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Old 06-01-10, 10:42 AM   #1
EJ123
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I turn 20 in a few days; how should I invest money?

I have a summer job that pays 7.25/h. Working 5 hour shifts, 5 days a week, with possibly working into the fall semester at school I would really want to begin investing... preferably with an IRA.

I'm confused as to which brokerage would best suit my needs. I'm not making a lot of money, nor do I have much to initially pay if I open up an IRA, regardless whether it's a traditional or Roth. I could probably surrender $50 a month.

I also have $43k of student loans with variable interest rates, and I have two more college years left, plus graduate school (hopefully physical therapy school!)

Anyways, if any college students/financial people here have input, I'd GREATLY appreciate it. Apparently when I turn 21 I will receive some international index fund from a relative who has died...not sure what I'll do with that or how much is invested. Thanks guys.
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Old 06-01-10, 11:07 AM   #2
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$43k in student loans and you still have two years left? Wow. Granted, I went to college 10 years ago, but I think all four years of school, 100% on loans, totalled less than $18k!

Anyway, back to your post: Uhhhh... I am just glad you are looking at investing instead of just letting money sit around in a savings account, earning less interest than the rate of inflation.
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Old 06-01-10, 11:13 AM   #3
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20? TWENTY??? Not our little EJ!!
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Old 06-01-10, 11:23 AM   #4
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Invest in paying off those loans. Unless you can make a higher percentage on your money than the interest you are paying on your loans, it is the best investment you have.
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Old 06-01-10, 11:25 AM   #5
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Invest in paying off those loans. Unless you can make a higher percentage on your money than the interest you are paying on your loans, it is the best investment you have.
Concur.
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Old 06-01-10, 11:27 AM   #6
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Buy AAPL and forget about it.

Thank me when you turn 25. If I'm not dead.
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Old 06-01-10, 12:01 PM   #7
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Buy AAPL and forget about it.

Thank me when you turn 25. If I'm not dead.
Funny, I thought you were already undead.
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Old 06-01-10, 12:09 PM   #8
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Invest in paying off those loans. Unless you can make a higher percentage on your money than the interest you are paying on your loans, it is the best investment you have.
I agree. Keep some money in a savings account for a rainy day (specifically, one of them online savings accounts that have okay interest rates), and focus on paying off student loans.
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Old 06-01-10, 12:34 PM   #9
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Spend it on having a good time while you still can. You're too young to worry about investments. I don't know many people that look back and wished they had saved more money when they were twenty. If you were talking about enough money to pay a mortgage or something, it would be different, but $50/month for the next couple years won't make much of a difference, regardless of what Rich Dad Poor Dad tells you.
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Old 06-01-10, 12:40 PM   #10
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Spend it on having a good time while you still can. You're too young to worry about investments. I don't know many people that look back and wished they had saved more money when they were twenty. If you were talking about enough money to pay a mortgage or something, it would be different, but $50/month for the next couple years won't make much of a difference, regardless of what Rich Dad Poor Dad tells you.
I can't believe I'm saying this, but I agree 100%. Yeah sure, try to pay off your loans, but have a little fun while you are still young enough not to give a shyte.
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Old 06-01-10, 05:18 PM   #11
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I think it's good to get into the habit of long-term investing at that age, but not to ruin the fun.

College loans aren't evil if they're at a low rate. I'm no investor but I'd follow this simple formula for a ten year plan, less if you're earning some good coin.

#1 build up safety cash, start long-term investing...something...anything
fast #2 kill the higher interest debt
#3 build more cash and make more longer-term investments after killing all debt (aside from mortgages etc...)
#4 think about building wealth including higher risk investments

Investing is a habit as much as anything else. Once you see the power of compounding interest you'll be hooked, assuming the market doesn't tank again.

At your age I didn't think I could surrender any of my paycheck to my future. But now, 19 years later I regret not doing so.
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Old 06-01-10, 05:36 PM   #12
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Buy AAPL and forget about it.

