century when I was in college and that is all I started with.
If you go to Yahoo Finance or MSN Money (Sachin's financial portal of choice), you can run a Fund Screener that will help you find funds that you will be able to invest in. American Funds is another good family as well. Congrats on making a good financial decision in college. I would have blown all the money on booze. Sachin
I'm gonna do some research on this in the coming days to see whats what. Keeper adding stuff if anyone comes up with anything. Oh and don't get me wrong, there will be; just plan on putting some away first and then going to study the finer things.
Actually, I think he should consider making slightly worse financial decisions. I'm all for saving--my wife and I save a lot--but college should be enjoyed more than that. Maybe put it in a savings account or some CDs. If you've got extra money by the end of your four years, spend a summer tramping around Europe. That will be 1000 times more rewarding and memorable than having a few hundred dollars in stocks. You've got the rest of your life to sock away money.
I plan on doing all that, don't let me get you wrong I am no prude; End of the summer I'll have 5k or so saved up and was planning on travelling to Europe next summer to watch the WC (albiet in pubs....) so I will, hopefully if all goes well, have a bit left over to stash, whilst I take some for the classic partying, etc.
Well, he asked and I answered... as for the money... he said investing as opposed to saving, I figured he had a few thousand... I also don't know sh1t about stocks, or mutual, I do know that no fraud is going to piss away your money if you buy a house with it though. As for maintaince costs... its been awhile since you were at college hasn't it? maintaince... you could rent a fairly large cardboard box to most college students if they can play their music loud and fit a couch into it. Anyway... no animosity here, I'm very young myself and I'd like here what you guys have to say about investment too.
Here a suggestion on how to get started: http://moneycentral.msn.com/content/Investing/Startinvesting/P117785.asp Sachin
I'm thinking of looking at some ETFs as suggested in that last article among other things. But where, in you all's opinions, is the best place to buy into these? Brokerages or online brokerages? And if so which one?