How Should I Invest?

So after a few months of hard work completing referral sites I have amassed a little over $4,000. Now I have nothing that I need to spend this on for awhile. What or where can I invest this to make some money in 6-12 months?

- My bank offers 2.47% APY interest which comes to $8 a month

- My bank offers 6 months CD for 3.47% which equals about $12 a month

- My PayPal Money Market account offers 5.04% which is about $19 a month

Any other suggestions?

dont hold 4k in your paypal account thats for sure.

stick it in an ira and save for your retirement or stocks and/or mutual funds

Yeah, I'd suggest starting a Roth IRA and letting that money work for you for the next 40 years.

Plus, if your income is low enough (mine barely was, because I didn't get my big promotion until December), you may be eligible for a credit of 10%, on retirement savings up to $2000. So, you'd be looking at getting $200 back right there.

If you want to play safe and not worry about losing it. INGDIRECT pays 4.25% and I can give you a referral link and you'll get like $20 or $25 and I'll get like $5 or something. I forget exactly.

[quote77b7db008d="coolvaughan"]So after a few months of hard work completing referral sites I have amassed a little over $4,000. Now I have nothing that I need to spend this on for awhile. What or where can I invest this to make some money in 6-12 months?

- My bank offers 2.47% APY interest which comes to $8 a month

- My bank offers 6 months CD for 3.47% which equals about $12 a month

- My PayPal Money Market account offers 5.04% which is about $19 a month

Any other suggestions?[/quote77b7db008d]

You've have some good info there but the important thing to think about is...are you going to need all of the money in 6-12 months, some of it, or none of it. If you don't need to spend it and want to start saving for something down the road it would probably make sense to start a mutual fund portfolio.

I do this stuff at work all day long, so feel free to pm me with your questions.

I think you guys have the right idea with the IRA but if you are young and not sure when you are going to need the money, it makes more sense to have some liquidity and just put the money in a mutual fund(s).

Right now I'm automatically contributing equal amounts to money market and IRA, and I'm manually sending more to the money market as I have the extra to spare

I would love to invest in the stock market or an IRA or something. But alas, I am a poor college student that doesn't know when I will end up needing the money. Could end up not needing it for 2 years, could need it in 2 months. You know how stuff comes up.

[quoteb83be3dcdc="stueybaby17"]I would love to invest in the stock market or an IRA or something. But alas, I am a poor college student that doesn't know when I will end up needing the money. Could end up not needing it for 2 years, could need it in 2 months. You know how stuff comes up.[/quoteb83be3dcdc]

Understandable - ING is a safe bet that earns respectable interest...if you wanted to put a little effort up you can find some stock investments where you risk and your ability to have quick access to the cash are pretty manageable.

Back in the day buying/selling stocks was a chore because it took place over the phone and involved checks having to be printed/mailed. Now I could sell a stock in the morning from my online broker, have the cash in my account as soon as the trade clears, transfer the cash to my checking account within 2 days, and have physically have the money out of atm at the point. Pretty quick in my opinion.

stock tip

sppi

[quotec553e6c744="mcal44"][quotec553e6c744="stueybaby17"]I would love to invest in the stock market or an IRA or something. But alas, I am a poor college student that doesn't know when I will end up needing the money. Could end up not needing it for 2 years, could need it in 2 months. You know how stuff comes up.[/quotec553e6c744]

Understandable - ING is a safe bet that earns respectable interest...if you wanted to put a little effort up you can find some stock investments where you risk and your ability to have quick access to the cash are pretty manageable.

Back in the day buying/selling stocks was a chore because it took place over the phone and involved checks having to be printed/mailed. Now I could sell a stock in the morning from my online broker, have the cash in my account as soon as the trade clears, transfer the cash to my checking account within 2 days, and have physically have the money out of atm at the point. Pretty quick in my opinion.[/quotec553e6c744]

Where would you recommend doing trading? I don't wanna pay much money for a trade or to be a member of a certain company.

Do stock trades get taxed?

Like what is the difference between an IRA and a regular old Individual Account?

stocks? no, unless you follow them, you'll waste your money if you follow stock tips.