Thank me when you turn 25. If I'm not dead.
Not sure if you're joking or not, however it's not a bad idea. Personally I would opt for a large cap energy stock and let it sit for a decade.
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Old 06-01-10, 05:36 PM   #13
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If you want to invest and not blow it on alcohol now, pay off those loans that are accruing interest now!
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Old 06-01-10, 06:38 PM   #14
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Doesn't student-loans not accrue interest while you're still in school? At least that's how it was for me. In which case, it's not costing you anything to carry those loans. Put your money in something that's earning instead and when you get out of school, there's a grace period before the interest starts to build. At which point, set up a new plan to pay off the loans if your investments aren't earning as much as the interest on the loans (not likely).
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Old 06-01-10, 07:17 PM   #15
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Don't overlook the many benefits of booze, drugs, and loose women...at any age.

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Old 06-01-10, 07:27 PM   #16
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Not sure if you're joking or not
I'm always joking. That being said, I own a load of APPL and I'm not selling it. Yet.

I think APPL doubles in the next five years. Or sooner.
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Old 06-01-10, 07:28 PM   #17
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Buy AAPL and forget about it.

Thank me when you turn 25. If I'm not dead.
Sure,thats the sincere safe mainstream old geezer advice.

Let's step back 30+ years and reevulate this.
This kid will look back on missed college shinanigans the rest of his life.Everyone has student loanes unless you give blood to the University Athletic Dept.
Keep the gpa up,spend the extra money one booze ,broads,and an occasional toga party and enjoy your college days.
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Old 06-01-10, 07:42 PM   #18
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Doesn't student-loans not accrue interest while you're still in school? At least that's how it was for me. In which case, it's not costing you anything to carry those loans. Put your money in something that's earning instead and when you get out of school, there's a grace period before the interest starts to build. At which point, set up a new plan to pay off the loans if your investments aren't earning as much as the interest on the loans (not likely).
Depends on the loan. Many loans do in fact accrue interest while payments are deferred.
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Old 06-02-10, 05:07 AM   #19
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Doesn't student-loans not accrue interest while you're still in school? At least that's how it was for me. In which case, it's not costing you anything to carry those loans. Put your money in something that's earning instead and when you get out of school, there's a grace period before the interest starts to build. At which point, set up a new plan to pay off the loans if your investments aren't earning as much as the interest on the loans (not likely).
To those who say to have fun in college: I don't think anybody is suggesting otherwise. If you have money you want to invest, your best bet is chipping away at loans. I don't think it's been suggested to not buy any beer filled red cups etc.

Unsubsidized stafford and all private loans accrue interest in school; unsubsidized loans -- for which you're heavily limited to how much you may borrow -- do not. Unfortunately for the OP, he's probably got no more than 8000 in unsubsidized loans.
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Old 06-02-10, 02:27 PM   #20
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To those who say to have fun in college: I don't think anybody is suggesting otherwise. If you have money you want to invest, your best bet is chipping away at loans. I don't think it's been suggested to not buy any beer filled red cups etc.
There is always more fun to be had.

(I agree with your logic, but I would still spend it on beer)
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Old 06-02-10, 03:30 PM   #21
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Old 06-02-10, 03:51 PM   #22
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Spend it on having a good time while you still can. You're too young to worry about investments. I don't know many people that look back and wished they had saved more money when they were twenty.
How old are you? Because I know PLENTY of people who regret spending their days in college partying. This "Oh, I'll deal with it later" attitude is the reason so many people are in debt right now.
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Old 06-02-10, 04:04 PM   #23
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Hey EJ! Follow Pcads' lead, buy Apple.
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Old 06-02-10, 04:06 PM   #24
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I'm always joking. That being said, I own a load of APPL and I'm not selling it. Yet.

I think APPL doubles in the next five years. Or sooner.
If, by doubles, you mean goes to $1/share? I think you are correct.
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Old 06-02-10, 07:24 PM   #25
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How old are you? Because I know PLENTY of people who regret spending their days in college partying. This "Oh, I'll deal with it later" attitude is the reason so many people are in debt right now.
Those people were doing it wrong. I'm 29. I'm not suggesting he take up competitive binge drinking.

I'm not even saying he should spend it on partying. Just have a good time. If you're already having a good time, save it for an extra good time when you need it, because you will if you're going straight to a grad program. It's just my two cents.
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