| Student needs help with saving-numbers included |
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R9brasil
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| Student needs help with saving-numbers included |
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I am a Math PhD student, and I know very little about investing or savings accounts. I do however work as a TA. After paying for housing, food, and some goodies. I'm usually left with some money at the end of the month. I place whatever I have left over in a savings/checking account. However, the account is only .17% APR. So basically my money is loosing value by sitting in the bank from what I understand. I wanted to know if there was anyway I could put my money to work for me. I have about $13,000 saved up now. I'll be able to add about $1,200 per month to that for the next 3-4 months. $3,000 I'd like to keep just in case of an emergency, but the other $10,000+ I would like to put to work. I don't have much time to trade on a constant basis. Could any of you recommend a type of investment or savings account that would allow what I have to grow steadily and safely? Thank you very much.
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Thu Apr 07, 2011 7:24 am |
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littleroc02us
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Quit worrying about investments in the stock market at this point in your life. Your a student for God sakes, worry about your investments in you education. Take that money any pay for school as much as you can in cash, that way when you graduate you have less debt. Most students complain about school debt after they graduate.
Romans 13:8 “Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law.”
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Thu Apr 07, 2011 2:01 pm |
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oldguy
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quote:
However, the account is only .17% APR. So basically my money is loosing value by sitting in the bank from what I understand.
Yes, bank accounts, CDs, etc are designed to safely store wealth, not build wealth. While you earn 0.17%, the purchasing power of your money is decreasing by about 2%.
The Law of investing - risk and return are directly proportional.
A no-risk investment gets a return approx equal to inflation. A high risk investment is mostly a gamble, a speculation, and almost all 'players' end up losing their capital over their career (altho some hit the lottery for short periods). That leaves 'moderate risk' - like many things in life, moderation is a good answer. The general broad stock market index historically gets an average return of 10% to 12% over long periods, 20 to 30 yrs.
This is a good place to put your math skills to work. I'm a retired engineer, my math skills have served me two-fold thru-out life - (1) to earn a staedy above average wage for over 35 yrs, and (2) to wisely invest that earnings.
As Einstein said, the power of compounding is the most important math relationship. Example - use 11%/yr, the historical return on stock indices - the eqn is F = 1.11 ^ Y. So for Y=30 yrs, F = 23, ie your $13,000 would be $297,000. And if you added $5000/yr to it, it would be $1,300,000.
The F=(1 + i)^Y eqn above assumes annual compounding. The eqn for continuous compounding is F=e^iY. So F = 2.718 ^ 3.3 = 27.
You have probably heard of the Rule of 72 that bankers & investors use - ie, your money doubles when Y times i = 72. It is derived from the eqn above, F=e^iY - when iY = 0.72, F=2.05.
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Thu Apr 07, 2011 3:57 pm |
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jeffreymint
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How about asking your adviser for a start? Student anyways can get free consultations even at the university you can find professors who can guide you with it. Ever tried?
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Thu Apr 07, 2011 11:57 pm |
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KatherineLee88
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quote:
Originally posted by jeffreymint
How about asking your adviser for a start? Student anyways can get free consultations even at the university you can find professors who can guide you with it. Ever tried?
What? Really? I feel like this is just begging for conflicts.
Have you started a Roth IRA for yourself yet? I personally have just invested some money into mutual funds in a Roth IRA. You could put $5,000 into the Roth (the max you're allowed to contribute in a year) and then put the other $5,000 into a taxable account (which is basically any brokerage account not in a specialized retirement or college savings plan account).
I found that investopedia.com has some good resources on getting started.
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Sat Apr 09, 2011 3:04 am |
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