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Investing experts, what to do with $6k cash?

Discussion in 'Other Off Topic Forum' started by mighty, Apr 1, 2004.

  1. mighty

    mighty Karting

    Nov 2, 2003
    231
    Investing beginner here, just sold one of my cars and have $6k extra in cash. Anyone got some good advice as to what to do with it other than saving it in my bank account? I dont want any long term commitment though. thanks.
     
  2. LAfun2

    LAfun2 F1 Veteran

    Oct 31, 2003
    6,106
    California
    Full Name:
    Ryan
    I am no expert. Are you wanting high risk or low risk options? Do you want to invest for 5 years, <5 years, or >5 years?

    I think if you give us more info it would be helpful.

    I would personally say some mutual funds are good for you. I would have said Roth IRA, but you said no long term.

    Take it from a 20 something young un ;)
     
  3. Forza1

    Forza1 Formula Junior

    Mar 20, 2004
    484
    California
    Full Name:
    DC
    Ryan, have you started your own Roth IRA as of yet? If so, shoot me a PM, I'd like to talk with you about it.



    -DC
     
  4. LAfun2

    LAfun2 F1 Veteran

    Oct 31, 2003
    6,106
    California
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    Ryan
    Yup and PM sent :)
     
  5. DodgeViper01

    DodgeViper01 F1 Veteran

    Oct 1, 2003
    6,760
    New Jersey
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    Woods
    Make sure you have a good broker invest it for you or go into a type of bond. Matters what return you are looking for. My mother is a retired stock broker so I let her invest my money. She is good. LOL!
     
  6. Ryan S.

    Ryan S. Two Time F1 World Champ
    Silver Subscribed

    Mar 20, 2004
    21,269
    im only 20, and dont have any money invested, lol. buttttt, i am a huge warren buffett fan. soooooo, if i had the six grand, id put it into some type of bond.
     
  7. mighty

    mighty Karting

    Nov 2, 2003
    231
    So it's narrowed down to mutual funds and bonds. I'd love to do real estate but $6k doesnt seem enough. I can take some risk because i'm still young. Definitely interested in mutual funds, it's gonna sound dumb but where do i start?
     
  8. mighty

    mighty Karting

    Nov 2, 2003
    231
    By the way, is it a must to find a broker? because i'm afraid a good one would charge me a lot.
     
  9. BeachBum

    BeachBum Formula 3

    mighty, open an online trading account, scottrade is good or ameritrade, there are several low cost online brokers out there

    researching what might be a good trade now, i should have more info in about a week or so
     
  10. Dr C

    Dr C Formula Junior

    Dec 1, 2002
    480
    Kansas City
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    Ed
    If you have credit card debt, or owe any money that carries a higher interest rate than you can earn with your money, then you don't have $6,000. No sense in investing in an instrument that has a lower interest rate that other debt that you still carry.
     
  11. Eric308gtsiqv

    Eric308gtsiqv Formula 3

    Nov 26, 2001
    1,952
    Orange Park, Florida
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    Eric Eiland
    Excellent advice!
     
  12. Hubert888

    Hubert888 F1 Veteran
    BANNED

    May 14, 2003
    5,376
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    Hubert
    i would not invest in BONDS in the current economic environment in my opinion. The market is expecting rates to rise over the near short term, which means that bonds will not fare well.
     
  13. Ryan S.

    Ryan S. Two Time F1 World Champ
    Silver Subscribed

    Mar 20, 2004
    21,269
    yes, very good advice.
     
  14. LAfun2

    LAfun2 F1 Veteran

    Oct 31, 2003
    6,106
    California
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    Ryan

    I don't think age should be a barrier. I started saving since my first job at 16, and have invested since then.
     
  15. LAfun2

    LAfun2 F1 Veteran

    Oct 31, 2003
    6,106
    California
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    Ryan

    I think 6K is too low for real estate. But since your profile is not filled out, I cannnot say where you live so I cannot comment. In my neighborhood you might buy an Andy Gump for 6K. However if you go to Rochester, WA you can probably put a huge downpayment on a house with 6K.

    As far as starting, I would say look around online, it is really easy. You can open an account and transfer money online. Try fidelity.com or vanguard.com

    Look around, educate yourself, read, and find what best works for YOU.

    Asking about investing, in my opinion, is akin to asking "who is the right woman to marry?"