Either put it in a 6 or 12 month CD, and roll it over as need-be, or pick an ING or Immigrant savings account and put it in there. Incidentally, there's nothing to be worried about leaving your money in your paypal account, so long as you won't be tempted to spend it. One of the nice things about ING or Immigrant is that it's a little difficult to get money out (as in there aren't ING ATMs on the corner) so you're more likely to save the money.

If you're young and don't know when you'll need the money, but will need it, don't open an IRA, there are penalties for withdrawal.

I would invest however much you KNOW you won't need for 6 months, or a year, and shop around the various banks to find a good rate for a CD.

I put $2000 in a...5.45% or something around there 12-month CD last July.

CDs are good because they offer the higher interest rate, but make sure you won't need the money for 6 months or however long it is.

[quote6075846137="doylnea"]stocks? no, unless you follow them, you'll waste your money if you follow stock tips.

Either put it in a 6 or 12 month CD, and roll it over as need-be, or pick an ING or Immigrant savings account and put it in there. Incidentally, there's nothing to be worried about leaving your money in your paypal account, so long as you won't be tempted to spend it. One of the nice things about ING or Immigrant is that it's a little difficult to get money out (as in there aren't ING ATMs on the corner) so you're more likely to save the money.

If you're young and don't know when you'll need the money, but will need it, don't open an IRA, there are penalties for withdrawal.[/quote6075846137]

I agree with your IRA comment, but not completely with the stock comment. "Hot tips" are of course a waste, but that being said I don't think novice investors have to be afraid of investing in stocks - either in an individual company or a mutual fund.

1. A very minimal amount of research can lead you too a stock that pays a decent dividend and has tolerable risk.

2. A mutual fund is an even better choice because the fund manager is doing the work - you still have to pick a good fund to put your money in, but the risk factor of picking a bad fund is less then picking a bad stock.

I'm advocating buy and hold here, not day trading - just don't think you have to settle on the so so returns of those High Yield Savings Accounts!

I believe a 12 month CD or if you want easy access to it ING is definitely the way to go. That's where I got all my freebie money sitting.

Look towards emerging markets, perhaps China is a good start.

Your safest bet would be through mutual funds, especially at an early age with such little $$$

look into 401k and 403 def mutual funds is easiest way to make a lot of money

http//www.youtube.com/watch?v=Ct5MrlicsAc

End of story.

(by the way, I invested $2000 into stocks on Feb 12, and $2000 about 3 weeks later...$4000 invested....my portfolio is valued at $5,150~ today.)

[quote83ce30590d="FreeOffersNow"](by the way, I invested $2000 into stocks on Feb 12, and $2000 about 3 weeks later...$4000 invested....my portfolio is valued at $5,150~ today.)[/quote83ce30590d]

How did you invest in these stocks, online or what?

[quote1c44f695e3="mcal44"][quote1c44f695e3="doylnea"]stocks? no, unless you follow them, you'll waste your money if you follow stock tips.

Either put it in a 6 or 12 month CD, and roll it over as need-be, or pick an ING or Immigrant savings account and put it in there. Incidentally, there's nothing to be worried about leaving your money in your paypal account, so long as you won't be tempted to spend it. One of the nice things about ING or Immigrant is that it's a little difficult to get money out (as in there aren't ING ATMs on the corner) so you're more likely to save the money.

If you're young and don't know when you'll need the money, but will need it, don't open an IRA, there are penalties for withdrawal.[/quote1c44f695e3]

I agree with your IRA comment, but not completely with the stock comment. "Hot tips" are of course a waste, but that being said I don't think novice investors have to be afraid of investing in stocks - either in an individual company or a mutual fund.

1. A very minimal amount of research can lead you too a stock that pays a decent dividend and has tolerable risk.

2. A mutual fund is an even better choice because the fund manager is doing the work - you still have to pick a good fund to put your money in, but the risk factor of picking a bad fund is less then picking a bad stock.

I'm advocating buy and hold here, not day trading - just don't think you have to settle on the so so returns of those High Yield Savings Accounts![/quote1c44f695e3]

I agree with what you've written about stocks / mutual funds. However, I should have explained my comment further. The easiest way, it seems to me, to make some decent money, without very much research is either a HYSA or CD. You can call your local bank, or look online for 5 minutes and have picked a CD that will get you ~5% all day long. Mutual Funds require time to pick the fund, read the prospectus, research the manager etc - all things that a novice investor likely isn't interested in doing.

