$30,000 loan

theubernoob · 10-16-2008, 12:32 PM

i will be receiving one soon and was thinking about dumping it all into stocks.

advice?

youknowit546 · 10-16-2008, 12:35 PM

Does that really sound smart to you at the moment?

Xi Troll 13 · 10-16-2008, 12:43 PM

This is the time to buy, isn't it?

youknowit546 · 10-16-2008, 12:49 PM

It could also be a time to lose a ****load of money that you have no way to pay back.

t_mo (Banned) · 10-16-2008, 08:03 PM

That is complete stupidity.

GenericFactoryTeam28 · 10-16-2008, 08:13 PM

What bank is giving out 30k for you to invest?

theubernoob · 10-16-2008, 11:32 PM

Quote:

Originally Posted by GenericFactoryTeam28

What bank is giving out 30k for you to invest?

navy federal

theubernoob · 10-16-2008, 11:33 PM

Quote:

Originally Posted by Xi Troll 13

This is the time to buy, isn't it?

thats what i was thinkin.

GenericFactoryTeam28 · 10-16-2008, 11:52 PM

Do you not need something real to get a loan for....can you really just get a loan to invest in the stock market? This sounds like a terrible idea.

theubernoob · 10-16-2008, 11:56 PM

its some deal they have with our school

junior year navy federal gives us a 30k loan and senior year usaa gives us a 30k loan both at like 1% interest.

i could put it in a cd or something and make like 3%, but i think i could make more in the stock market

caliro121 · 10-17-2008, 12:17 AM

Quote:

Originally Posted by t_mo

That is complete stupidity.

[/thread]

Nocturnal Terror · 10-17-2008, 01:00 AM

The stock market is like gambling. It's the same as going to Vegas and losing it all there. What do you need that money for anyway? You gotta pay it back somehow...

theubernoob · 10-17-2008, 06:10 AM

its at 1% interest..... the only way i lose money is if i don't do anything with it or just buy a bunch of **** with it

Calin · 10-17-2008, 12:00 PM

Quote:

Originally Posted by t_mo

That is complete stupidity.

I don't think this is a stupid idea. Because...

Quote:

Originally Posted by theubernoob

its at 1% interest..... the only way i lose money is if i don't do anything with it or just buy a bunch of **** with it

He is borrowing at 1%.

Why not buy something stable and safe. You can ladder out CD's. And eventually get a safe stable 4% return on that money. If you are borrowing at 1% and you invest for a guaranteed 4% they are paying you 3% for doing nothing. Sounds like a great deal to me.

Or find some other stable fixed income. All the stories you hear on this website is about people's 'winner's no one talks in depth about their 'losers'. Or at least the big 'losers' Reading about how someone bought something at the absolute low and sold it at the relative high is a dream that everyone wants and you have to be lucky to nail.

Anyhow, I'd do CD's, Bond's maybe preferred stocks. Or you can pick up some stable stocks that pay a dividend and won't be cutting it or eliminating it soon. This way you will always have enough to cover your loan interest rate.

LAWL didn't read that he already said CD's. But the thing you might want to do with the CD idea is to ladder them out so you'll have access to your money every 3 months.

If you want to be slightly more risky, get into the preferred stocks. Look at BAC.d or ADM.a. I don't know if those are the symbols for your security look up sometimes its BAC-d or sometimes its BAC d or BAC prd. Depends on what system you are using.

berry_wendel · 10-17-2008, 01:13 PM

He said it was stupid because he wanted to put it into the market. And you know the OP was thinking along the lines of buying popular stocks right now. He def. wasn't thinking about preferred stock or anything like that.
You don't want to put it in the market as the timeline for return with safe stocks (high yield quality companies) would be years. I dont know when the loan needs to be repaid but prolly before that.
But I like the thinking of the above poster, trying to gain maybe an eztra 5%

theubernoob · 10-17-2008, 04:17 PM

nah i wasn't thinking about preferred stocks. i was thinking along the lines of prudential and apple but i haven't done too much research and i'm not well educated on preferred stocks.

Laddering out CDs is a good idea, i didn't even think of that. The thing is i'll make 3,000 tops overall. a free 3 grand is cool and all, but that isn't that much. frankly, i want a lot more.

I was also thinking about buying a house. thoughts on that?

berry_wendel · 10-17-2008, 04:48 PM

Quote:

Originally Posted by theubernoob

nah i wasn't thinking about preferred stocks. i was thinking along the lines of prudential and apple but i haven't done too much research and i'm not well educated on preferred stocks.

Laddering out CDs is a good idea, i didn't even think of that. The thing is i'll make 3,000 tops overall. a free 3 grand is cool and all, but that isn't that much. frankly, i want a lot more.

I was also thinking about buying a house. thoughts on that?

There is no demand for housing.
Sure, everyone wants more, but that is not your money. You have to repay that money. To get the chance of a greater reward you need to take on greater risk. It could be a very real scenario that you put that 30,000 into common stock and you get 0% return over or worse over the course of the investment. Buying stock doesn't automatically mean that you will gain money.
10% return is pretty damn good for little risk. (if 10% return is a realistic forecast for that investment)

theubernoob · 10-17-2008, 05:21 PM

houses are cheap as hell right now and i figured i could rent it out, move in when i'm done with school, and then move out when i've got a steady cash flow from work

Calin · 10-17-2008, 06:22 PM

Well the more return on your money you want the more risk you will incur. There are no riskless investments.

Quite frankly I can offer a 100% return on your money for a small fee, but you will also realize that you could also lose your *** on it.

On a more serious note, sit down figure out what return you are looking for, then figure out whats realistic and how much attention you want to put into it.

If you think you can use the volatility to make money in the markets, sure you can. But the chances are you will owe 30k. No matter what anyone tells you there is no safe investment if you are looking for huge returns on your money.

SGTspazzo · 10-18-2008, 02:51 AM

I would dump mabe a 5 grand into it right now. Although now is the time to buy, The stocks can still go down. But eventially they will rise up agian.

morreo · 10-18-2008, 08:38 AM

It is not smart to enter the market on borrowed money.

I DO agree that CD's and preferred stocks are fine investments.

If you want to enter the market no matter what, then you MUST hedge your investment. You MUST write off covered calls against any and all shares you buy or you MUST buy puts. Both of these hedging strategies still give a good amount of risk so in my opinion, preferred stocks are your best option.

As for buying a house and renting it off, I disagree on that too. Then you are just borrowing money to buy something that you need to borrow more money on. How the hell do you think we got into this mess that we call the economy? Plus you won't get rent that is more than the mortgage, hence you will be paying more money out of your pocket and you may not be able to sell the home when your loan is due. (YES THAT'S A HUGE RISK!)