solo2020

Ok, here's my situation. I'm a college student with about $1000 in my savings account, disposable income. Rather then going on my expensive impulse buys, I want to invest in something. I'm not really all that informed about stocks and bonds. But here are the criteria's (which I'm sure is not even remotely possible):

. Fairly liquid - I would want to liquidate my investment in a relatively short amount of time

. Decent return - Almost impossible with $1000 but who knows?

. No Risk - Making $10 an hour with tax. I don't want to lose my hard-earned money

Any idea's?

Stare At The Sun

Decent return with no risk? I don't see that.

Personally, I'd buy 1000 dollars of lucent stock.

Flyguy

He's right. Thetre's no such thing as high return with zero risk. If you're not big on risk then mabye dump it into a IRA? At least it'll grow somewhat.

smooth

You might look into a CD. Then you get slightly higher yield than a savings account, but can get your money out within a year or two depengind on what kind you get.


As a fellow college student, I don't see much benefit of $1K in an IRA. I tried a low input IRA and it has sat ungrowing during these past 4 years. What a joke. After inflation, I have lost money. You won't be able to touch it for another ~40 years without penalties.

1K might be better off as an emergency account or used to pay down credit cards or student loans. What are your current loans' APR's? If you are borrowing at ~4%, your interest earnings would be astronomical if you were earning anything close to that right now--so, at best, your earnings would cancel out.

If you try and invest it on the market, chances are your capital will be eaten alive by fees. Washington Mutual will waive fees for IRA's, but only if you agree to let them manage your money for at least 5 years. I think the minimum investment was 2K.

If you want to start an IRA, I think you would be better served to slice out a certain percentage of your income that you will not miss every paycheck--say, $25 each check.


So, I think the priority goes:

1. pay down credit cards
2. pay down loans
3. secure emergency savings account
4. secure high interest savings (CD's, etc.)
5. secure long-term retirement
6. play the market when, or if, you come up with a sizeable lump sum

__________________
"The theory of a free press is that truth will emerge from free discussion, not that it will be presented perfectly and instantly in any one account." -- Walter Lippmann

"You measure democracy by the freedom it gives its dissidents, not the freedom it gives its assimilated conformists." -- Abbie Hoffman

kigo

Have you ever heard of affiliate programs and google adwords if not get in touch

zen_tom

$1000 isn't worth investing in much - stocks will eat you alive (fee-wise), especially if you are looking to keep it liquid.

Tax-free saving accounts are good, but lock your money away - and will definately not pay $10 an hour.

I'd definately look at using it to pay off any outstanding credit you owe, and if there's any left over and you want to make it grow you could try one of the following:

1) Buy an beat-up old almost-classic car (with the intention of doing it up) Time, patience, care and attention will reward you with enjoyment, focus and hopefully a reasonable financial return
2) Take a course in some kind of aroma-new-age-spritual-massage-therapy - a great way to meet hot girls, and it will give you an easy and (potentially) enjoyable income for the rest of your college years
3) Take it to vegas and put it on Red - if you're lucky you're lucky, if not you're not - might as well have some fun while you're finding out eh?
4) Whatever you do, don't spend it on crap you don't need. Tv's, electronics, computer software of ANY kind, it's all crap, and worthless in the end.

hokieian

buy into an index fund. Vanguard has the lowest fees and I think you can open an account with only $1000.

Index funds (on average) double your investment every 7 years. So in 2011 you will have $2000, 2018 $4000, 2025 $8000, and in 2032 your initial $1000 will have turned into over $16000.

I would HIGHLY recommend you pick up a copy of the book "You Have More Than You Think" by David and Tom Gardner. It is geared towards people in your exact situation. It is an excellent book.

mosha

Agreed, you are not going to get a high return with a low risk, if that was possible we would all be rich. A CD is very safe but the return is minimal. No matter what you decide on, you will not see any huge changes anytime soon. If you have no debt and your a student I think this may be the time to start up your IRA. Its wont be liquid like your looking for, but its time to start planning for the future.

Rodney

If you just want to put it somewhere, make a little money, but not worry about managing it, don't forget the lowly savings bond. They pay a decent return compared to bank interest rates, and they're indexed to treasury note/bond rates; as rates rise, so does your return. You can cash out any time after one year, and the interest is exempt from state income tax, if your state has any. Which boosts the real return even more.

funkeodor

Another thing to think about is a Roth IRA, it's a good way to avoid to much tax and get a better return than a CD. http://www.rothira.com Another thing to think about is finding a foreclosure on a property that is fairly cheap. http://www.foreclosure.com has nation wide listings. I have found properties on there for as little as 400$

zeeznutz

Or you could just find some shady drug smugglers and buy up some of their tarzanian tar and make a quick 5 grand.. If you dont have time to sell it hire some local kids and tell them youll buy them a video game if they can sell all of your goods.. good luck

schnable

I think this post was made in jest, but I am in a similar situation to you and found that investing in drugs is the best return you can get on < $5000 or so. If you have the right circle of "associates" you can make a nice return pretty quickly. You can turn a grand into $1500 with a good connection and a little sales work in 2 weeks or less. It may be considered risky by some, but as long as you play it smart and don't let too many people know what you're up to, I found this revenue stream more reliable than stocks for smaller sums of money. And for 25-50% return, a little risk is worth it. Plus you get to skim a little of the merch off the top

RogueHunter65

If you are not so called "stock savy" this may not work for you....

