Investment Advice for a College Student

[ECUpirate44]

Hey everyone, I was hoping some of my wiser Macrumors buddies could give me some advice.

I'm a 20 year old college student and I want to look into investing anywhere from 5-6K which I have made over the past few months working. I'm not a big spender and if I don't do something with this money, it is just going to sit in my savings account until after college so I figured i'd should do something with until then. I took a look at CD's, but with the interest rates so low, it doesn't seem like that route would make much sense. I'm open to stocks, but with the market as wary as it is right now, it makes me nervous. I'm really not interested in making a high risk, high reward investment either. Any advice you guys have would be greatly appreciated!

 

[Tomorrow]

At your age, a Roth IRA makes sense. I'm assuming you want to park the money somewhere and let it build for many years, this might be the best way - and the earnings are tax-free.

 

[eawmp1]

Mattress.

Seriously, Roth is the way to go in your situation for long term (i.e. retirement savings). You can manage yourself or park it in a muni fund (you can designate the risk/potential return).

 

[statik13]

If it was me, I'd set up a meeting with an investment banker. They should be able to assess your risk tolerance and help you choose your best investment vehicle.

 

[Mousse]

Pay off any debt you may have: Credit cards, mortgaged, car payments...anything. Once all your debts are paid, then you look to start saving. I find it astounding to hear about a college student without any debt.

Being a student you'll need quick access to you $$$ for an emergency, so short term investments or saving is the best bet. Tying it up long term would be foolish if it lets debt pile up. Once you've got a steady income, then you can start thinking long term investment. My $0.02.

 

[steve2112]

Pay off any debt you may have: Credit cards, mortgaged, car payments...anything. Once all your debts are paid, then you look to start saving. I find it astounding to hear about a college student without any debt.

Being a student you'll need quick access to you $$$ for an emergency, so short term investments or saving is the best bet. Tying it up long term would be foolish if it lets debt pile up. Once you've got a steady income, then you can start thinking long term investment. My $0.02.

I agree with this. Instead of locking up all of it in an investment that you can't touch (without penalty), keep some of it around for emergencies. I would hold back 1-2k of it, then put the rest into something like a Roth IRA. Roths are amazing if you have a long time to wait, since it's all tax free growth. You still need some of it readily accessible, though, to handle anything that pops up, especially if you are getting close to graduation.

 

[ucfgrad93]

Another vote for paying off any debt you might have. I would personally keep the rest in just a savings account until you finish college. You never know what sort of emergencies could crop up.