10k to do something with...

[BlazingSaddles]

I am a college student, and for the most part the money in my bank is random "spending money" (food, clothes, small stuff). there is no way, in the near future, I am going to buy an item that is 2k, let alone 10. so what is the best thing I can do with it right now? I was looking at CD's, but unless I stick it in an account for 10 years, it doesn't look like a significant interest will build up. (If I put it in for a year, I'll make 100.)

anyway, I'm just up for any ideas... SHOULD I put it in a CD for 10 years? i'd rather not do anything that takes more than a few years....

 

[pulse8]

I need an upgrade.

 

[Ketteringo]

Go to mexico, buy lots of the good stuff, bring it back to the US (using whatever method you perfer), resell it and now have $50k to do something with

 

[DaveSimmons]

Put it in an INGDirect.com savings account if you might need any of it for expenses over the next few years, and keep a zero balance on all of your credit cards.

Or $3-4K in savings at ING and $6-7K at www.vanguard.com in a brokerage account and spend it on the safest stock-based investment, their VFINX S&P500 stock index fund.

I'm guessing you didn't have over $3K in earned income for 2003, so you can't put $3K of it into a Roth IRA at vanguard, so just set up a regular non-retirement account there.

 

[thawolfman]

Dave:

How would I go about setting up a Roth w/ Vanguard? Just curious as I've got money sitting in savings doing absolutely nothing and collecting no interest...

-Ben-

 

[CrazyDe1]

With 10k you could do a lot on ebay...I look at ebay not as buying and selling or work but as a quick way to invest money. I buy 10k worth of merchandise and resell it at 10% profit. Each month you do that and eventually your 10k is 30k over the course of a year....

 

[Eli]

If you're smart you won't be stupid and blow it.

Invest it wisely. You will thank yourself later.

 

[CTrain]

Should have put that 10K in a mutual fund a year ago, would have made around 20% profit easy.

 

[sygyzy]

Buy CD's at PenFed and early over 5% in 5 years.

 

[KLin]

If I were you, I'd put it in some kind of short term CD, then when you graduate and find a job, you have a nice down payment for a house.

 

[DaveSimmons]

Originally posted by: thawolfman
Dave:

How would I go about setting up a Roth w/ Vanguard? Just curious as I've got money sitting in savings doing absolutely nothing and collecting no interest...

-Ben-

Is this an existing Roth? Or is it new for 2003 earned income?

For existing, they should have info on their site about transferring an account to them from another company. The key part is the transfer (by check or wire) must be to Vanguard not to you. So if you did it by check, the check should be made out to Vanguard.

For starting an account for your 2003 contribution you'd just fill out forms and mail them a check.

If you aren't qualified to make a 2003 contribution (earned under $3K or over $100K) then you'd need to open a regualr, non-IRA brokerage account there.

Also, Vanguard is oriented towards buying and holding rather than making lots of stock trades, so if you want to trade a lot instead of just invest, then someone like AmeriTrade or ScottTrade is better.

 

[DaveSimmons]

Originally posted by: CrazyDe1
With 10k you could do a lot on ebay...I look at ebay not as buying and selling or work but as a quick way to invest money. I buy 10k worth of merchandise and resell it at 10% profit. Each month you do that and eventually your 10k is 30k over the course of a year....

Downside is your GPA plummets and you go crazy from dealing with all the stupid eBay buyers

 

[BlazingSaddles]

Originally posted by: DaveSimmons
Put it in an INGDirect.com savings account if you might need any of it for expenses over the next few years, and keep a zero balance on all of your credit cards.

Or $3-4K in savings at ING and $6-7K at www.vanguard.com in a brokerage account and spend it on the safest stock-based investment, their VFINX S&P500 stock index fund.

I'm guessing you didn't have over $3K in earned income for 2003, so you can't put $3K of it into a Roth IRA at vanguard, so just set up a regular non-retirement account there.

I was looking into ING. I am going to check out www.vanguard.com now and do my own research, but as i said, I am very uneducated when it comes to investing/savings, so i'll just ask now: what exactly is a brokerage account, and how much exactly will the "safest stock-based investment" earn me? Does that mean the higher the risk, the higher the interest/growth?

Originally posted by: CTrain
Should have put that 10K in a mutual fund a year ago, would have made around 20% profit easy.

i didn't have it a year ago. but is it possible to do it now? how do i go about doing this, or even researching this?

 

[thawolfman]

Dave has teh PM!

 

[DaveSimmons]

didn't have it a year ago. but is it possible to do it now? how do i go about doing this, or even researching this?

That's what I'm talking about doing at vanguard.com -- they are one of the most respected mutual fund companies, with their funds sold by most every brokerage, but if you buy their funds elsewhere you pay a trading fee just like buying a stock ($10-35+).

A brokerage account is sort of a checking account to buy stocks and mutual funds. You put money in, then buy whatever you want to, anything from shares of Disney to good investments like the VFINX mutual fund I recommendded.

VFINX is an index based mutual fund, which means instead of someone picking stocks, they just buy a "market basket" of the 500 stocks that make up the "S&P 500" index that you can see on the main page of CNN.com. Because they don't need to hire stock-pickers the annual fee for managing the mutual fund is much lower than other funds.

Historical return on the S&P 500 over decades is about 10% / year, but that is over decades not a promise of what you'll earn in any one year. You can lose money in the short term, like everyone did who bought shares just before the dot-com bubble burst.

"Actively managed" mutual funds mostly do worse than VFINX, which tells you that even professional stock pickers are, as a group, not very good at it. With actiively managed funds you might do much better than VFINX but you might also do much worse.

 

[SirStev0]

cd's are helpful and just think then you can go to mexico with much much more

 

[BlazingSaddles]

^

 

[apac]

Correct me if I'm wrong, but aren't there short term CDs that are 1 or 2 years?

Otherwise I'd say mutual funds are a pretty good investment. My parents have some money in Vanguard.

 

[Flyermax2k3]

If I had that kind of money I would pay off my debts. No point in investing if you've got debts you can pay off now. That's my philosophy, anyway.

 

[slydecix]

I'd put 6000 into an index fund, like the Nasdaq 100 (symbol QQQ), 3000 into an ING Direct Orange Money Market savings account, and leave the rest in your bank

This would be moderately aggressive, so if you wanted to play it safer, you could do 3000 into an index fund and 6000 into a money market account

 

[xSauronx]

2 chicks at the same time man

 

[Warthog912]

Originally posted by: xSauronx
2 chicks at the same time man

 

[StageLeft]

Originally posted by: Elitebull
I'd put 6000 into an index fund, like the Nasdaq 100 (symbol QQQ), 3000 into an ING Direct Orange Money Market savings account, and leave the rest in your bank

This would be moderately aggressive, so if you wanted to play it safer, you could do 3000 into an index fund and 6000 into a money market account

I agree.