| Some help with investment ideas? |
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Wayne
First Time Poster
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Joined: 22 Oct 2011
Location: Maryland
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| Some help with investment ideas? |
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Hey everyone,
Im 21 years old and am currently a junior at a military school. I recently had the oppurtunity to take out a $36,000 loan at 0.75%, I dont begin payments on the loan until June 2013 after graduating. Since my college is being paid for thanks to you fine taxpayers, I have $19,000 that was supposed to go paying for college, but is now in a govenment bonds.
Ive put $3,000 in my checking so that I can pay for day to day items, and the rest of the loan ($33,000) is just sitting in a savings account making only .04% interst.
Is there anywhere I can put the rest of the loan money that will increase its value. I was thinking about putting it in a CD, but the rates arent that high.
I dont know much about all this money talk so any advice would be appreciated.
Thanks alot!!
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Sat Oct 22, 2011 4:05 pm |
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payment proof
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I would never place any money from a loan into an investment where I could lose money.
Your best bet may be paying back part of the loan now and avoiding future principal and interest payments.
See Proof. You can make free money online.
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Sat Oct 22, 2011 9:54 pm |
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globaldoc2001
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My suggestion is that you go to the bank and inquire about the investment with the highest yield. Since the money is just a loan, sooner or later you would have to pay for it. The best thing is to computer as maybe the month to month interest from the bank might be good enough for your expenses while the base money remains intact in your possession.
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Mon Oct 24, 2011 12:56 pm |
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debedwards
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It's too risky for you to invest your money in stocks or bonds so better stick with something that you will not lose your money. Try your trusted bank and see if they have the right investment opportunities for you.
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Fri Oct 28, 2011 8:56 am |
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coaster
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quote:
Originally posted by debedwards
It's too risky for you to invest your money in stocks or bonds so better stick with something that you will not lose your money. Try your trusted bank and see if they have the right investment opportunities for you.
Sorry; but that's the WORST possible place to look for investment opportunities, and as far as TRUST goes, I think recent history addresses that issue most clearly.
~Tim~
Eye Candy : Why Whimsy
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Sat Oct 29, 2011 7:10 am |
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globaldoc2001
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I agree with both the earlier posts. I think stocks are nowhere near stable. My meaning was things like the time deposit offered by the strongest banks you have. The yield might not be that big, but it is at least growing, and stable.
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Sat Oct 29, 2011 9:08 am |
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oldguy
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IMO a $33,000, .75% loan is a golden opportunity to build a million dollars. But it depends on the loan terms - you need a longterm loan and a fixed interest rate. I often borrow capital for the purpose of investing it - I use mortgages. So my borrwed capital over thepast 40 yrs has been in the 5% to 9% range, and I use only fixed rate 30 yr loans.
I use only longterm investing, ie, stocks. In the shortterm, they fluctuate 30%, 40%, 50% in a yr - but over the longterm (30 yrs) the 'ups' and 'downs' statistically average - the longterm term return is about 11%/yr.
Example - if you invest the $33k at 11%/yr for 30 yrs it will be $755,000. If your note is for 25 yrs, your payment on $33k is $121/m, ie $36,201 total. So you would be paying about $3201 for the use of that capital - and using it to earn $755k.
BTW, if you invest incrementally, say $5000/yr, for 30 yrs in a similar (11%/yr) fund, that will be another $1,100,000. So it is a good plan to combine lump sum investing and incremental (disciplined) investing. As you can see, it dosen't take a lot of seed money to build $2M or $3M - and that will look really good when you are age 51.
And I agree with Coaster - avoid banks, they are good at banking (checking & saving), and not so good with investments.
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Sun Oct 30, 2011 6:34 pm |
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3door
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With respect to Oldguy and Coaster, since i'm early in my investing years, I would personally shop around for a solid FDIC insured savings account that usually has a low interest rate, but is pretty accessible. Often online ones work like ING (as long as they are legit). That said, building wealth for the future is very important, so maybe a 70/30 type of deal with Oldguy's advice might work. It's all up to your personal situation.
The reason I say that is because at 21, you may be soon looking for a house, a wedding ring, or some other large investment in the next few years. Taking a loan from yourself for a large purchase like that will pay off nicely in the long run vs getting a loan from someone else. It certainly isn't sexy, but it helps get the job done.
Hope this helps!
Brian
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Mon Oct 31, 2011 12:14 am |
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oldguy
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quote:
you may be soon looking for a house, a wedding ring, or some other large investment in the next few years. Taking a loan from yourself for a large purchase like that will pay off nicely in the long run vs getting a loan from someone else.
3door. Actually, taking a loan from yourself does not pay off, it costs you both time & money. (One more place where conventional wisdom is backwards, LOL). Much of my wealth goes back to getting 100% loans for houses, cars, most shortterm needs - and retaining my own capital for use elsewhere.
A caveat - I don't agree with getting zero down payment mortgages if you have no money. Before buying a house, I saved up the down payment but then I didn't use that monet for a DP, I took 100% loans and kept my money in reserve.
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Mon Oct 31, 2011 12:48 am |
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Anthia
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You should invest your money in properties.
I think this is the best place where you can invest your money and safely.
No fake signatures - thanks
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Fri Nov 04, 2011 6:20 pm |
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Dos
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An investment in knowledge pays the best interest. - Benjamin Franklin
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Sat Nov 05, 2011 4:02 pm |
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mariya
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I think shares are good for you being 18 you can sit on them if they go down. The dome and gloom merchants say dont buy them thing are looking bad. Times are looking grim in the economy but that makes them cheap. Something big that pays a good dividend is a good long term investment. Wait for now though let the economy deteriorate pick your moment and dont put all your eggs in one basket.
Green Deal Scheme
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Mon Nov 07, 2011 10:28 am |
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john bradford
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| ideas for you... |
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It is interesting that this forum is full of folks at the conservative end of the spectrum, suggesting that you pay back the loan or go get a CD at an FDIC bank. And then there's OldGuy pointing out the value of long-term investing.
So let me offer my 2c.
First, i'll quibble with OldGuy about his 11%. If you look at the past several decades, the 80s and 90s were great, but the other decades were crap. What will the next decade bring? The last one brought less than zero. With the unemployment issue, and the drag from Europe and banking in general, I think the coming decade may look more like the 70s than the go go 80s or 90s.
Given the performance of the market over the past three months, I don't think it's a safe time to invest. So I would stay heavy in cash until you see an uptrend develop in the S&P 500 index. My recommendation would be something like 5% Gold, 65% cash, and 30% Dividend Growth mutual funds.
You also might consider learning something about stock options as they can be used to reduce risk in the market. If anything, this market demands attention to risk.
John
Options guru, John Bradford shows you a simple trick for dramatically reducing the risk you face in the market today: http://GetWealthDirection.com/free
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Sun Nov 20, 2011 4:38 am |
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redfawkes
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Joined: 19 Nov 2011
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quote:
Originally posted by Anthia
You should invest your money in properties.
I think this is the best place where you can invest your money and safely.
No fake signatures - thanks
This is something that I would suggest too however this also takes time so you also need to be wiser in investing here.
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Mon Nov 21, 2011 12:24 am |
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