I am going to be getting a student loan check next month. But i want to invest most of it.
I was thinking of buying a bunch of short term CDs that would mature every month or so to give me money for that month.
is that a good plan? Is there a better way to handle it?
2006-07-07 08:23:56 · 26 answers · asked by BigD 6 in Business & Finance ➔ Investing
The EXTRA money - beyond tuition
god - do i have spell it out
2006-07-07 08:27:18 · update #1
You people aren't getting it
I have to take extra loans for living expenses for the year
but i pay rent every month, not all at once for the year. instead of that money sitting in my savings account i feel that it should be getting some return to balance out the interest i am paying.
so if i draw a CD every month, it would be like getting a piece of the loan as i need it and not all up front.
2006-07-07 08:30:22 · update #2
Cd's are the surest way to go, provided you can ladder them so that money will mature on time to pay for your next educational tab. www.bankrate.com is one of the best sites to find out about CD rates. Just follow the tabs.
You are smart to think of something besides just letting it sit in savings. I'm assuming that all the money (eventually) will be used for your education. Use the interest as well for your education. Good Luck!
2006-07-07 08:30:47 · answer #1 · answered by mickeymouse 2 · 2⤊ 0⤋
Can your lender dole out the loan proceeds on a monthly basis so you're not paying interest on it?
If you're getting it all up front, ask your landlord if he will take a slightly reduced amount up front for the rent for the whole school year. Say a 6-7% reduction of the total amount might be reasonable. That's a better rate than you can get on short-term retail CD's. I just checked that with the guy who sits across from me who sells them all day. The other expenses, food, living expenses, etc., could be deposited into a student savings account and then withdrawn when you need it. Discipline is the key word here. Check with the local banks to find one that does not charge you fees to open and maintain a student savings account with small balances. The fees can eat up your savings quickly and must be avoided. A part-time job helps in this regard, too.
2006-07-07 08:46:01 · answer #2 · answered by cjones1303 4 · 0⤊ 0⤋
First of all, student loan money must be used to pay for educational expenses such as tuition, room & board, books, etc. If you're getting more money than you need, then I would definitely suggest putting it into something that's absolutely safe!
The last thing you want is to put that money into stocks, the stock falls, and you don't have enough to repay the loan. What's the safest investment of all? Treasuries and CDs. If you go the Treasury route, I would suggest T-bills, which have maturities up to 1 year.
Bottom-line, put that money into something that's 100% safe. But honestly, you won't make all that much with short-term investments, so you probably won't earn enough in interest to pay rent, but you'll make something.
2006-07-07 21:06:33 · answer #3 · answered by msoexpert 6 · 0⤊ 0⤋
You will have to pay back your loans after school w/ Interest, if you don't need the money Decline it!
You are allowed to take out an extra amount for "living expanses" or books but trust me it's not a good idea to take out any more than you absolutely need.
If you need any money beyond tuition and a few hundred for books, get a job!
Good Luck, and I'm not sure about the legality of what you are suggesting so watch out...tax time will come and you will have to explain where this extra money came from.
2006-07-07 08:32:36 · answer #4 · answered by az 5 · 0⤊ 0⤋
The timing is so short in your investment your best bet is to just keep in your savings account. You can move it to a CD but will have to pay a surcharge and will cause yourself some extra work and lock up your money for very little return.
2006-07-07 08:26:10 · answer #5 · answered by Robert 2 · 0⤊ 0⤋
Real Estate
By the time you get out of school, the money that you borrowed would be worth less.
Buy anything, a little condo that you can share with roommates, or land in Arizona or Utah or even better, land in Mexico.
I bought land in Baja in late 2003 for 10 grand and so far its value is 40,000. You gotta be careful where you buy though, study the market, do your homework.
2006-07-07 08:32:08 · answer #6 · answered by Anonymous · 0⤊ 0⤋
Cd's are paying the most intrest. The term can range from 1 month to 5 yrs
2006-07-07 08:27:43 · answer #7 · answered by mrshunter_2002 5 · 0⤊ 0⤋
Possible, but unlikely and very risky. You could lose just as much as you could make. In addition, I think gold is way over priced and overdue for a fall. If I had the guts I would bet on gold going down. The problem is that bubbles can go a lot higher before they pop. But I certainly would not buy especially not with borrowed money.
2016-03-27 08:12:57 · answer #8 · answered by Megan 4 · 0⤊ 0⤋
I think CD's are a great short term risk free investment. Especially for someone without a lot of experience. Visit the site below as it's a national site and very well respected.
http://www.bankrate.com/brm/rate/deposits_home.asp
2006-07-07 08:26:58 · answer #9 · answered by indystoprealtor 3 · 0⤊ 0⤋
If you don't need the money than you shouldn't take out the loans.
You're going to have to pay for it later on and in a big way.
If you can afford to simply invest your student loan money then you don't need it- period.
2006-07-07 08:27:08 · answer #10 · answered by Venuscarroll 2 · 0⤊ 0⤋