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Have you ever had money and didn't know what to do with it?

L

lexmark

Member
Hello ATOT!

I am a dead-broke college freshman who has just been given $3,000 (not from working) and has no idea what's the best way to put use to it. I don't know much to anything about investing, so I believe stocks are out of the question. I thought about putting it in my savings account, but then the money would just be sitting there doing nothing, therefore its as if I never had the money in the first place, right? (the rate sucks too might i add).

Then I thought about building a new rig (mine is supremely outdated), but I don't think my folks at home would oblige. Next idea was paying my on my tuition, but I got 4 years to worry about that, right? 😉

Man there are so many choices! Anyone have any ideas what is the wisest choice for a person who doesn't know alot about money? Thanks!
 
First of all no, I have never had money and not known what to do with it. You could look into Emigrant (sp?) or another online savings account that pays 4 to 5 % interest. Or as already suggested buy mutual funds and let it grow.
 
Let it sit somewhere to gain value, but make sure you can get to it. You never know when a rainy (or sunny) day will come up and you will know what to do with it.
 
Originally posted by: lexmark
Hello ATOT!

I am a dead-broke college freshman who has just been given $3,000 (not from working) and has no idea what's the best way to put use to it. I don't know much to anything about investing, so I believe stocks are out of the question. I thought about putting it in my savings account, but then the money would just be sitting there doing nothing, therefore its as if I never had the money in the first place, right? (the rate sucks too might i add).

Then I thought about building a new rig (mine is supremely outdated), but I don't think my folks at home would oblige. Next idea was paying my on my tuition, but I got 4 years to worry about that, right? 😉

Man there are so many choices! Anyone have any ideas what is the wisest choice for a person who doesn't know alot about money? Thanks!
Click to expand...

put all $3k into a roth acct at Vanguard. pick the Vanguard 500 index, which is the s&P 500. leave it there for 40 yrs. if you have $10k in that acct by age 22, it'll reach $1M by the time you retire, assuming the avg stock market gain of ~10%.
 
Why do you have to spend it? I dont understand why so many people think that just because they have money they have to spend it. Save it for when it is necessary. Pay your tuition. Definitely dont use it to build a new rig unless you have extra money.
 
Have you made $3000 in the past year? If so put all of that money into a Roth IRA. I suggest going through Vanguard. Their small cap and the emerging market accounts are pretty good to get into considering you're young.

If you want less risk (most likely less return as well), then you could just put it into their S&P fund.
 
Originally posted by: HombrePequeno
Have you made $3000 in the past year? If so put all of that money into a Roth IRA. I suggest going through Vanguard. Their small cap and the emerging market accounts are pretty good to get into considering you're young.

If you want less risk (most likely less return as well), then you could just put it into their S&P fund.
Click to expand...

morningstar has rated only vanguard's small cap growth (visgx) 4 stars. small cap value and small cap index (naesx) are only 3 stars.

International emerging markets (veiex) is doing GREAT now (+40%), but you don't want to risk 100% of your porfolio in international.
 
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