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Yvening_Star's avatar

I have $6,000 in my savings and want to invest it. Any ideas?

Asked by Yvening_Star (148 points ) January 8th, 2012

I’m in my mid 20s and was saving up money for traveling, but I have decided I rather invest it. I know $6,000 is hardly anything, but I’d like to start somewhere. Thought I’d give fluther users a shot. Would appreciate any ideas. Thank you.

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21 Answers

LuckyGuy's avatar

Have you paid off all your credit card bills and high interest loans? Unless you are a fortune teller (or connected) the market is a risky place.
Firearms manufacturers seem to be doing quite well. But your mileage may vary.

JLeslie's avatar

$6,000 keep in the bank, don’t risk such a small amount of money. Look for a CD Maybe, and pay down any debt you might have.

You should have at least 6 months of expenses in your savings in case you lose your job. So if you live on $2,000 a month, that would be $12,000.

Judi's avatar

Are you working? Are you looking for passive income or to start a business?

Neizvestnaya's avatar

I agree with the advice to pay off any debt and then keep leftover $ liquid as a buffer towards a 6mos. support system.

missingbite's avatar

As above, if you have debt, pay it off. If not, or with what is left over, www.smartypig.com

Charles's avatar

Ensure you have a financial safety net. Maybe six months of savings, or mom and dad, you’ll have to decide that.
Pay off high interest debt. (Mortgage is not high interest debt).
If you have earned income, a Roth IRA is a good idea, that’s $5K a year. At your age, invest in aggressive growth or growth mutual funds. You can afford to take risk.
Investments in taxable accounts should most likely be in tax efficient investments like index funds. Investments inside your tax free (Roth) and tax deductible (IRA, 401(k)) accounts can be used to diversity your portfolio.
If you buy a home, do not use this (or other cash) to pay down your mortgage, assuming mortgage rates are still rock bottom.

Jeruba's avatar

The advice above is sound: pay off any debts first. The interest drain on unpaid balances is going to be much greater than what you’d be likely to earn in any savings or investment account.

SmashTheState's avatar

It depends how much hustle you have. On the streets, you survive by hustling, by making quick, often shady or sketchy deals. This is the only way to quickly parlay small sums of money into much larger amounts. Hustling doesn’t scale well, since you start running into legal problems if you try it on any scale larger than a few thousand dollars.

I used to make a small living by hustling. The thing about hustling is that it requires a lot of work, a lot of energy, and a lot of imagination, since you have to work fast and you’re never doing the same thing twice. I can give you a few examples of things I’ve hustled over the years.

I was in a department store in Vancouver and saw some leather belts on sale for 50 cents each. It was clearly a loss leader to get rid of some old stock. I had $20 in my pocket, and I scooped up as many as I could afford. I had my itinerant’s license (it was $90 for a whole year) which made it legal for me to sell door to door, for just these sorts of opportunities. I spent an afternoon going door to door selling the belts for $5 apiece and turned my $20 into $200. Then I took my $200 and made a bulk purchase of some incense for 25 cents a pack and went door to door selling it for $1 a pack, for 3 for $2. I now had enough money to pay my rent, plus a little bit left over to start the whole thing over again.

Over the years I’ve hustled everything from cleaning supplies (I had an ‘in’ with a professional chemist who sold me small quantities of industrial-grade janitorial chemicals at wholesale) to erotica. You’ll never get rich this way, but you can quickly double or triple a small sum of money in a short period of time by hustling. If you try to hustle larger amounts, you’ll start cutting the grass of the shitbag capitalists who run our society, at which point they’ll use their pet politicians and police to crush you under taxation and city bylaws. You have to make sure you nibble small enough amounts that you’re beneath their notice.

Jeruba's avatar

Now, there’s an informative answer ^^^ of a sort that you’re not likely to run across in your favorite magazine or popular blog. GA.

bkcunningham's avatar

Ingenuity, @Jeruba, at its finest.

JLeslie's avatar

Although @SmashTheState showed a very clever way to turn a little money into much more, that to me is not investing, I think of investing as being much more passive. @SmashTheState actually had to do some work. Investing involves some work to if one is to do it well and reduce the risks, but not the same as actually taking on physical inventory of a good.

bkcunningham's avatar

@JLeslie, I’ve been investing in rehabbing houses and putting them back on the market for a profit. Flipping is one phrase people use. Investment in real estate is another phrase. It isn’t passive and takes a lot of back breaking work and mental work with scheduling, negotiating prices, selecting the right offer price/selling price and so forth.

If I had no high interest debts and $6000 in discretionary income I’d invest in about 20 ounces of silver. The price is down and it is a good time to buy and a good investment if you follow the markets and have blind faith it will go back up. It is all a crap shoot really and if you have itchy hands, and won’t need the cash for awhile; invest in something tangible with a chance of a higher return.

JLeslie's avatar

@bkcunningham You make a good point, but in this case, this particular question, did you assume at first she meant stocks, mutual funds, bonds, etc.? I guess that was where I was coming from. The other things mentioned I would call a business, or business on the side. I have invested in real estate, I bought property, rented it, flipped it, but I never fixed it up to sell with a profit. Rehabbing houses I would call more of a side business, or can be someones main income of course. I guess it is just semantics in the end, the definitions kinds of overlap. I wonder what @Yvening_Star original intent was when she asked the question?

bkcunningham's avatar

Yes, @JLeslie. I instantly thought stocks, bonds, mutual funds etc. when I read the question.

Rock2's avatar

At this time in history, put it in a bank. If the economy starts improving when Obama is thrown out of office then look to mutual funds in the stock market.

Judi's avatar

@Rock2 , even if I agreed with you that Obama had anything to do with the poor state of the economy, your logic would still be off. The idea of stocks is to buy low and sell high. Why would he wait until the stock market went high to invest? If your assumption that the market would get better without Obama were true then the best idea would be to invest now and wait for your money to grow.

talljasperman's avatar

I would Invest in myself… something that I need that will be worth more to myself than what a little interest would be worth from buying bonds. Education is valuable, and some places you can get a free or low priced education. A library card only costs $15/year where I come from and provides endless opportunities for self investment. I would buy a tall comfortable mat to do free simple exercises on for a low price prob $65 instead of paying for a gym pass. The best investments are usually the ones that help one learn, get in shape, or meet ones needs. You could, if you want, invest in a local food bank or charity in your community.

If you want a financial return on your investment then you risk losing some of your money… I can’t suggest much better than what everyone else above me suggested. Maybe a useful tool to improve your work, everyone uses tools; everything useful from a hammer to a computer program; all are tools.

I would also consider keeping some of the money handy for an emergency fund.

Rock2's avatar

Judi,
To think that you can “time the market” (buy low sell high over a short period of time) is how a lot of people lose money in the stock market. Predictions are very difficult, especially about the future. You can get into a lot of trouble in the stock market thinking that you are smarter than everyone else.

Judi's avatar

I think you just made my point @Rock2

Jeruba's avatar

Predictions are very difficult, especially about the future.

I love that line.

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