Investing for med students?

Start an online savings account like HSBC Direct or Emigrant Direct. You'll get better interest than your bank offers and it's pretty easy.

HMSBeagle said:

Hi, I wasn't sure where to put this thread so if this is not the right place I'm sorry. I have $800 and I don't know what to do with it. I live at home, and I have no student debt so basically my expenses are kept to a minimum. I have this $800 and I'd like to put that money to grow instead of putting it in a bank account where it will just sit there. I don't know if it is too little to do anything useful such as investing, so I'm asking for advice as whether online investing is possible with this amount of money.

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Or you could use that $800 to pay for 2 whole days of a medical school education!

CigarTragic said:

Or you could use that $800 to pay for 2 whole days of a medical school education!

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If you are eligible do a Roth IRA..definitely the best long term investment.

With 800$, (IMO) I'd look to dump it into a high-interest online savings account (mentioned above), or fill up a CD at a local bank. Although in both cases, the interest rates have dropped significantly. Either option will net you somewhere between 3-4% APY.

Otherwise, you may be able to jump into a mutual fund for 800$. More risk of course, and you'd have to be willing to potentially lose the money if you go this route.

If you're not feeling risky with your money, do as the above have said and put it into an online high-yield savings account or local CD. I think rates are 4.1% for online accounts, but it's much better than your typical local bank, which will usually only offer a rate slightly above inflation. You also have the ability to withdraw from that account at any time, unlike local CD accounts.

If you're feeling much risker, mutual fund or a money market fund is the way to go. $800 probably isn't enough for a decent investment in stocks, and they require a good bit of micromanagement as well.

annndyr said:

With 800$, (IMO) I'd look to dump it into a high-interest online savings account (mentioned above), or fill up a CD at a local bank. Although in both cases, the interest rates have dropped significantly. Either option will net you somewhere between 3-4% APY.

Otherwise, you may be able to jump into a mutual fund for 800$. More risk of course, and you'd have to be willing to potentially lose the money if you go this route.

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I'd check around just to make sure. There's a community credit union in my town where they're giving 6%(!!!) APY on CHECKING accounts. That's right, checking accounts. They require entirely electronic documents and the only reason I don't have it yet is because neither me nor my wife have direct deposit. Trying to find a way around it...

If I were you, I would...
open a Roth IRA
buy 1 share of GOOG and 1 share of GS or some other large cap growth that you researched.
follow these stocks religiously.
learn how to read a financial statement and earnings report.
listen to conference calls.
watch the swings (ie GOOG from $450 to $700 to $450 in one year).
understand the charts
learn about position sizing and risk.
don't sell
just follow your stocks and learn as much as you can about the markets.
remember that S&P 500 has a historical growth rate of ~11%.

Stocks are the way to go when you're young and can take on risk.

When you're a resident, you'll be able to add to your portfolio.
But learn to invest now so you'll know what to do once you start earning.
Even if you lose all $800 (unlikely), it will be a good learning experience.

if you only have $800 you should probably put it in a high interest savings account. If you're inclined and have the time, you can play around with the stock market using an online broker. A colleague of mine reads up on the msn financial and so fourth and he's done well.

If you've opened a roth that is the best to put the money in because once you start making money as a physician you cannot contribute any more. The problem is most IRAs require 2-4k minimum to open and if it isn't a roth, it's taxable..

TheMightyAngus said:

If I were you, I would...
open a Roth IRA
buy 1 share of GOOG and 1 share of GS or some other large cap growth that you researched.
follow these stocks religiously.
learn how to read a financial statement and earnings report.
listen to conference calls.
watch the swings (ie GOOG from $450 to $700 to $450 in one year).
understand the charts
learn about position sizing and risk.
don't sell
just follow your stocks and learn as much as you can about the markets.
remember that S&P 500 has a historical growth rate of ~11%.

Stocks are the way to go when you're young and can take on risk.

When you're a resident, you'll be able to add to your portfolio.
But learn to invest now so you'll know what to do once you start earning.
Even if you lose all $800 (unlikely), it will be a good learning experience.

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Individual stock trading and the costs associated with it are notoriously unprofitable. When considering individual vs. index funds/ETFs people always forget to consider the transaction costs, which easily make index funds and ETFs more profitable.

If I were you, Id open a Wells Fargo or Scottrade account and buy a broad domestic ETF (like SPY). Its much safer than buying a single share of a stock that is way way way overvalued (Google) and is much more likely to give you positive returns.

What I would do is first, decide if you're going for a long-term investment or just want to invest for a couple years.

Are you thinking about buying a car or starting a family? Things like that are all life events worth planning/saving for.

When I was learning about investing, I would always check out www.motleyfool.com. Also, reading books like Rich Dad, Poor Dad or Millionaire's Mind are a good start.

There's so much info out there, and so many possibilities, your best bet would be to educate yourself a little before rushing to put that 800 bucks "somewhere". Good luck!!!

doctorloans said:

What I would do is first, decide if you're going for a long-term investment or just want to invest for a couple years.

