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Money isn't worth anything right now (beyond its face value) because we have extremely low interest rates at this time. I would suggest using it to buy some sto

by drcode 14y ago

Money isn't worth anything right now (beyond its face value) because we have extremely low interest rates at this time. I would suggest using it to buy some stocks in a sector you have some understanding about. If it goes well, you will know a place you can put money in the future. (This only is feasible if you can afford to lose your $870 if it doesn't go well.) Also, if you have any debt at all (school loans, etc.) you can probably make a better percentage profit paying your debt off early than you can in any other way.

elliott99 14y ago
If it's a government college loan, the interest rate is like 5%, and mutual funds are giving more than that right now...so technicallly speaking...I don't know how quick I'd say that
- drcode 14y ago
  Where is there a mutual fund giving more than 5%?
  - adient 14y ago
    Did you even try to research this yourself? There are many mutual funds that have 20%+ YTD. It's typically recommended to invest before paying off debt like student loans/mortgages because you're likely to make more investing than what you'd save on interest.
    - drcode 14y ago
      You're talking about historical returns of 20% which have little bearing on future returns. (This is finance 101 stuff, let me know if you need a link that explains it to you) Paying off a 5% interest debt gives a guaranteed return. Sounds like you're the perfect candidate for the next Bernie Madoff... he guaranteed future returns of >10% on his mutual funds :-) That said, a (heavily conditioned) case can be made for investing before paying off loans, as I did in my original comment for this thread.)
polyfractal 14y ago
This, although I would say that you are probably better off just investing in a low-fee index fund like Vanguard's Total Stock fund. Even if you have an understanding of a sector, most people are horrible investors and a simple index fund will out-perform them.

by drcode 14y ago

elliott99 14y ago

If it's a government college loan, the interest rate is like 5%, and mutual funds are giving more than that right now...so technicallly speaking...I don't know how quick I'd say that

drcode 14y ago
Where is there a mutual fund giving more than 5%?
- adient 14y ago
  Did you even try to research this yourself? There are many mutual funds that have 20%+ YTD. It's typically recommended to invest before paying off debt like student loans/mortgages because you're likely to make more investing than what you'd save on interest.
  - drcode 14y ago
    You're talking about historical returns of 20% which have little bearing on future returns. (This is finance 101 stuff, let me know if you need a link that explains it to you) Paying off a 5% interest debt gives a guaranteed return. Sounds like you're the perfect candidate for the next Bernie Madoff... he guaranteed future returns of >10% on his mutual funds :-) That said, a (heavily conditioned) case can be made for investing before paying off loans, as I did in my original comment for this thread.)

polyfractal 14y ago

This, although I would say that you are probably better off just investing in a low-fee index fund like Vanguard's Total Stock fund. Even if you have an understanding of a sector, most people are horrible investors and a simple index fund will out-perform them.