I started investing with small 6 months CDs 15 years ago when I put my caddying money into one and rolled it over. Today I have several mutual funds, several retirement accounts, and a few select long term stocks.

To me though, the most important thing is starting early with investing, and having the foresight and wherewithal to put money away, leave it alone and appreciate the TVOM.

[quote1e8f2a2e9c="doylnea"]
To me though, the most important thing is starting early with investing, and having the foresight and wherewithal to put money away, leave it alone and appreciate the TVOM.[/quote1e8f2a2e9c]

Well Said - it is all about the time vale of money.

[quote0035bd2dbf="coolvaughan"][quote0035bd2dbf="FreeOffersNow"](by the way, I invested $2000 into stocks on Feb 12, and $2000 about 3 weeks later...$4000 invested....my portfolio is valued at $5,150~ today.)[/quote0035bd2dbf]

How did you invest in these stocks, online or what?[/quote0035bd2dbf]

TDAmeritrade )

[quote235ca2578a="FreeOffersNow"][quote235ca2578a="coolvaughan"][quote235ca2578a="FreeOffersNow"](by the way, I invested $2000 into stocks on Feb 12, and $2000 about 3 weeks later...$4000 invested....my portfolio is valued at $5,150~ today.)[/quote235ca2578a]

How did you invest in these stocks, online or what?[/quote235ca2578a]

TDAmeritrade )[/quote235ca2578a]

While FON's unrealized gains are incredible - you've got to keep in mind coolvaughan that those aren't by any means normal returns in the stock market.

An online bank which has atleast 4% Interest, or open an ameritrade account and invest in some high yield dividend stocks. Big stable ones, like Utility companies, or some big miners. The stock could appreciate + dividend, When you invest in a blue chip, you're sitting on a pretty solid investment, slow appreciation, but safe. Of course theres a possibility for depreciation, but Yea. Or you could go with buying S&P 500 tracker shares, which have been giving yearly returns of 8%+ for the last few years.

[quote78369cc822="mpj31"]Look towards emerging markets, perhaps China is a good start.

Your safest bet would be through mutual funds, especially at an early age with such little $$$[/quote78369cc822]

Um...no. Please don't follow this guy's advice. China is a terrible buy and has produced weak returns for investors.

With a small amount like you have, I personally would open a Roth IRA for $1000 and save the other $1000 in an online Money Market account. You are a college student, which generally means your expenses are predictable. You gotta pay for school, housing, food, and the rest is discretionary. I would personally let the IRA just sit there with $1000 invested in a solid index, like a total market or a target 2050 retirement index and let the compounding interest work for you. Your 5% in money market is good for short term money, but this won't do crap for you in the long term.

[quotee5a43a73dd="Gigante"][quotee5a43a73dd="mpj31"]Look towards emerging markets, perhaps China is a good start.

Your safest bet would be through mutual funds, especially at an early age with such little $$$[/quotee5a43a73dd]

Um...no. Please don't follow this guy's advice. China is a terrible buy and has produced weak returns for investors.[/quotee5a43a73dd]

Wait one sec - I agree that he shouldn't invest in China for a couple of reasons, but by no means can you say that China has produced weak returns. Chinese (Asian as a whole really) and Russian emerging markets based funds have in fact produced the highest returns, albeit with the greatest risk.

It seems like everyone around here loves their retirement funds, maybe it's just me but I'm going to have a few major expenses in the next 40-50yrs before I consider retirement. House(s), cars, children...

Someone made a good point earlier and said you need to have a lot of different type accounts, but I think you start with a basic investment account if you can afford it as a college kid and then with a stable job you start thinking more in the lines of IRAs, 401k, 403b (if you work a non profit), etc

I'll stop hogging this thread now, I'm just a finance junkie. shrug

[quote792c43a108="mcal44"][quote792c43a108="Gigante"][quote792c43a108="mpj31"]Look towards emerging markets, perhaps China is a good start.

