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Originally Posted by jorgelito
GReat thread, I love this topic.
I have an ING Orange Savings account with a few grand in it. I also have a couple of grand sitting around in liquid form plus a couple of grand in checking.
Should I roll it into a CD ladder, mutual funds, go to P&G and buy some shares or keep it in savings as "Emergency Fund"?
I am a Junior in college (Full-time, no job) with no CC debt, FICO score of 777, a small student loan (Stafford), no car, no cell phone, no car insurance, so I'm pretty free.
I would love to buy property or invest money in something but I live in southern California where the only thing I could afford is half a phone booth with an outrageous ARM.
So assuming I have 3-5 grand to "play" with, I really don't want it to just sitting around (like in the ING commercial) but rather "working" for me.
Ideas?
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Well, it really depends on the type of risk that you are willing to take. If you decide to take some risk, decide how much of that money could could afford to potentially lose.
However, I would make sure that you have a minimum of 6 months living expenses saved up in an emergency fund - keeping those funds liquid for anything that may come up.
Any additional funds, however, you should invest in something - be it a CD ladder for low risk/low yield, or stocks for a higher risk but more potential.
As far the student loan is concerned - weigh any tax advantages it may offer vs. the amount of interest you are paying. Even though it may be a low interest rate, it will likely be more advantageous to pay it off before investing, as you would have to earn X% higher on your investments just to break even.