Money: What to do with it?

martinc909

martinc909

Member
Hi everyone.
I just turned 17 years old. & now thats school is almost over I just wanted peoples opinions on what to do with the money that I get during the summer. for sure i could guarantee that I will make more than $2000.
what should I do with that money?
 
martinc909

martinc909

Member
and i wouldn't want to buy any aquarium stuff. i would rather hold the money to invest it in someway. or something else im just not going to use it to buy a tank.
 
sepulatian

sepulatian

Moderator
Originally Posted by martinc909
and i wouldn't want to buy any aquarium stuff. i would rather hold the money to invest it in someway. or something else im just not going to use it to buy a tank.
You sound like you are trying to convince yourself. If you are looking to invest it, get an IRA, or start a 401K. Open a savings account, buy a small amount of stock. You can invest it any way you want. What advice are you looking for here?
 
martinc909

martinc909

Member
i dont know whether to put it all in a savings account. because my parents aren't very, (could say financial) and they dont have any 401k or anything like that. hopefully i will learn myself so that i could teach them some stuff.
 
renogaw

renogaw

Active Member
that is insanely responsible and far thinking, and very good for you for doing it!.
i guess i'd have to ask if you're going to college and how its getting paid for. If you have to foot the bill between scholarships and student loans, put the 2k into a CD, a savings account won't be enough interest and it would be better spent under your mattress.
if you have college paid for, then putting it into a retirerment account (ira or money market) would be better. most investment firms (stock brokers, etc) won't look at you twice if you only have $2k unless you know one of their better customers. you could try trading stocks online as well, since you're young enough where $2k loss wouldn't be as horrible compared to losing that money when you're older. i would buy a stock in a reputable company and never look at it again (until your taxes come in of course).
 
maxalmon

maxalmon

Active Member
Whats really amazing is if you do a little research and math, your 2k could become an substantial amount of money way, way, way, way off in your future, 2k invested now in a high risk fund could generate more than you could imagine (market ups & downs apply) in 25-40years. Do some research and you will see what I mean. Even if you invest 2k in a 6% savings account (they exist) and then reinvest all the revenue per year is substantial in 20 years. I had a very smart grandfather and he made small investments for me over a period of 1st thru 12th grade and I'm now retired at age 43 because of his simple and small investments spread out over 40 years.
 
mie

mie

Active Member
Did you know that if you started saving half of every paycheck from age 20 till age 40 you could retire
 
martinc909

martinc909

Member
so once i begin to get money, i should begin to put it in a savings account?
And once i have a little more money, i should invest it in someway.
I already have a savings account with a local bank. should i open an account with another bank?
 
the j.o.p.

the j.o.p.

Member
no keep 1 savings acct. don't split your money you'll lose what little interest you will gain. a lot of times you can buy cheap CD's and get a little bit higher interest rate than a savings acct. plus with a CD u will always have access to the money if u ever need it.
 
martinc909

martinc909

Member
wats a cd?
what i meant was if i open a savings account w/ someone else and use that one instead. The one that i currently have a savings account is called Merced School Employees Federal Credit Union.
 
ophiura

ophiura

Active Member
Originally Posted by martinc909
Hi everyone.
I just turned 17 years old. & now thats school is almost over I just wanted peoples opinions on what to do with the money that I get during the summer. for sure i could guarantee that I will make more than $2000.
what should I do with that money?

I just really wanted to take the opportunity to give you a pat on the back. Unlike many other threads we see where it is "spend it on this" because I guess they don't FEEL they need to worry about the future...you are really being responsible.
One thing you may need to consider is will you need access to this money, or can you put it "away" for several years at least. Some things are very difficult to get money back out of without penalties of some sort.
 
team2jndd

team2jndd

Active Member
Originally Posted by ophiura
I just really wanted to take the opportunity to give you a pat on the back. Unlike many other threads we see where it is "spend it on this" because I guess they don't FEEL they need to worry about the future...you are really being responsible.
One thing you may need to consider is will you need access to this money, or can you put it "away" for several years at least. Some things are very difficult to get money back out of without penalties of some sort.
I agree
It really depends what your goals are. A cd doesnt do much for you unless you are going to let it mature over a few years. Same with bonds. You get penalties if you decide to get the money. Savings accounts dont do much for you in terms of interest. The stock market is risky but deffinately has the highest potential for growth. You need to figure out for yourself what your goals are. IRA's are a great option if you can leave the money alone until you retire.
 