Your safest bet would be through mutual funds, especially at an early age with such little $$$[/quote792c43a108]

Um...no. Please don't follow this guy's advice. China is a terrible buy and has produced weak returns for investors.[/quote792c43a108]

It seems like everyone around here loves their retirement funds, maybe it's just me but I'm going to have a few major expenses in the next 40-50yrs before I consider retirement. House(s), cars, children...[/quote792c43a108]

I've got those expenses coming up too, but the more you can get into a retirement account now, the better off you are. I started with $500 in my IRA, and $1000 in my money market. I'm putting $150 into each of those accounts, and looking to double my contributions to at least the money market, but probably both. I'm also putting $100 pretax into a 401k, which is matched by my employer (can't beat that, it's an immediate 100% ROI!).

I plan on using the money market for large purchases, such as a car or down payment on a house. Additionally, I'm working on building up my checking account to a significant amount, so I can get away with jacking my car insurance deductibles up higher. If you can set $1000 aside somewhere in a money market account, you can get away with a $1000 deductible, and therefore save tons of your premium. If you need the money, you've got it. If not, it's making money for you at least.

Anyway, that's my investments in a nutshell. I've got some other stuff going on, but at such a young age, I want to make sure I get as much as I can afford to into my IRA as quickly as I can, because it will really add up.

I just got done doing a 40-minute presentation on retirement planning. Key concept START EARLY. Retirement planning is important because you can expect to spend 16-25 years in retirement--too many yeasr to be bored, lonely, and broke.

Consider this If from age 25 to 65 you invest $300 per month and earn an average of 9% interest per year (not uncommon), you'll have $1.4M in your retirement fund [$144,000 invested] . Waiting just 10 years until age 35 to begin your $300-a-month investing will yield about $550,000 [$108,000 invested], while if you wait 20 years to begin this investment, you will only have $201,000 at age 65 [$72,000 invested]

Notice the power of compounding interest...though you only invested $36,000 more starting at age 25 rather than age 35...there is an $850,000 difference in your retirement fund come age 65!

That said, do you have other income? i.e. if you put all $4000 away are you ABSOLUTELY CERTAIN that you won't need it before retirement? If not, I'd recommend common stock...mutual funds are for old people ;)

I'm not such a big fan of mutual funds, the majority of mutual funds actually take losses and you have to pay a premium for them.

I highly recommend reading

www.iwillteachyoutoberich.com

He's a college graduate who offers great advice on investing and finance in general. Read up there for more reasons mutual funds aren't so great. I would recommend learning stocks (buy and hold). They really aren't as risky as you might believe-- just don't try to day trade. There is also info about Roth IRA vs Traditional IRA's on there, for starters.

[quotecc044f77a0="mpj31"]Look towards emerging markets, perhaps China is a good start.

Your safest bet would be through mutual funds, especially at an early age with such little $$$[/quotecc044f77a0]

people, quit supporting China!...

now, so as not to get the thread off topic,
your bank kinda sucks. my bank offers 5.5% on a 3 month CD. somewhere around there. forget exactly.

CD's aren't investing....[refer to YouTube link I posted above]. My Personal Financial Planning professor is Vice President, Portfolio Manager at a prominent bank and flat-out told us not to bother with them. After inflation, you're lucky to make 3% off a "6.25%" CD.

Do your research and look into stocks.

[quoteb1bdc4170f="FreeOffersNow"]CD's aren't investing....[refer to YouTube link I posted above]. My Personal Financial Planning professor is Vice President, Portfolio Manager at a prominent bank and flat-out told us not to bother with them. After inflation, you're lucky to make 3% off a "6.25%" CD.[/quoteb1bdc4170f]

Yeah, and I'm friends with the CEO of one of the largest investment houses on the east coast and he advises CDs for young college kids who know not when they'll need the money.

Different strokes for different folks.

If anybody has any good information on investing in stocks with a little bit of cash please let me know via PM. I have looked through this thread and saw a few, but if anybody could direct me in the right direction it would be very helpful.

Look up BRIC and read a few articles, then tell me not to invest there. I'm not saying to put everything there but if you want good returns thats the place.