Are you thinking about buying a car or starting a family? Things like that are all life events worth planning/saving for.

When I was learning about investing, I would always check out www.motleyfool.com. Also, reading books like Rich Dad, Poor Dad or Millionaire's Mind are a good start.

There's so much info out there, and so many possibilities, your best bet would be to educate yourself a little before rushing to put that 800 bucks "somewhere". Good luck!!!

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Robert Kiyosaki is a fraud. A liar. He just wants to sell books, not genuinely educate people with truth.

TheMightyAngus said:

Stocks are the way to go when you're young and can take on risk.

Even if you lose all $800 (unlikely), it will be a good learning experience.

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actually, it's because we're young that we don't need to take risk. someone with a long time horizon has decades of compounding ahead of them, so even the "market average" is enough to turn a few thousand into a few million.

besides, you'd probably get tons more education giving the $800 to a homeless guy/gal for a few hours of their time. they could impart much life experience.

to get back to your original question, i'd put it in a high interest savings account like hsbc until i scraped together the $2500 minimum to open a fidelity account. or $3000 to open a vanguard account.

Depends on how much risk you want, the higher the risk the possibility of greater return. I'm in undergrad and currently debt free (scholarships,etc). I had about what you have and decided to invest in the market. I took some risky moves but as informed and educated as possible looking at charts, interpreting signals, statements, news, sec filings, etc and within a month or two I had a 500% gain.

But yeah, for basically no risk you can put in high interest savings with rates around 3.4%, used to be around 4.1% just a few months back but w/ economy and all.

Good Luck!

IMO you have 2 real options:

1) as mentioned, putting your money in an online high yield savings account or investing in short term CDs (i'd lean that direction as rates are going lower), and you can always get CDs for as little as ~6 months or even 3 months if you wanted.

You can always look at www.bankrate.com to get the most up to date rates on CDs and the timeframes.

2) Put the $$ in Euros (FXE), Canadian Dollars (FXC), or Oil (USO). Those are the ticker symbols in parentheses. The dollar is hitting all time lows, and will continue to do so. In addition we continue to cut rates (devalues the dollar even more and adds to inflationary problems), our budget deficits are out of control, our trade gaps continue to widen, oil is in such a global demand it's not even funny, and did I mention that the world uses (demand) more oil everyday than we can simply keep up with in production (supply).

IMO getting anything less than ~5% is basically letting your money deteriorate in value. Inflation is a lot higher than those fudged government statistics (that have finally started to tick up, thankfully).

In addition, over time as I see it foreign governments will only stock pile reserves of the US Dollar to a certain extent. The Euro is quickly becoming the strongest currency in the world and will most likely be the one that everything is tied to or backed by in the future (right now the price of all commodities are tied to the value of the dollar). Once that shift starts to make it more public, the dollar will decline even further, as countries will have less reason to hold dollars.

maxbaner said:

Depends on how much risk you want, the higher the risk the possibility of greater return. I'm in undergrad and currently debt free (scholarships,etc). I had about what you have and decided to invest in the market. I took some risky moves but as informed and educated as possible looking at charts, interpreting signals, statements, news, sec filings, etc and within a month or two I had a 500% gain.

But yeah, for basically no risk you can put in high interest savings with rates around 3.4%, used to be around 4.1% just a few months back but w/ economy and all.

Good Luck!

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your 500% gain had nothing to do with being educated about signals, statements, or anything. it was luck.

and as for foreign currency hedging and the like - first of all, no. second, we're talking about $800 here; how much purchasing power is s/he really going to lose to inflation before the money is spent? i think we tend to overanalyze things when it comes to money, and it's to our detriment.

You should learn personal finance instead of relying on advice from strangers on the internet. You can't make an educated decisino without knowing the basics of investing and so you should read a good relatively unbiased personal finane book (i recommend personal finance for dummies), to understand the theories of saving and whatnot.

p.s.
I'm nto disparaging anybody's advice here, I'm sure it's good advice (i didn't most of it so i can't comment on it), but there's going to be a difference in opinion/bias/etc.

etf said:

and as for foreign currency hedging and the like - first of all, no. second, we're talking about $800 here; how much purchasing power is s/he really going to lose to inflation before the money is spent? i think we tend to overanalyze things when it comes to money, and it's to our detriment.

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Well in theory he/she is trying to make money by putting it away... after all if you 'save' you do expect some kind of return on it.

By some estimations the M3 (total money supply) is increasing ~14% year over year. The fed no longer publishes this data and hasn't for a few years now (gee I wonder why).

IMO You need to be getting at least a 7-8% return this year (if not more) just to maintain your money's spending power.

With interest rates being so low, any return you get from a savings or money market account is going to fall well short of maintaining the value of your money (we're not even talking about increasing purchasing power here).

If anything, oil (USO) is the perfect hedge. IMO everyone should own some in their portfolio (if not the other commodities). In addition to the reasons mentioned above, oil (and all the commodities) are in a secular bull market.

800 is too small IMO to get any worthwhile gain

build a bigger bankroll.