I am 17 years old, 18 in the summer, and will be attending Duke University in the fall for just about $37,000-a-year. My financial aid package gives me about $5,500 in grants, $1,800 in work-study, and another $5,000 in loans. My parents are taking out a PLUS loan to cover the rest of the tuition. I would like to start investing now so i can have some money available to me when i graduate. I am interested in something with a high return, but not too volatile for the short-run. Can you give me some investing advice? Or should i be looking into IRA's or something else in the long-run?
Not to discourage you, but when you post questions, you sometimes get opinionated answers. To wit:If you have money to invest in a retirement or other account, you should use it to reduce your or your parents' loans (especially the latter).As for investing, either now or in the future, take the time to read some of the educational postings available on this site. There is no such thing as an investment with a fairly certain high return, but low short-term volatility.Hastings
Not to be rude, but I would be working my butt off over the summer so that my parents would not have to borrow as much for my tuition. PLUS loans begin repayment immediately and can create a financial burden to your parents.The more cash you can pay towards your education is les in loans that you and your parents have to repay later. The stock market is a long term investment, not four years from now when you graduate; besides the income you earn over the summer will affect future financial aid calculations.Finally, if you are deadset for putting the money you earn away for graduation then your best investment would be the Roth IRA. This IRA type allows for contributions to be removed at any time tax-free. The drawback of this IRA type is that it does not reduce your earnings for the year.good luck and study hard,Jenn
Let's see...$37,000 in tuitionless $12,300 ($5,500 in grants + $1800 workstudy + $5000 loans)leaves $24,700 for your parents to cover with that PLUS loan. Ouch.Times four years, that means $20,000 in loans for you and $98,800 in PLUS loans for your parents. (Of course, since tuition will go up the actual amount will be more.)Your best bet is to use any extra money you can earn to reduce your and your parents' debt NOW -- you and they get an immediate return. Or did you plan to graduate with a nice little nestegg and your parents deep in the hole?
Wow. I thought my college was expensive. Anyway, I agree with the previous posters, in that you shouldn't worry so much about your retirement savings. Rather, concentrate more on raising and using cash as wisely as possible. That means, putting aside money needed for necessities (living expenses during college) and towards tuition. A couple of mistakes I think many (including myself) college students make/made:1) Credit card(s)2) "$35,000/ year is a TON of money - I'll easily be able to pay off those student loans within a year or two"Best of luck - you picked a fine institution.LaMar
Duke NROTC might help take care of those costs for you. You could give it a shot as a non scholarship member the first year and see how it works out. If all goes well, you can apply for a scholarship...of course there is that matter of service time after you graduate.Pritch
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