But I use Scottrade to buy and sell stocks and the money you have is rather liquid.
I started with 1000 dollars into my account. With luck and smart buys it has grow over the last year. In one day alone (with prior research of course) I made 900 by buying a new ipo, a chinease jop company basically monster jobs for china. Got a 25% return on the first trade. Look for small gems like this, I would not buy this stock now though as it is inflated and sure to fall soon but Scottrade has the lowest fees for trades. Then again I am a Finance Major in one of the best business schools in the World but I think anyone with common sence could atleast pull in 9% returns a week.

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I suffer from amnesia and deja vu at the same time... I think I have forgotten this before

89transam

Buy a wholesale lot on ebay. Take it to the local swap meet.

EDIT: Or buy a million Iraq Dinar Here on ebay

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I'd rather be rich than stupid.

Tralls

Bet it all on black!

rzarobbie

If that is the case.. can you please manage my money? Because quite frankly you would have a better return than about 90% of investors out in the market today.

Merlocke

If you're going to risk it on a market.
At least Foreign Exchange only really has two directions.
Up or Down... you pick the right direction - and you make money :P

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-=[ Merlocke ]=-

BalloonKnots

Open an ING savings account. It is very liquid, you can transfer funds in and out in a matter of days! There is NO risk (no fees and no minimum) and you are guaranteed a current return of 2.20%....which is better than what you might get in the stock market these days.

Jizz-Fritter

I'm looking at stocks myself, and if I had $1000 dollars that I wanted to put in a short term investment, I'd put it in Yahoo. They're rated at $50 per share by the end of the year, and now their at $37. Yes, that's only a net gain of $300, but is relatively risk free.

If I was looking at a time table of over a year, I would probably go in on Merck. Yes, their facing up to $10 billion in liability for Vioxx, but A) they have more than that in liquid assets, and B) I think the media is making their liability seem like it's going to be worse than it actually will be. Although this will be a long-term investment, I think it will have a great yield. /me

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"Principle is okay up to a certain point, but principle doesn't do any good if you lose." Dick Cheney

Mr. Market

I like the ING savings account. But, also run the numbers on investing in a Roth IRA (after tax investment), compounded say at 10% or so. What you want to do is to accumulate a large pile of F**k you money by the time you're 40 - 50. This is very doable. Remember this does not meet your criteria of liquidity, but you need to get started. Along with that, take a few bucks and invest in your financial education, subscribe to Money, Forbes, my favorite Better Investing, learn how to make 15% over time. You can do it!

hockeeguy19

Bottom line is you're not gonna beable to buy $1000 worth of low risk stock and get a decent return. If I were you I'd look into something that is a bit risky and a bit volatile and just keep a good eye on it. Remember that the stock market is extremely liquid and the chances of you loses alot of that money is slim if you're keeping an eye on it.

Yakk

9%/week > 8700% per year. (1.09 * 1.09 * ... * 1.09 52 times > 88)

8700% / year return on investment isn't something anyone with common sense could pull. You should get a refund on your education from your business school, they obviously forgot to teach you economics.

You can get 9%/week. You can also put your 1000$ on "00", and make 59,000$ in a few seconds.

Any return of 9%/week is either highly risky or requires insider knowledge. Usually both.

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Last edited by JHVH : 10-29-4004 BC at 09:00 PM. Reason: Time for a rest.

Forster Bittner

There's an axiom in finance that essentially states that an investment that has greater risk will require a greater return than an investment with less risk. Having said that, the investment with the lowest risk would be some sort of US Treasury bond. These bonds are essentially promises, made by the US government, to pay interest on money loaned to them. These bonds, or promises to pay interest, are a pillar of the world's financial system. If the US ever defaulted on any of its bonds, it wouldn't be an exaggeration to say the world's financial system could collapse.

Your constraints would direct the choice to some sort of Money Market Fund that invested in US Treasury bonds. Such funds are probably available at your local bank.

belkins

High return equals high risk.

Merlocke

If you were Canadian - I'd have a method to use the $1000 in a Tax saving strategy that'd net you anywhere from a 75 to 85% Return. Oh well - I've only got enough time to read and understand ONE complicated set of laws in a Tax Act from one country

Did you ever decide what to do yet?

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-=[ Merlocke ]=-

D Rice

put it in Walmart. You will be fine

pan6467

Invest in foreign currency and fast. I'd go with the canadian, euro, aussie or chinese... but the Yen is growing also.

$1000 right now could be a very very good investment and given 6 months have a nice return.

