As the title says I have about $10k in the bank. I want to make it grow so I can build a house on 50 or so acres when i'm done with college in about 5 years. I have a $3,000 CD @4.65% but I was wondering if I get get more out of it? I talked to Extraco (my bank) they can make my $10k TURN 8% YEARLY.
Anyone have any advise for a 21 year old college student working two jobs
Thanks fellas
Dustin
PS I make regular deposits af about $250-$500 monthly( any money I don't spend/need elsewhere)

 

No advice but know the rule of 72.


72 divided by the interest is how often the money doubles.

To make $160,000 out of your 10K in 5.2 years you'll need to earn aprox 58% interest.

 

The only way I can think of to get the money you want in the time frame you have is to try and invest in stocks and hope you hit a good one that goes up..

 

Realistically, you can't get there with any reasonable investment. But, you can get to a pretty good down payment -- especially if you are banking at the rate that you claim.

Your banker will be glad to help you figure out what you're looking at with various options -- because he/she will want to have your business. You can also check out the financial functions in Excel. FV shows the future value of a series of payments. For some reason the answers are sometimes negative -- although they're the right value.

Also, the interest rates are generally yearly. If you want to do calculations by the month, you have to divide the interest rate by 12.

8% /year is pretty good with today's rates. Trying for a big score involves a lot of risk. If you want to take a risk, you should know a lot about what you're getting into.

I'm no financial guy, and this advice is worth what you're paying for it.

Good Luck!

ford2go

 

1. Do a self-check: Is whatever you're doing to earn this money also allowing you to achieve your maximum potential at college? For most people the best early-life investment they can make is in themselves and their education to open the highest level doors possible and maximize thir future earning potential.

2. If earning this money is not interfering with that, then just stick with that until college is done and sock it away. Try some diversification - most in bonds, some in blue chip stocks, and a little (that's a little) gambled on some higher risk stocks. At your savings rate you should end up with ~$30k - ~$35k in 5 years.

3. Once out of school, don't get impatient and blow it. Few people jump straight to the hobby farm with the custom home. In fact most wait decades for that. Get a good job. Drive a used car, don't get suckered into a new one. Then shop very carefully for a fixer-upper in an up and coming area. Take a couple of years to fix it up real nice within your budgetary means. Do most of the work yourself but consult with professionals like real estate agents on where to best spend your reno dollars. Hold onto that house for a few years to let value build up. You will likely have jumped to ~$70 to ~$100k personal net worth by then.

You might at that point reasonably go looking for your hobby farm site, but more likely you'll have one more house to go through first. In either case, that means the custom home on 50 acres by age ~35, which is pretty darn good for someone not starting with a pile of dad's money.

In the meantime, your purpose driven lifestyle also serves to sort the women you meet. Those that would prefer you drive a flashy new car and spend your money on taking them to expensive restaurants are the plague, or weekenders at best. You'll see quality when a girl is turned on by your good sense, stability and future prospects..

 

Excellent advice- Keep your head down, your eyes on the road, and don't get distracted by the moneygrubbers. I lost seven years of my life to that, now that I'm scraping bottom I have finally found a wonderful woman who supports me and my goals. If you have someone around you who doesn't believe in your abilities, or laughs at your goals, they are not worth your time.

 

thank you guys, very much for that well thought advise. I work 60 hours a week and maintain (sp) a 4.0 with 9 credit hours. The drive to get there is strong I hear ya about the relationship advise ya that is one reason I stay single- til I get the house/proporty then I'll start looking. Ya the 99 ZX2 is running great with 145k miles probably get another 145k out of it before it gets sold.

 

I agree with most of your post, Fred, but are you suggesting that Dustin can triple his money in five years, or would it require him to continue to invest throughout the same time frame? I would suggest mutual funds with a solid track record, though, to lessen the risk. Sage advice, though, as usual.

Dustin, whenever you think you've found Miss Right, all you need to do is read your sig! Seriously, though, you know how to maintain your own vehicle and seem like someone who doesn't mind driving a used car, so keep doing what you've been doing, and be proud of that older vehicle. There is just something undescribable about driving a vehicle that has no note attached.

