General Question

smile1's avatar

College freshman with 10K. What should I invest in?

Asked by smile1 (488 points ) November 27th, 2011

I am currently a freshman in university. I would like to see what possibilities are out there to invest in.

Through the past years, I’ve worked and saved up here and there. Now, I have roughly $10,000 in my bank. I have good scholarships for school, so I only have to spend 3,000 a year for tuition. Thus, I am thinking I could invest 5K into something. But I have no experience with investing… what is there? Is this a good time to start?

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13 Answers

CaptainHarley's avatar

Gold and/or silver. Not stocks, the actual metal.

mazingerz88's avatar

Never too late or early to learn about stock investing and possibly options.

Rarebear's avatar

Pay off all your consumer debt first.

Start a Roth IRA and invest in low cost no load index funds, such as what Vanguard offers. Beware of financial advice you receive on the internet. Buy a good easy to read book like “Investing for Dummies” or even better, “Personal Finance for Dummies”.

lillycoyote's avatar

If you have any high interest debt paid off and you have a couple of thousand dollars set aside in case of an emergency then I would suggest looking into investing in an index fund unless you want to spend your freshman year learning about how the markets work and researching individual companies. There are no sure bets, no fast money and you have to consider investment for, the long term, I think.

smile1's avatar

Managed to keep off the debt. Good thing! :)

Will I lose money with an index fund? or with the Roth IRA one?

Tropical_Willie's avatar

@Rarebear Has the answer “NAILED”. Go with an index fund !

tedd's avatar

If you literally buy the metal as @CaptainHarley suggests, then gold and silver are not terrible investments. But this is a cautious investment, as you obviously have to house the metal until you decide to sell it, and you have to find a buyer who will buy actual gold (which can be tougher to do if you expect retail value).

With stocks, take your pick of advice. My money is on solar power, a lot of people like energy companies in general (in particular oil), tech companies, etc, etc.. It’s a matter of who’s advice you listen to.

You could do the roth IRA route, but keep in mind that’s a retirement fund, and you won’t have access to it without penalties, until you retire.

You could also try a savings account or CD. With the CD you can get pretty respectable interest (5% range if you look hard enough), but you can’t get your money til it matures (usually 2 years or so)... The savings account has lower interest but you obviously have access right away.

You could also go the non-investment route, and maybe take a vacation of a lifetime. While it may not show on a bank line, a trip back packing across Europe or Asia (or something of the like) is an extremely valuable experience that most will never have.

comity's avatar

This isn’t my area of expertise, but I have an excellent Financial Advisor and have weathered well the financial storms. Check out Barron’s report on top financial advisors and work with those in the know. http://online.barrons.com/report/top-financial-advisors/1000/2010. Good luck and good for you for saving!!

HungryGuy's avatar

Individual stocks are a fancy way of gambling, IMO. Stash the money away in a high quality conservative mutual fund (not a 401k) until you graduate. Then use the money to buy a multi-family house that you’ll live in. If it’s not owner occupied, the bank will require about 30% down. But if it’s owner occupied (i.e. you’ll be living in one of the apartments), the lending rules are more like buying a private home and that’ll be enough. Keep in mind that you’ll need about 2000 to 3000 for closing costs.

Rarebear's avatar

Look, before you invest anything, read a book. If you don’t know what an index fund or Roth IRA is, then Fluther isn’t the right place for you to be getting your financial information. The two books I mentioned above are excellent starts. They’re easy reads.

sevenfourteen's avatar

Retirement :)

lillycoyote's avatar

Now that @Rarebear has weighed, the voice of reason, I think he is absolutely right so I am rescinding my previous answer. This is not really the place to get financial advice. Investing and planning for your financial future are very important and any kind financial planning can be very personal and should be geared to your particular circumstance and temperament. You need to either educate yourself; maybe read the books @Rarebear mentioned, or seek out the services of a professional financial advisor, and even if you do that, educating yourself is a good idea so you can get the most from working with a financial advisor.

Rarebear's avatar

Thanks Lilly, your advice was fine, and I agree with it. I’ve made it a point in my own investing never to invest in a financial instrument I don’t fully understand. That’s why I read books. Ultimately I also hired a fee only hourly based financial planner but that’s only after I knew what I was doing.

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