spend or save?

[anystream]

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i've saved up some money while working since graduation. i was going to use it to pay for some living expenses while in med school, but now i am considering using it to do some traveling this summer. i'm wondering if this is a good idea... what's a couple thousand more in loans if i'm going to be in a lot of debt anyway? and this might be my last chance to travel for awhile... or do you think i'll appreciate it once i start school? what do you all think?

 

[angietron3000]

i've saved up some money while working since graduation. i was going to use it to pay for some living expenses while in med school, but now i am considering using it to do some traveling this summer. i'm wondering if this is a good idea... what's a couple thousand more in loans if i'm going to be in a lot of debt anyway? and this might be my last chance to travel for awhile... or do you think i'll appreciate it once i start school? what do you all think?

go somewhere, have fun, never regret it.

 

[Wookey]

Consider how much you're going to spend and the interest you'll have to pay. I think usually you pay 2x as much as you borrow if you take 20 yrs to pay it. Say if you spend 3k on a trip now then you may end up paying 6k later. If you spend 1k then pay 2k later over 20 yrs probably isn't a big deal. So it depends on how a big a spending spree you have in mind 🙂

 

[diosa428]

i've saved up some money while working since graduation. i was going to use it to pay for some living expenses while in med school, but now i am considering using it to do some traveling this summer. i'm wondering if this is a good idea... what's a couple thousand more in loans if i'm going to be in a lot of debt anyway? and this might be my last chance to travel for awhile... or do you think i'll appreciate it once i start school? what do you all think?

If you have money in a bank account you will have to put it on your applications for financial aid and then the med schools will just assume you can contribute that amount to your tuition and give you less aid. Spend it.

 

[adiddas125]

If you have money in a bank account you will have to put it on your applications for financial aid and then the med schools will just assume you can contribute that amount to your tuition and give you less aid. Spend it.

Just buy a Macbook or a Macbook Pro with a 30" display, along with a ram and 120GB 7200RPM HDD upgrade. That is $ worth spending. 🙂

 

[MEG@COOL]

dont do either option. they both sound dangerous

 

[strawberryfield]

Travel!
You'll never forget it (as said above)! I wish I had the $ to do that!

 

[kyidmnmaiv]

Travel! You may never get the chance again, so definitely take it.

 

[sheepunite]

travel some and then chuck the rest into a roth ira.

 

[peace84]

definitely travel while you still can

 

[rajad10]

donate it all to a charity of choice


ok, maybe not

 

[mammoth22]

spend it and have a great time....there's nothing better than traveling!!!

 

[etf]

travel some and then chuck the rest into a roth ira.

agreed. stash $2500 into an international mutual fund (fidelity international discovery, t rowe price international discovery), and let marinate for several decades. you'll thank me when your 70. spend the rest on a trip.

 

[anystream]

thanks for all the advice everyone

how can i learn more about investing? i have some money in an equity fund, but it doesn't seem to be doing much.

 

[pnasty]

best way to learn is to do it....there are websites where you can invest 100,000 of fake money. my parents made me do it while i was in middle school, and its pretty good practice for now

 

[etf]

best way to learn is don't - dump all your money into mutual funds, and let others do work for you

 

[pnasty]

i believe his question was how can he learn...

i worked for a mutual fund before, and i dont know if you have experience with them, but they arent that great. There are probably only four managers in the country who have consistently beat the S&P 500, and thats not even a good measure of the market anymore. Ask a money manager to sign a contract saying they will beat interest rates + inflation, and see what they say. As an individual, however, you can learn to do this because you can control your own risk/reward

 

[SanDiegoSOD]

I would say to forget about investing it and use it for some summer fun. Think about the current value of say, $3000, compared to $3000 + interest several years down the road. One way to think about it is to say that when you are in over $100,000 worth of debt, that extra few thousand won't seem all that valuable. I think a better way to look at it is to realize that when you're a practicing doc and making $150k+ right out of residency, the marginal value of the additional amount you're paying back in loans is next to nothing ($3k paid over 20 years at a reasonable interest rate would cost you about $28/month in loan payments). The marginal value of a few thousand $$$ right now, however, is fairly significant, considering it could mean an entire month of living like a king (queen 😉) in South America before spending several years as broke-a** and tired medical student. So I say go for it, spend it now when a couple thousand is truly worth a lot to you, don't save it for when it's just a drop in the bucket (and you're too busy to spend it anyways 😀)

 

[etf]

i believe his question was how can he learn...

i worked for a mutual fund before, and i dont know if you have experience with them, but they arent that great. There are probably only four managers in the country who have consistently beat the S&P 500, and thats not even a good measure of the market anymore. Ask a money manager to sign a contract saying they will beat interest rates + inflation, and see what they say. As an individual, however, you can learn to do this because you can control your own risk/reward

I don't know what fund company you worked for, but it obviously wasn't a good one:

Vanguard Primecap fund (sadly it's closed) : 15.60% annual return since it's inception in 1984.
Fidelity Leveraged company stock fund: 24.88% annual return for the life of fund (granted that means since 2000, but still..)

these aren't even highly focused sector funds or anything; they're funds that could serve as the core of your portfolio. i realize i only gave two examples, but that's because these are funds i have experience with (own) - you can find similarly decent funds at other companies. trying to beat the market and controlling your own risk/reward isn't a good idea, because you probably aren't willing to the homework necessary to do so. you might get lucky once in a while, but i think most people would be better off stashing their money in "good" mutual funds.

as for the value of a couple grand not being much, consider the example of hansen's natural soda. $5000 invested in this company 10 years ago would be worth over $1M today (if you had the discipline to let it grow; i know i wouldn't!) obviously none of us are probably going to hit a home run like this, but at least the possibility is there. lol, so i guess my point is, go with mutual funds, but maybe pick a few individual issues that you have done a lot of research on....

 

[SanDiegoSOD]

as for the value of a couple grand not being much, consider the example of hansen's natural soda. $5000 invested in this company 10 years ago would be worth over $1M today (if you had the discipline to let it grow; i know i wouldn't!) obviously none of us are probably going to hit a home run like this, but at least the possibility is there. lol, so i guess my point is, go with mutual funds, but maybe pick a few individual issues that you have done a lot of research on....

$5000 invested in Yahoo! in 1994 was worth a few trillion in 1999. You're damn right that none of us would hit a homerun like Hansen, except through absolute dumb luck, or insider information coupled with absolute dumb luck.