ophiura

ophiura

Active Member
Yeah - what is your risk? (new lingo
)
Will you get support for college, or is this money needed for college (or other expenses - car, etc).
Usually when you are younger you can afford more risky things like stocks. But if you definitely need that money...obviously that is different. Savings accounts are usually a pretty poor place to "store" money if you will, but there are no penalties for getting it (that being said, it is VERY easy to get, and can go fast :( )
 
tangman99

tangman99

Active Member
I have a lot of experience in the stock market and if I were you, here is what I would do. You may have to have one of your parents co-own the account with you as you are only 17 though.
I would go to etrade and open one of their savings accounts that is paying 5.05% interest. I moved all my liquid saving accounts there. It is a great return and it is totally liquid in that you can get it out any time you want. I would also open a brokerage account there. I think you can do both with the $2000. Let the $2000 sit for a while until you can start saving some money. Make it a habit to put 10% of your paycheck in your savings account every time you get paid.
Learn some things about stocks and then when you get comfortable, look at some of the index stocks like qqqq. These are pretty safe but I wouldn't buy into any of them right now. The market is too oversold right now for index funds IMHO. For the small amount of money you will have at first, I would look for a good small cap stock that is getting alot of attention and buy into that. That's about your only option until you build up a substancial amount.
One other option that you might want to look at is Mutual Funds. You can find good ones by looking at MorningStar ratings. I personally only buy them in my 401k where that is all that is allowed. A mutual fund is a collection of hundreds of stocks so they as a whole they are not as volatile as a single stock.
Just my 2 cents.
 
renogaw

renogaw

Active Member
Originally Posted by martinc909
wats a cd?
what i meant was if i open a savings account w/ someone else and use that one instead. The one that i currently have a savings account is called Merced School Employees Federal Credit Union.

a CD is a certificate of deposit, generally a short (or long term) investment account through your bank. They can be weird, like a 9 month with 5% interest, or a 3 month with 3%. you cannot touch the money, but can take a loan out against it if you need to (sorta odd to do so). Your local paper may have a weekly money section that should tell you what banks in your area are giving what % on cd's.
Most credit unions offer the best interest on accounts, but no matter what a savings account will yield the least amount of return, although the safest bet to get one.
 
martinc909

martinc909

Member
okay.
right now im kinda broke. with mothers day being today had to buy my mother a nice present. but i'll start to save my money. usually i get paid $100 per job that i do.
since January 21,2007 i've made about 2,000. not much but with school i had better things to worry about. so now that summer is coming ill have more time to think of work & also spend a lot less.
so once i slowly begin to gain money:
should i deposit it in my local credit union or
should i deposit it in etrade like tangman suggested?
then just let it sit there
& is this the right etrade account:
https://us.etrade.com/e/t/welcome/completesavings
 
tangman99

tangman99

Active Member
Originally Posted by martinc909
okay.
right now im kinda broke. with mothers day being today had to buy my mother a nice present. but i'll start to save my money. usually i get paid $100 per job that i do.
since January 21,2007 i've made about 2,000. not much but with school i had better things to worry about. so now that summer is coming ill have more time to think of work & also spend a lot less.
so once i slowly begin to gain money:
should i deposit it in my local credit union or
should i deposit it in etrade like tangman suggested?
then just let it sit there
& is this the right etrade account:
https://us.etrade.com/e/t/welcome/completesavings
The difference is in the rate on interest they pay. Your local credit union will be more convenient but will probably pay a lot less in interest. That is the correct link. It is a money market account but it is liquid. A CD may pay a slight higher rate, but you are locked it for the life of the CD unless you pay a penalty. The Etrade account is liquid but may take a couple of days to get your money out. You can open a credit union account and link that to the etrade account. That makes it more convenient as you just deposit the money in your credit union account and then go to Etrade to transfer the funds. It takes about 3 days for the transaction to complete and you can transfer money either way. There are some limitations to the Etrade account as it is a money market such as a limit of 6 withdrawals a month so read all the information there.
Again, convenience may be a bigger plus for you if you need to get the money. Check and see what interest rate the CU is paying and figure the difference. If you need access to your money the same day, then the CU would probably be a better choice.
HTH
 
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