Stock brokers, investors and bankers enter here...

[greek by injection]

Real estate will not do you any good unless you can afford the repayments. Are you currently working or studying?

Real Estate is the best long term investment because you always have an underlying asset that you can sell. Stocks are paper money and there is no underlying asset as such. If a company goes bust, your stock certificate is worth zero.

Put $5,000 in a mutual find and leave $5,000 in a term deposit that gets you a decent amount of interest. Put an extra $100 to $200 a month if you can into the mutual fund.

When you have saved a decent deposit (at least 15-20%) take your money out and buy a property.

Studying,.... but I may be leaning toward Real estate b/c my mom is a realtor and I have many friends that have offered great investment options.....

 

[mrbill]

Pineapple...first max out your Roth IRA like others have suggested. A couple of mistakes others have stated that you should be aware of:

1) The limit for 2002 is $3000 per year unless you are over 50 and then it is $3500

2) The age when you may start withdrawing the money without penalty is 59 1/2 years old, not 65 like someone else said.

If you want detailed information on this you can read IRS publication 590 which goes into detail on IRA's.

As for the rest of the money it is hard to give specific advice without knowing your risk tolerance. If you are a high income individual you should consider municipal bonds as they are tax free. If you are going to invest in a mutual fund give serious consideration to an index fund as they outperform about 90% of the actively managed funds. There are many other options but this is some of the basics.

 

[vinylgroover]

Studying,.... but I may be leaning toward Real estate b/c my mom is a realtor and I have many friends that have offered great investment options.....

Unlike stocks and cash, real estate requires cashflow. Unless you're working and earning money, you will find it difficult to meet the mortgage repayments on the property. Your parents will also have to guarantee your loan, otherwise the bank will not lend you the money to buy without a regular income.

Real Estate is the way to go, but you want to buy when you can afford it. Keep saving to build up your deposit. When you leave uni or college and get a job, you will then be able to put your deposit down and be more equipped meet the repayments.

If you can save another few grand while you study, it means you will need to borrow less which will save you alot in interest when you take out your loan.

 

[greek by injection]

Unlike stocks and cash, real estate requires cashflow. Unless you're working and earning money, you will find it difficult to meet the mortgage repayments on the property. Your parents will also have to guarantee your loan, otherwise the bank will not lend you the money to buy without a regular income.

Real Estate is the way to go, but you want to buy when you can afford it. Keep saving to build up your deposit. When you leave uni or college and get a job, you will then be able to put your deposit down and be more equipped meet the repayments.

If you can save another few grand while you study, it means you will need to borrow less which will save you alot in interest when you take out your loan.

exactly when i get out of the miltary in 4 years i'll have plenty of cashflow saved up!

 

[greek by injection]

stay away from stock brokers and investment bankers. these days i would be very careful and stick with low risk investments. i have been anally raped by the market for the last 5 years or so and i am completely sick of it. maybe it will pick up in a couple of years and ill get back into it but now i am a bitter. i am sour and i am bitter. the investment banker should have given me a free tub of vaseline along with his brilliant advice.

to the tune of CSCO, SUNW, JDSU?

 

[VicTusDeuS]

The 3% downpayment is only for first time buyers and around here according to my lawyer its hard to get that unless you are a minority. Also, many of those rental properties can be considered commerical (4 family and up), which is then a 25% down payment.

If he were to get the 3% downpayment, in addition to the mortgage he would have to also get mortgage insurance which is required unless you put 20% down. Or until you pay off 20% of the original loan.

In theory he can get up to a $300,000.00 rental property on the $10,000. But that doesnt leave him any extra cash for anything that may come up. Obviously with only 3% down his monthly payments are going to be higher. What if one of his renters doesnt pay and he has to fit the bill?

The commercial downpayment rules might be different in other states but in NJ the norm is 25%. You also need to get that mortgage insurance for anything less than 20%...And if you fit into the firt time buyer with the 3% downpayment, i think you must live in the home you buy...Im not sure of the other rules, but it isnt as easy as Don Lupree or whatever that guys name was who's on TV at 3AM makes it out to be.

 

[huntmaster]

real estate

 

[Pineapple Devil]

I'm reading into all these things, but for now I'm just going to take 11k and put it in my credit union to gain some interest until I decide on what to do with it.

 

[Rockafella Skank]

The 3% downpayment is only for first time buyers and around here according to my lawyer its hard to get that unless you are a minority.

Just because it's HUD doesn't mean that only minorities qualify. HUD's job is to put people in homes, regardless of minority status. Further, any lending bank is going to set its own terms. I have several friends -- none of them minorities -- who bought their houses with zero down.

Pineapple Devil: As for investing ... go with a combination of low, moderate and high risk investments. You're young enough you can afford some risk. I agree that mutual funds are a pretty safe bet, but stick with index funds as they have usually performed better than managed funds. They're also, as a general rule, cheaper in terms of fees and expense costs. Don't be afraid of stocks. Stick with companies you know ... if you don't understand what they do or can't explain it to a friend, then don't bother. The stock market has produced historical returns of about 11%-12% annually over the last 70 years. Sure, some years are better than others, but 11%-12% is pretty darned good.

If you do decide to consult a financial professional, do your due diligence. There are good people out there who can help, but don't ever give up control by accepting stock tips or whatever. Have them help you with strategy. Avoid American Express Financial and any other firm with proprietary products if you can. Both Edward Jones and A. G. Edwards are run with the highest integrity, are fiercely independent, and staunchly conservative. A pretty good troika when it comes to investing.