__________________
I just love people who use the excuse "I use/do this because I LOVE the feeling/joy/happiness it brings me" and expect you to be ok with that as you watch them destroy their life blindly following. My response is, "I like to put forks in an eletrical socket, just LOVE that feeling, can't ever get enough of it, so will you let me put this copper fork in that electric socket?"

jorgelito

I think the Chinese currency is pegged to the dollar. Wouldn't that mean if you bought $1000 worth of Chinese currency it would always be worth that amount?

Or am I missing something in your post?

mrlayance

$1000 in SIRI, last week that is...

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sig for rent

smooth

I think you've got it correct. No sense in buying the yuan right now.

When I was in Canada a couple years ago, the impression I got was that I should spend whatever I had just exchanged as I wasn't likely to get my greenbacks back.

And I heard a lot of disparaging remarks from vendors about their currency relative to mine (like, "what is this [product] in dollars?" ($60 CND) "Oh, aboot 2 dollars, haha,hahaha"). that was the first time I had been out of the country (except mexico) and the first time I had heard someone talking shit about their own currency. I felt a bit awkward, actually.

But the point is, maybe Chinese and Canadian aren't the two best currencies to invest in (but double check Canadian because that was about 2 years ago and ours is taking a shit slot on the world stage these days it seems).

__________________
"The theory of a free press is that truth will emerge from free discussion, not that it will be presented perfectly and instantly in any one account." -- Walter Lippmann

"You measure democracy by the freedom it gives its dissidents, not the freedom it gives its assimilated conformists." -- Abbie Hoffman

onewolf

Fun question!

Option 1: Bet it all on your favorite team this weekend, or your local bookmaker's "lock of the week". Or reduce your risk slightly by spreading it over 2, 3, or even 4 games. Of course, if you do this each week, eventually you will lose all $1000. But it will be darn fun and you won't have to cut your own fingernails for a while.

Option 2: Randomly pick some stocks or stock funds based on hunches and pieces of info you gleen from message boards, Money magazine's November issue, or your Uncle Harry. Or throw some darts at the sunday stock section of your newspaper. Any of these approaches will serve you equally well, a fact that has been statistically proven time and time again. In fact, darts do better empirically because they don't charge fees. The Wall Street Journal has a "dart fund" that they track every week against readers and experts picks - check it out for yourself. In any case, you will do okay over time with any of these approches, although you will also be charged fees if you go with mutual funds, especially non-index funds. Never pay for a fund with an expense ratio above 0.40 (0.25 or lower is best) and don't ever buy loaded funds.

Finally, the best option:

Option 3: Note that this is also the most boring option, but it will yield the highest return over the long term with the lowest standard deviation (risk):

1. Open a Roth IRA with Vanguard, Fidelity, TIAA-CREF, or your favorite LOW-FEE brokerage. Low-fee matters. I prefer Vanguard because they are the king of low-fee index funds. However, a stock brokerage is fine too if you want to go with ETFs instead of index funds.
2. In this Roth IRA allocate your $1000 using this extremely complex formula, where X is your age:
   • invest X% in the Vanguard Total Bond Market Index Fund (or your brokerage's best total bond index fund or ETF - but not one that includes tax-free bonds - your Roth is already tax-free and tax free bonds have lower returns)
   • Invest (100-X)% in the Vanguard Total Stock Market Index Fund (or your brokerages closest fund or ETF - NOT an S&P 500 index fund, not a large growth index fund - a TOTAL MARKET index fund.
3. Or if you are really just feeling crazy and want to do something zany with your money... here's an even more complex formula that is even safer (lower risk) but more rewarding (higher return) over the long term. X is still = your age:
   • Invest [B]X% in the Vanguard Total Bond Market Index Fund
   • Invest [B](2/3)(100-X)% in the Vanguard Total Stock Market Index Fund
   • Invest [B](1/3)(100-X)% in the Vanguard Total International Stock Index
4. Most important: Max out your Roth every year if you possibly can!! $3000 is currently the maximum per person per year. The earlier you start, the better off you will be. Understand that anything you ever make in a Roth IRA will never be taxed. Period!! In the industry, we call that "free money" because that's what it is. It is free money from uncle sam. Over your lifetime, your $1000 will double every 7-10 years... meaning it will be worth $32,000 in 50 years (worst case - probably much more but I like to estimate conservatively). In a Roth IRA - your tax on that $31,000 income will be exactly $0. You can't beat that!
5. Every 2 years, re-adjust your Roth holdings back to the allocation provided in the above formulas above. They will need re-adjusting because (1) you will be two years older so X = X + 2 and (2) one allocation (either the bonds or stocks) will have outperformed the other and thus re-allocation is necessary. This re-allocation is your forced, easy way of buying low and selling high, without having to try to time the market yourself, which nobody can do (no matter what they claim).

Lastly, I would actually first take $20 out of the $1000 and buy the book The Four Pillars of Investing by William Bernstein. Some day you may want to read other investment books, but this one is best to start out with for so many reasons - the main ones being that they put all investments and investment guidance into the correct context, and when you have finished the book, you will understand everything you see and hear about investing, and more importantly, you will have an easy plan for yourself to follow for the rest of your life - with no need for annual stress and decision making.

After all that, go get drunk - you're in college.