For example
http//www.usatoday.com/money/perfi/columnist/waggon/2007-03-02-emerging-markets_x.htm

[quote3babfb778c]Consider China, whose gross domestic product soared an estimated 10.5% last year. By contrast, U.S. GDP grew only 3.3%. Not surprisingly, China's stock market soared, rising 83% in 2006. The Standard & Poor's 500-stock index, meantime, gained just 15.8% (assuming dividends were reinvested).[/quote3babfb778c]

2006 may have been the time to invest in China, because now you have to worry about overheating. But if you look towards other emerging markets as well as coupling that with some safe funds you should be able to get some good returns. If you do lose money, don't take it out, it will always go back up. People who don't sell their stocks during crashes always benefit more than those who do.

I wouldn't start an IRA just yet. Wait until your career. In the end though, you can't really kill yourself no matter what you do. Investing at an early age with a good allocation is the best thing you can do for yourself right now.

[quotefd83adb16c="gnznroses"][quotefd83adb16c="mpj31"]Look towards emerging markets, perhaps China is a good start.

Your safest bet would be through mutual funds, especially at an early age with such little $$$[/quotefd83adb16c]

people, quit supporting China!...

now, so as not to get the thread off topic,
your bank kinda sucks. my bank offers 5.5% on a 3 month CD. somewhere around there. forget exactly.[/quotefd83adb16c]

Understand that that 5.5% is not 5.5% you will get in 3 months, but is what you would earn in a year. All CD rates are the amount you would earn for a year so that you can easily compare them to other CDs. So you would end up with 5.5% divided by 4.

Mutual funds are no good as it is very hard for an account manager to consistently beat the market. Sure, funds beat the market all the time, but in the long term they don't.

Rather than mutual funds, I prefer to index. A perfect index for starters is a retirement 20__ index for when you plan to retire as this is something that will mirror the entire market with a proper asset allocation but will allow you to invest with less money because it is one index instead of having five difference index funds.

For the person that said not to invest in an IRA as a college student, I do not see the problem. I myself have a Roth IRA, in which the money can be used for retirement, education for a first home purchase. These are my major expenses and if you ever really want to you can use them on those items, but it doesn't really make since as long as you have reasonable interest rates to pay because you will earn much more over time in the market than you would save if you pay more down payment on your home.

Also, keep in mind that there is no single way to invest. As shown earlier, professors and professionals often tout their own ways to invest and share differing opinions and have facts to back up their own methods. If there was a single correct way, everybody would do it and the returns would decline.

[quote17ef3077d9="mcal44"]
Wait one sec - I agree that he shouldn't invest in China for a couple of reasons, but by no means can you say that China has produced weak returns. Chinese (Asian as a whole really) and Russian emerging markets based funds have in fact produced the highest returns, albeit with the greatest risk.

[/quote17ef3077d9]

I am guessing that since you are a "finance junkie" you have read Jeremy Siegel's work. Do you disagree with his "growth trap" theory?
In his recent book he ecompares Brazil and China. From 1992-2003, Brazil's economy grew at only 1.8% a year, less than one-fifth of China's. China, Siegel points out, also had a stable currency, no inflation problems, and political stability; Brazil was the opposite. Yet investment returns in Brazil averaged 15% a year while in China returns average -10% a year. The reason "low prices and high dividend yield."

[quote40a34fca70="Gigante"]In his recent book he ecompares Brazil and China. From 1992-2003, Brazil's economy grew at only 1.8% a year, less than one-fifth of China's. China, Siegel points out, also had a stable currency, no inflation problems, and political stability; Brazil was the opposite. Yet investment returns in Brazil averaged 15% a year while in China returns average -10% a year. The reason "low prices and high dividend yield."[/quote40a34fca70]

Gigante, please tell me you didn't just plagiarise someone else's "summary" of [i40a34fca70]The Future for Investors[/i40a34fca70] to pass as yourself off as some sort of scholar in a casual OT discussion. PLEASE.

[quote6b6eb0b83b="FreeOffersNow"][quote6b6eb0b83b="Gigante"]In his recent book he ecompares Brazil and China. From 1992-2003, Brazil's economy grew at only 1.8% a year, less than one-fifth of China's. China, Siegel points out, also had a stable currency, no inflation problems, and political stability; Brazil was the opposite. Yet investment returns in Brazil averaged 15% a year while in China returns average -10% a year. The reason "low prices and high dividend yield."[/quote6b6eb0b83b]

Gigante, please tell me you didn't just plagiarise someone else's "summary" of [i6b6eb0b83b]The Future for Investors[/i6b6eb0b83b] to pass as yourself off as some sort of scholar in a casual OT discussion. PLEASE.[/quote6b6eb0b83b]

I read a book too - its called working for a financial services company, it's a good one - very hands on.

