Starting to invest on my own - few questions

Quote from dealgate : LOL - Exactly my point! $3k isn't shit. Short of day-trading, nothing will make a little bit of money a lot. Just spend it all and be happy.

I suppose its relative though. For a college student, with not many other responsibilities, $3K is still something. Maybe they have the family support (ie tuition/housing, etc) and don't have to help pay loans either. Since OP still has 3 years left, it'd make more sense to set a goal and just work towards that. Such as to turn that into $10k by the end of college so that OP can put money down on a property / car, etc. If it doesn't work out, then that's alright, they learn a valuable lesson in personal finance. When they start making real money, they'll be in better shape to handle their investments.

I remember not wanting to burden my parents on-top of tuition, I traded stocks/options to cover all my personal expenses from the age of 16-24...and then I ran out of money and called home.

Quote from 1stbuy : Since we're going the "safest" route possible, avoid wasting 4 yrs and the associated tuition for one of these less useful majors out there which leave you no better than someone who didn't go to college. I know a few too many people who have degrees in general subjects, but can't find jobs, and now are responsible for decent sized loans.

And how many of those people had high GPAs, were involved in extracurricular activities (other than a frat/sports team), and actively applied to a lot of jobs?

I know plenty of people that slacked through college and "can't find a job", but there are a lot of reasons for that. Nothing about them makes them stand out, or they didn't apply to more than a couple jobs, or they just posted their resume on Monster and prayed for the job gods to find them. Or they never learned how to interview, didn't dress well for the interview, or didn't apply to jobs with more realistic salaries/requirements. Everyone wants a job making 100k starting, but most people need to aim a little lower.

As for that being the safest route, it probably is. But most people that gamble with investing end up losing money. There are 'good bets' (Index funds, long-term investments, etc), and there are bad bets (short-term investing). But if you only have $3000 and less than a year, the best bet is to spend that money and enjoy it now, and focus on your long-term prospects (even if that means focusing on school now, so you can earn enough to have the capital to do some real investing later on in life).

Just my 2 cents. But what do I know, I'm just a 24 year old guy with ~75k saved/invested...

Quote from DWad : And how many of those people had high GPAs, were involved in extracurricular activities (other than a frat/sports team), and actively applied to a lot of jobs? I know plenty of people that slacked through college and "can't find a job", but there are a lot of reasons for that. Nothing about them makes them stand out, or they didn't apply to more than a couple jobs, or they just posted their resume on Monster and prayed for the job gods to find them. Or they never learned how to interview, didn't dress well for the interview, or didn't apply to jobs with more realistic salaries/requirements. Everyone wants a job making 100k starting, but most people need to aim a little lower. As for that being the safest route, it probably is. But most people that gamble with investing end up losing money. There are 'good bets' (Index funds, long-term investments, etc), and there are bad bets (short-term investing). But if you only have $3000 and less than a year, the best bet is to spend that money and enjoy it now, and focus on your long-term prospects (even if that means focusing on school now, so you can earn enough to have the capital to do some real investing later on in life). Just my 2 cents. But what do I know, I'm just a 24 year old guy with ~75k saved/invested...

Actually, some of the people I know have had high GPAs, 3.7+. However, what major you do plays into it a lot. Do something general while getting a good GPA and you're still not going to be making bank (and maybe no job either). Whereas something like engineering, and/or the right connections, and you're probably going to be in much better shape. Obviously not everyone can do that though.

You certainly have the right to be proud of your success thus far, but posting it up is not needed to prove your point in this case. Even if what you say is true, there is always someone out there making your numbers look mediocre at best. I have a couple friends who at 23 bought their first condo/townhomes ($350k range) in great locations, and have already made a ton. That being said, I would have to admit that you (and those friends of mine) are certainly ahead of the curve given your age.

I day trade and I make tha dolla dolla bills, yo. Actually, check that....I do more hour trading, usually minute trading....cause seriously, who has all day to get rich? I gots no time, the Bentley dealership closes at 4 pm!

But yeah, OP the best way to save your money is to spend it. This is Greece, not America. Wait a sec....

Thanks for all the replies! There are too many people to quote so I'll just post hoping whoever replied sees this.

I probably should have laid out my financial and educational status a bit better. I'm fortunate enough to be pursuing a degree in Electrical Engineering from the University of Illinois at Urbana-Champaign. I'm also fortunate enough to have my tuition and other college expenses paid for by scholarships and my parents. The $3000 I had was just random things I had accumulated over the past 18 years. There would have been more, but I spent it on some things growing up.

Initially, my goal was to do something with that $3000 that beat the cost of inflation and see that money again within a year. Apparently, that doesn't seem possible. Looking at my options again, I think the best I could do was move up to a 3 year time horizon so that I could see that money again when I begin to be financially independent. But like Brian said, this still might be too small.

It felt silly to have that money sit in a .25% savings account and I assumed that the better place for it was investing since I had never looked there. Maybe it's time to re-evaluate or just plain spend the money. I do have a small startup website at school. It's definitely no Facebook, but maybe I'll put a little money there.

Thanks again for all the advice!

Sounds like a reasonable plan.

You could still invest in an index fund, and if it goes down below even in a year, wait it out until it goes up, and take it out when you need to. Or, if it goes up in a year, take it out and enjoy it. As long as you know that there's risk involved (even in the long term), and don't get scared and pull it all out the second it starts to drop a bit.

At the very least, find a better savings account. Try to get at least 1%, or you could go with a CD if you can find one that does better than a savings account (probably won't get much more than 1%, but it doesn't hurt to look).

As for your start-up.. good luck, you could be the next Zuck .

Quote from DinkinFlicka : I probably should have laid out my financial and educational status a bit better. I'm fortunate enough to be pursuing a degree in Electrical Engineering from the University of Illinois at Urbana-Champaign. I'm also fortunate enough to have my tuition and other college expenses paid for by scholarships and my parents. The $3000 I had was just random things I had accumulated over the past 18 years. There would have been more, but I spent it on some things growing up.!

Bingo! This is just play money for OP.

Looks like you've helped yourself out plenty and don't need our help after all

Spend the money?

Seriously, what kind of craptastic advice is that?

And there you have it, day trader it is. PM vaultaddict, he's the whale around here and will set you up with mad tight stops on killa trades.

Quite honestly, as the credit bubble continues to collapse you'll probably like physical cash in your sock drawer more than anything. Why lend it to a bank for free?