    Well for some, blonde with big boobs is right, for others petite brunette works, and others like asians. YOU have to decide what you are interested in. Just educate yourself and find out what companies interest you and use your money wisely.

    Always remember stock market is volatile, if you are looking to make 10k out of your 6K by next month, chances are low. However your 6K can dwindle down to 2K as well, so go in knowing the risks.

    Whenever I invest money, I act like I will never see the money again, and its gone forever, that mentality helps me.

    Once again, take my advice for what its worth, just a 22 year old lacking in brains.
     
  16. LAfun2

    LAfun2 F1 Veteran

    Oct 31, 2003
    6,106
    California
    Full Name:
    Ryan

    I agree with what Ed has said here. Too many young people today have credit card debt up the wazoo with nothing to show for it. Rather sad. Not talking about you Mighty, but more in general.

    If you do have credit card debts, I would suggest doing a balance transfer to 0% APR cards that give you like 15 months of 0 interest. Then you can pay it off that way. Beware of the transfer fee they charge though.
     
  17. mighty

    mighty Karting

    Nov 2, 2003
    231
    No debt right now
     
  18. Ryan S.

    Ryan S. Two Time F1 World Champ
    Silver Subscribed

    Mar 20, 2004
    21,269
    no doubt. i just feel dumb giving advice about investing when i my self dont have any invested. actually, i really shouldnt of posted that little bond thing that i did. just didnt seem right to me. i just want to talk about investing sometimes really bad. but the buffett stuff stands true. and if there are any other buffett fans in here, id love to chat with you. and lafun, i loved that story you posted talking about where you came from etc.. very motivational. cheers to that!
     
  19. LAfun2

    LAfun2 F1 Veteran

    Oct 31, 2003
    6,106
    California
    Full Name:
    Ryan

    I don't think one needs to have invested in order to talk about it. Hey I am on a Ferrari board talking about F cars, and I don't even have one!

    I think as long as you are interested, you can talk about it. Never doubt yourself or your posting.

    It is certainly not like I have millions invested and I am an expert, but I just share what little I have with other people, hoping it will help them somehow.

    I am glad you liked the story. If I motivated one person, mission accomplished. It has made me who I am today, and hopefully it can help someone else one day.

    Thank you.
     
  20. Ryan S.

    Ryan S. Two Time F1 World Champ
    Silver Subscribed

    Mar 20, 2004
    21,269
    very good point.
     
  21. JSinNOLA

    JSinNOLA F1 World Champ
    Lifetime Rossa

    Mar 18, 2002
    14,761
    Denver, CO
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    John
    If you are risk averse then you can buy an index.

    No reason to pay the fees associated with a mutual fund when an index does the exact same thing!
     
  22. warrenn

    warrenn Formula Junior

    Mar 12, 2004
    376
    LA for now,NJ really
    http://ferrarichat.com/forum/showthread.php?t=12403

    and iaci is still good.
     
  23. Challenge

    Challenge Formula 3

    Sep 27, 2002
    1,530
    PA
    Full Name:
    Kevin
    I'd reccommend you take $5K and put in in a money market fund and keep your paws off of it unless there is a real emergency in your life (health or catastrophe). Take the other $1K and buy one long term stock after doing your due diligence.

    Not many 20-yr-olds own stock, are debt-free, and have a $5000 cushion to fall back on if problems come up. You will be well on your way and will sleep like a baby...

    BTW, congrats.
     
  24. Slim

    Slim Formula 3

    Oct 11, 2001
    1,735
    Pacifica, CA, USA
    Full Name:
    richard
    Money market returns are terrible (2% or so, right?). Why not just put it in an index fund like a vanguard offering? one based on the S&P like the Vanguard 500 is probably diversified enough but you can get ones that are based on the Wilshire 5000 (vanguard total stock index) or Schwab has a 1000 index fund but the expense ratio is more than double the vanguard funds (but still way lower than a regular actively managed mutual fund and the turnover of any index fund is going to be lower so you'll have that tax advantage). Since you're dumping money in all at once, you might want to just buy an ETF (here's info on vanguards: http://mutualfunds.about.com/b/a/061353.htm) and you can purchase these from any brokerage.

    Bet that the economy as a whole will continue to grow as it has for the last million years, and you'll be fine. Right guys?
     
  25. LAfun2

    LAfun2 F1 Veteran

    Oct 31, 2003
    6,106
    California
    Full Name:
    Ryan
    Slim

    Would you care to explain what an ETF is?
     

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