- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
re: Advice for college student.
Posted on 5/25/12 at 11:01 am to LSUTigers00884
Posted on 5/25/12 at 11:01 am to LSUTigers00884
As everyone has said - keep the sonata
And I agree that you should not spend it. But i personally don't think the IRA is the way to go.
From personal experience, I saved some money in high school and opened a Roth IRA on my 18th birthday with it. I don't necessarily regret it, but it would have been nice to have that cash a little more liquid. Granted, you won't get the tax protection of a Roth, but at your level of income, I don't think that is a big deal at all.
Either put it in a savings account or open an online brokerage account and buy some funds with the money. Then, if you ever need a little extra money or decide you want to take a graduation trip to Europe or something, you can always pull it out and not worry about the penalty that you would have with a Roth IRA. If you never need it, then put it towards a down payment on your first house or something like that.
Basically, save it but have it liquid.
And I agree that you should not spend it. But i personally don't think the IRA is the way to go.
From personal experience, I saved some money in high school and opened a Roth IRA on my 18th birthday with it. I don't necessarily regret it, but it would have been nice to have that cash a little more liquid. Granted, you won't get the tax protection of a Roth, but at your level of income, I don't think that is a big deal at all.
Either put it in a savings account or open an online brokerage account and buy some funds with the money. Then, if you ever need a little extra money or decide you want to take a graduation trip to Europe or something, you can always pull it out and not worry about the penalty that you would have with a Roth IRA. If you never need it, then put it towards a down payment on your first house or something like that.
Basically, save it but have it liquid.
3
Posted on 5/25/12 at 11:07 am to LSUTigers00884
It's been a while, so I'm really not familiar w/ what Etrade offers for their Roth IRAs now. I went w/ them at the time because their was no minimum on initial investment.
A roth is a retirement account that is created using after tax income. There is no tax on the gains when you are ready to pull your money out for retirement, buying your first house, higher education, and a couple of other things I believe.
There is also no penalty to pull out your contributions at any time, but you will be taxed on any investment earnings if you pull out more than you contributed.
A roth is a retirement account that is created using after tax income. There is no tax on the gains when you are ready to pull your money out for retirement, buying your first house, higher education, and a couple of other things I believe.
There is also no penalty to pull out your contributions at any time, but you will be taxed on any investment earnings if you pull out more than you contributed.
This post was edited on 5/25/12 at 11:12 am
Posted on 5/25/12 at 11:09 am to kennypowers816
quote:
savings account
those collect like no interest. Am i wrong?
quote:
online brokerage account and buy some funds
more details? Did you do this? speak from experience?
I also thought Roth IRA's didn't have penalties on early withdrawal on a 5 year plan.
Posted on 5/25/12 at 11:11 am to kennypowers816
quote:
hen, if you ever need a little extra money or decide you want to take a graduation trip to Europe or something, you can always pull it out and not worry about the penalty that you would have with a Roth IRA.
I'm not with you.
I pulled money out of my roth and it was in my checking account in 3 or 4 days. If you need immediate emergency funds get a CC and put in sock drawer.
If you wanted to go to Europe and pulled out your contributions there is still no penalty. Online brokerages offer the ability to transfer and access funds pretty quickly these days.
It's not cash, but it doesn't take long to convert it to.
Posted on 5/25/12 at 11:13 am to LSUAfro
quote:
taxed on investment earnings
yeah but it won't be much in my case.
been doing some research-- are dividend reinvestment programs (DRIP) good?
Thus far,
Roth IRA
Savings (maybe find 2% online somewhere?? Any recommendations?)
DRIP... possibly after feedback.
Posted on 5/25/12 at 12:22 pm to LSUTigers00884
bump.
Posted on 5/25/12 at 12:57 pm to LSUTigers00884
quote:
If you wanted to go to Europe and pulled out your contributions there is still no penalty.
Are you sure about this? ETA: nevermind, you're correct. Not sure why, but I wasn't aware of this but just looked it up.
OP - remember this: a Roth IRA is basically just a tax sheltered account. You can still do whatever you want with the money. Examples: Let it sit in a money market account or CD, invest in equities, mutual funds, etc.
You are correct that savings accounts earn next to nothing right now. You might find 1% if you're lucky it seems. But my point is that an IRA does not guarantee any amount of appreciation. You could potentially earn some money on it if you invested in some equities (either in a normal investment account or a Roth IRA), but you could also lose some money as well. Does that make sense?
Also, I won't pretend to recommend stocks or funds for you, but others might be able to.
This post was edited on 5/25/12 at 1:02 pm
Posted on 5/25/12 at 1:01 pm to kennypowers816
quote:
Granted, you won't get the tax protection of a Roth, but at your level of income, I don't think that is a big deal at all.
That's the whole point, his level of income is likely the lowest it'll ever be (well, hopefully, at least pre-retirement) and Roth IRA contributions are after-tax.
I would definitely contribute to a Roth IRA in a mutual fund weighted toward stocks if you still have some financial backing from your parents for catastrophic expenses, you can still keep some beer money but time is very valuable when it comes to long-term investing, even if the contributions are relatively paltry.
Posted on 5/25/12 at 1:07 pm to Dead Mike
Dead mike
You would invest in a Roth Ira mutual fund in my case? Maybe make 200-300$ over the next 3 years? Or is there a possibility to make more?
You would invest in a Roth Ira mutual fund in my case? Maybe make 200-300$ over the next 3 years? Or is there a possibility to make more?
Posted on 5/25/12 at 1:08 pm to kennypowers816
quote:
You are correct that savings accounts earn next to nothing right now. You might find 1% if you're lucky it seems. But my point is that an IRA does not guarantee any amount of appreciation. You could potentially earn some money on it if you invested in some equities (either in a normal investment account or a Roth IRA), but you could also lose some money as well. Does that make sense?
And inflation does guarantee depreciation. Your best bet to cultivate long-term growth when you can best recover from losses (not even approaching your prime earning years) is in equities (ideally a diverse grouping of equities in a consistently appreciating fund over the long haul).
Posted on 5/25/12 at 1:20 pm to LSUTigers00884
quote:
You would invest in a Roth Ira mutual fund in my case? Maybe make 200-300$ over the next 3 years? Or is there a possibility to make more?
I would at least heavily consider it, depending on how much you are responsible for your own expenses. I didn't open a Roth IRA in my college years and I don't regret it, because I probably would've been forced to pull some out of there by now due to financial responsibilities that I didn't foresee.
I wouldn't really focus much on how much you make in the next 3 years. It's more about what you accumulate in at least the next 10-20, and hopefully increasing your contributions over time. I figure it's best to start when you have the least financial responsibilities, assuming that you have parental support for anything major.
Page 2 of 2
Popular
Back to top
Follow TigerDroppings for LSU Football News