I am 20, in the Army, and going overseas soon. How can I invest the money I make over there wisely?

Question

I have never invested, know nothing about the stock market, and don't want to tie my money up in long-term CD's. I want my money to work for me like all the commercials say! :) What can I do??! Please help!

Answer 1

Hey. Great idea starting early to save.

I could give you all kinds of detailed advice, but chances are you're still in the early stages of accumulating money, so most of it is premature. After you get back, if you've been able to save a bunch, we can talk more. For now, probably the best thing will be to pick a simple mutual fund (no-load, preferably), and just plunk all your money in there. Mutual funds are pretty boring, but that's probably for the best if you're going to be where you can't monitor things. Just find a relatively stable growth fund and arrange to have a regular deduction put into it. That's really all you need to think about until you hit $20-30,000. Do take a couple of good investing books with you, however, cuz the education you get about investing will be immensely important to you when you get back. I recommend Peter Lynch, Benjamin Graham, and Jeremy Siegel as the best writers to learn from.

Best of luck to you.

Answer 2

The first question I would ask you is, when will you need this money? If less then 3-5 years, don't bother with the stock market. Invest in a more secured investment like CD's, bonds, or money market accounts. You said you don't like CD's because of their long-term tie up of your money. You can get CD's anywhere from 3 mon.- 5 years. So, they aren't that bad.

However, if your looking strictly short term, maybe a 1 or 2 then I would check out ING Direct's Orange Savings Account. Its currently up to 4.35% APY (it is variable but interest rates are rising). No minimum, no fees, and its linked to your checking account so you just withdraw your money online and its in your checking account in 2 days. They are FDIC insured and the interest compounds monthly not annualy like a CD so 4.35% APY is better than a 5% CD.

Check it out, one of the largest banks in the world and it acts like a regular savings account but with much much higher interest than your neighborhood bank.
http://home.ingdirect.com/products/products.asp?s=OrangeSavingsAccount

Answer 3

Life starts with the necessities so save money to buy without credit. Cash will get you freedom. Then learn to use cash wisely. A good buy will save you thousands if you study it out. Time to invest when you have a place to live and a job. Start simple with a small interest on saved money but lots of flexibility for access to spend it. Build up from there. Avoid the biggest loss of a lifetime finances the Divorce.

Answer 4

If you are going to Iraq you should give your mother or father power of attorney so they can manage your funds on your behalf.
I doubt you will have any time to invest once your there.

They only allow you 200 bucks per month over there so you will need all of that for you.
Also if your going to Iraq there won't be any girls or beer,the Military won't allow it out of respect for there religion an the only girls you may see are some hardcore marine type Japaneese chicks.
Invest in some nose plugs ...these whole place smells like a petting zoo.
Thanks for your efforts over ther and good luck
You should get married before you go you will triple your money.

Answer 5

I am a reservist currently stationed in Afghanistan. In the civilian world I am a financial advisor. You've received some good responses to your question. (And some not so good responses) It's great that you are thinking about investing at such an early age. I first started investing myself when I deployed to Iraq for the first Gulf War in 1991.

I would first recommend that if you have any unsecured debt such as credit cards, put paying this off as your first priority. The average credit card rate is about 20% so if you were to get rid of that kind of debt you would save yourself 20% right away.

The next priority would be to establish some cash reserves for emergency situations. I would recommend 3-4 months of your fixed living expenses. (ie. Rent, car payment, credit card payments, food) Obviously your fixed living expenses are going to be slim while you're deployed so use the figures for when you are at home.

Now that you've taken care of those first 2 priorities you are ready to do some saving/investing with any disposable income that you might have. You now want to think about the time frame for each of your goals. If you want to save for a house or car in the next 1 - 3 years, you will want to stick to investments that have no risk to your principal. Money markets, CD, US Govt Savings Bonds would fit into that category. (The rate that you should expect for this type of investment would be about 4 -5 percent)
For goals farther out such as retirement, time is your best friend. Over time you are exposed to more risk in things such as CD's and money markets because of inflation and taxes than you are in stocks. My recommendation here is that you invest only in growth mutual funds. You would need hundreds of thousands of dollars to have a well diversified individual stock portfolio. You have 3 options that make a lot of sense along these lines. The first option that you would want to consider is the Army's Thrift Savings Plan. This is the government's version of a 401k retirement plan. You have your choice of 5 mutual funds that range from conservative to moderately aggresive. You would set this up with your finance office or go to www.tsp.gov
The next option would be the Combat zone savings deposit program. This is a program run by the government and allows you to save up to $10000 in a savings account while you are in the combat zone. The government will pay you 10% for however long you are in the combat zone. You would also set this up with your finance office. The third option would be to establish a Roth IRA. You can save up to $4000 per year and under current tax law it will grow tax free. You would set this up directly with a mutual fund company such as Vanguard or Janus. There should be no up front charge for this at all. I don't believe that you need the services of a financial advisor at this point in your life. Get online and do a little research into some of the things that I talked about. If you have questions feel free to drop me an email.

Answer 6

That can be risky even when you can keep an eye on it daily. But if you are going to Iraq and can't keep an eye on your money this may not be the best idea right now. Does the military offer financial services for this? A high yield CD may be a good idea for now. If you don't have somebody on the outside you can trust this may be the best idea. Good luck brother and thank you for serving our country.

Answer 7

Open a brokerage account and have your broker invest your money evenly among three stocks, the symbols of which are ISBH, ACMG and CTUM. If you do so, in about five years, you'll never have to work again.

Answer 8

Stick it in a high-interest savings account (or have your pay paid directly into one)..... and also set up an account at http://www.sharebuilder.com - I think you can set it up to invest automatically for you, if so set it up to stick a fraction of your pay (say, $50 a month) on a carefully chosen stock that pays dividend.
I'd suggest:
Anheuser-Busch (BUD)
Walmart (WMT)
http://www.fool.co.uk/news/Comment/2006/c060404d.htm
and perhaps
Great Northern Iron Ore (GNI) http://moneycentral.msn.com/content/Investing/Findhotstocks/P90537.asp

For more great help, check out this leading financial education website:
http://www.fool.com/investing.htm

Answer 9

As a Vietnam Veteran, let me personally thank you for your service. You should have access to a career councilor, perhaps they can help you. Someone in your Unit that you can trust should be able to advise you wisely. I bet your CO would be glad to help. Go with God.

Answer 10

i favor i did. ive had a 401K for over 5 years and in basic terms in the most suitable 3 have even discovered what the hell it even is. i in simple terms enable the funding organisation distribute my stocks for me considering im entirely ignorant to the total procedure. lately anybody in the workplace is scared to seem at theirs, so i in simple terms keep on with healthful. "you're youthful and existence is lengthy and there is time to kill in the present day"