I have 8k in my savings..?

Question

and roughly 500 dollars in emergency/bill money in a checking account(i know no interest but its a small amount not accruing without the ties of an interest earning checking account) and college is costing me about 6k a year, so I will be in debt about 24k when i get out of college, but that's not for another 4 years... i have an monthly automatic deposit in a taxable interest bearing brokerage account now...

Should I purchase individual stock, or invest in a low expense, small cap or mid cap value fund? maybe 2? I have pretty high risk tolerance but i do worry about the market right now...

Answer 1

I have to be honest with you, I am also a college student and I don't have a lot of experience, however I have done a lot of research on different methods of investing.

There are a few options.

One is a good mutual fund.
Another attractive option that began to look into is investing in tax leins certificates. I stopped because I found out that my state no longer makes it legal. Some states don't do this. Some even make it illegal, but if you are living in a state that does, this is great. There's not a lot of info on it because stock brokers and bankers aren't allowed to make commission on them, so they won't guide a lot of people through the process as they have no incentive to... But you can generally earn 16 or 18% and it's a completely investement. It's government back, and you're gaurenteed your money back and the high interest attached to it. It's kind of difficult for me to explain since I don't know a lot on it, but basically you pay for someone else's property tax and the government gives you the right to receive all the tax money due, including fees, interest, and penalites... high interest is charged to make sure the tax payers do what they have to to pay off the taxes quickly.

The final, is real estate. buy a house, find a relative to help fund you if possible. Then get some buddies to room with you and pay you rent. During the summer put some ads in the paper, do a background check and find a tenant or two. You're probably going to save money for housing then you would living in an apartement or campus. Then during the summer you can get rent money which will probably earn you some money. After you graduate you can try to sell, or keep renting it out.
The rent money will make you enough to cover the monthly cost of a house and then some. Eventually you can sell the house and it should go up in value.

Another option, if you can scope out the real estate really well and take a lot of time and even get a deal in place, is to find the investement, make some rough estimation on the projections, and find someone (or even a few people) to fund 100% of the investment for you. You will then grant them 90% of the profit (to split if multiple investors), but for doing a little research you will own 10% of the real estate. You're going to have to do a lot of work to find the investor(s), but there should be a lot of people out there that have money waiting to invest in something, but are too busy to thouroughly research the best option.
You might have to cold call a lot of people. But if you go through enough people you will find someone who's willing to look at your offer. There's a great article on this concept at millionairegift.com.


Another real estate option is to look for foreclosures and post-foreclosures (bank owned, known as REO). The bank owned property are the best and easiest. These are houses that were up for a foreclosure auction but didn't receive a bid and are now property of the bank. You will get it basically as cheap as possible this way. You must research to make sure that this has secure foundation and has value.

phew, hope that helps you get some ideas

Answer 2

First move it out of the regular local savings into an
http://www.emigrant-direct.com
savings account first (Suzy Orman recommends them)
I have one, it's linked to my local checking, I go on line and move money back and forth.

It earns a little over 5%. That is the least you should do, CDs are OK but they are going to be close to the emigrant direct return but without the flexibility. Still 5% is just going to beat inflation but with a regular savings you are losing to inflation big time.

4 years is not a lot of time in terms of the stock market, probably not recommended. You need to talk to a pro.

Not a recommendation, just an example of what I do, but I'm in it for the long run.
I DRIP some stocks (XOM,WTR,PNY and JNJ) I buy the direct with out a broker at www-us.computershare.com. (PNY i had to write to directly)
I picked these because:
1 Low starting amount.
2 only real fee is to sell, $15 (cheap) for most (JNJ has a $1 fee to reinvest)
3 Three have paid a dividend for a long time (8 years or better) with out missing one
4 Can buy stock all the time in various amounts and set up auto purchases monthly.

Answer 3

If you are depending on your savings to assist with college expenses, then I wouldn't invest in the stock market in individual stocks.

I would look for a higher interest bearing money market account. Many banks offer this thru their investment arms - the account is not FDIC insured, but you are less likely to lose money there than in the stock market. I have a MMA thru Capital One and it is paying anywhere from 3.5 -4.7% - the rate does change on a daily basis.

Good Luck!

Answer 4

Ask yourself if the degree you'll obtain will help you pay off your college.
"Investing" may as well be taken as a gamble. There are no certainties in it (Unless we're talking grade A stock) and there's a risk involved. Not to mention that your education has higher chances of being paid off from your future earnings rather than from the meager profit from stocks or bonds.

Answer 5

I'd get the BEST CDs I could find- & sit on them for a few years. I have a bad feeling this is NOT a time to take on alot of risk- not with our current political or Iraq situation the way it is. BOTH are threatening to worsen- & the Market will NOT like the coming Uncertainty...

Answer 6

I'd suggest asking a financial planner. Many of them (like from Ameriprise, part of American Express) do not charge for initial consultations, and will even tell you whether they think it's worth your while to pay for additional sessions.

Answer 7

Maybe you should talk to one of the deans or faculty of the Business department at your college... they might be better equipped to answer your question of what to do with your money!

Answer 8

wat does 8k mean what is that