[quote88b4783650="FreeOffersNow"][quote88b4783650="Gigante"]In his recent book he ecompares Brazil and China. From 1992-2003, Brazil's economy grew at only 1.8% a year, less than one-fifth of China's. China, Siegel points out, also had a stable currency, no inflation problems, and political stability; Brazil was the opposite. Yet investment returns in Brazil averaged 15% a year while in China returns average -10% a year. The reason "low prices and high dividend yield."[/quote88b4783650]

Gigante, please tell me you didn't just plagiarise someone else's "summary" of [i88b4783650]The Future for Investors[/i88b4783650] to pass as yourself off as some sort of scholar in a casual OT discussion. PLEASE.[/quote88b4783650]


I actually just reread what you wrote and I realized you are quoting a book that is using data from 1992-2003. Call me a fool but when I think about investing, I think today and while historical data is useful you gotta be up with the times. Accountants and economists obsess about the past - Finance guys use the past only as a guide. China and Russia are hot now (but likely nearing the end), so is timber in Canada - they might not of been in 1992-2003 so you're right in that respect.

[quote8ecf672ce3="FreeOffersNow"][quote8ecf672ce3="Gigante"]In his recent book he ecompares Brazil and China. From 1992-2003, Brazil's economy grew at only 1.8% a year, less than one-fifth of China's. China, Siegel points out, also had a stable currency, no inflation problems, and political stability; Brazil was the opposite. Yet investment returns in Brazil averaged 15% a year while in China returns average -10% a year. The reason "low prices and high dividend yield."[/quote8ecf672ce3]

Gigante, please tell me you didn't just plagiarise someone else's "summary" of [i8ecf672ce3]The Future for Investors[/i8ecf672ce3] to pass as yourself off as some sort of scholar in a casual OT discussion. PLEASE.[/quote8ecf672ce3]

That is a summary from a blog. Obviously I can't pull the numbers myself since my book is not here @ my dorm. I definitely am not a scholar, I consider myself a student, constantly learning from those around me. I like to challenge people because I want to be challenged back and if proven wrong it makes my knowledge that much more concrete.

[quote305c73bb14="mcal44"][quote305c73bb14="FreeOffersNow"][quote305c73bb14="Gigante"]In his recent book he ecompares Brazil and China. From 1992-2003, Brazil's economy grew at only 1.8% a year, less than one-fifth of China's. China, Siegel points out, also had a stable currency, no inflation problems, and political stability; Brazil was the opposite. Yet investment returns in Brazil averaged 15% a year while in China returns average -10% a year. The reason "low prices and high dividend yield."[/quote305c73bb14]

Gigante, please tell me you didn't just plagiarise someone else's "summary" of [i305c73bb14]The Future for Investors[/i305c73bb14] to pass as yourself off as some sort of scholar in a casual OT discussion. PLEASE.[/quote305c73bb14]


I actually just reread what you wrote and I realized you are quoting a book that is using data from 1992-2003. Call me a fool but when I think about investing, I think today and while historical data is useful you gotta be up with the times. Accountants and economists obsess about the past - Finance guys use the past only as a guide. China and Russia are hot now (but likely nearing the end), so is timber in Canada - they might not of been in 1992-2003 so you're right in that respect.[/quote305c73bb14]

You see no problem with continuing to put money into China? I am weary of the investing outlook now. Investors seem to be overcoming fears quickly and I don't think they are right in their continued bull outlook, but that is just me. People continued to put money in the market up to the point the market climaxed during the tech bubble and continued to do so as it was falling assuming that losses were temporary and would quickly continue the bull-like pace. Financial advisers were not exempt from this.

Sign up at emigrantdirect.com They've been in the new a couple times and offer a 5.05% APY Savings Account. It's an online bank, but transferring cash is easy and quick. There are no fee or minimum account balances and are VERY secure.

-Tony