 

No - he's already got $10k, and says he saves minimum $250/mo = $3,000/yr and will be done college in 5 years. $10k + (5 x $3k) + (interest during those 5 years) =~ $30k~$35k.

 

Oh, I see. That was a case of "Knowing the answer before hearing the entire question." Thanks. Still good advice from you, though.

Stu

 

Since you are on this board, I will assume a passing working knowledge of cars. Look into buying cheap cars (automatic with A/C - older V-8 RWD are ideal) and renting them out by the week. You can't go wrong with a Crown Vic. YOU must assume weekly fluid checks.

They sell devices that can disable a car if user does not enter a new code every week. They don't pay, they don't get the code. You go get the car.

If you make a total profit of $25-50 a week renting for $50-$100 a week on an original $2000 inventment that is far better then any stock or fund.

Just an idea of how to make money faster if you do not have enough to buy property.


Or learn how to rebuild a popular transmission likely to fail. Ex: The A4LD in Explorers. Buy the vehicle for $300-$500. Rebuild yourself ($400 in parts) and sell for $2000 or less. I find $1200 is the ideal selling point for cheap cars.

 

I re read your post fred 3 times and I can say I hear what you are saying I have been dealing with that, for this reason I have been single and don't mind it, knowing what I'm doing with my life. I care for the people in my life and have been there serving as a shoulder to cry on for friends, a designated driver for others I am the type to change someone's tire, or give the a ride to a gas station (several times). I will not let the money or my goals get in the way of who I am as a friend or as a person. I joke with people and try to answer thier questions as to what my medical condition is. I find that most people I come in contact with are "curious" about me but don't know how to go about asking, I truly don't know all of it myself. I could save more if I wanted to mooch off the government, but I have to much pride for that and don't respect abled bodies that do

 

my advice is to listen to everyones sales pitch with investments but dont sign anything. Make sure you get an investment with moderate risk but one with a proven track record. Stocks in themselves arent the best but mutual funds invest in a group of stocks. you want something more across the boards than one that specializes in lest say tech stocks or one specific kind of stock.. right now i heard that stocks are down and gold is the thing that over a long investment is the right investment.
REETS used to be good but since the bottom fell out of the real estate market its not as good as it once was. Try to talk to good solid investment companies who have been around a while and make sure you get up front in writing what all the fees and charges are some like to nickle and dime to death. Also check into municipal bonds those seem to have less of a risk as lets say utility bonds and all

of course you can follow jeff foxworthys redneck advice and thats take half the money and bury it in a mason jar in the back yard and take the other half to the dog track and bet it on the dog that does its business just before the race.. thats diversifying your investments...

 

Your tag doesn't say where you live, but since you're going to be in school for a few years, I wonder about finding a 2 bedroom place (small house, condo, or duplex) to buy and live in,and rent out the other room.

More people (my sister included ) are buying condos or duplexes for their kids to live in during college, and they rent the other half to students (a ready source of renters). Depending on location it costs the same or less than paying for rental housing.

Being a landlord is not for everyone, but it's a great way of using other people's money to build your wealth. My in-laws have many shortcomings, but my hat is off to them for starting small, and in 20 or so years they became millionaires, and they did most of it through real estate. Not bad for a concrete salesman and a "at-home" wife.

If you live in an area where the 10k could serve as a down payment, and the $250-$500 you are generating monthly for savings pays your part of the rent/mortgage and the rest can be picked up by the renter, then you have both your money and his/hers going towards your investment. It doesn't really matter if the place goes up in value (you and your renter are building your equity), and better yet if it does.

Depending on how real estate is going in your area, you might consider one of the adjustable loans that are fixed for 5 years, then adjust up...but you either re-fi or sell first. Those loans can be tricky but they are meant for short-timers.

One good place for mortgage info is Jack Guttentag, the "Mortgage Professor". his site is:
http://www.mtgprofessor.com/
He also shows how with one extra payment a year, you can pay off faster.

After graduation, you can either sell the place (hopefully for a profit) or rent it out, letting other folks build your equity. You'd then also have equity built up for leverage for other investments, like the 50 acre place.