47 votes

Smartest thing to do with 5-10k dollars?

I seek the wisdom of the great multitude of intelligent people that pass through this sacred place.

I'm a 20 year-old college student who has saved up 10k dollars over the past 5 years of working as a lifeguard. What is the smartest way to invest 5-10k to make some more money in the short term? I'm loathe to let it languish in a savings account and I would like to have some cushion money when I leave college to pay for loans and what not.

I appreciate any and all advice!

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And cheaper, and more useful for small, everyday transactions.

You can buy fractional gold coins, but at a substantial premium and thus not get as much "bang for your buck."

'Junk' silver or bullion - NOT numismatics or even American Silver Eagles, are the way to go if you want into PM's with 5-10k.

nope you can't eat it

nope you can't eat it either....

actually silver

has antibacterial properties

Silver will buy food. But

Silver will buy food. But buying a food storage or growing it yourself would also be good.

At a point silver will work

At a point silver will work but, again you have to survive to that point... typically governments have tried to put price controls in place causing stores not to stock... Not to mention stores won't have large rooms full of silver to buy stock with. Being able to survive these times will take much more than a metal.. as mentioned in another post lead may be far more useful than a precious metal. I feel for those who live in the cities. Way to many people and not enough to go around. I would suspect it will get very ugly.

Not to mention the bankers can dump metals on the market... lowering the prices.. print money and buy your silver for free at a very low price.... Ron Paul has the right idea... end the fed... They have everything fixed... Buffet can flood the market in silver anytime he feels the need.

There will be people right away who will take silver in payment.

Gold too. Guaranteed.

Only the major supermarkets will be slow to adopt this, and they'll be all raided and bare anyway.

Surviving the first couple of weeks to a month is critical. (timing depending on exact circumstances)

I think anyone talking about using silver or gold for money again in a collapse is already presuming the initial chaos and panic are over and half of the population is already dead or starving.

Anyone who is buying silver or gold and has no plans to survive 30 days or more without going to the grocery store, running water, and electricity among other things, is certainly not going to make it long enough to spend that metal anyway.

Keep in mind we did not get

Keep in mind we did not get to this point of collapse by accident. This collapse is a plan falling together. I really don't think the plan is for us to all end up trading our silver and gold.

Dollars will be obsolete. Invest in Open Source Ecology.

Good question. Go to www.opensourceecology.com. This is the future of the planet. It is a race against suppressives. This is the boots on the ground work.

Remember that the principle we follow via Gandhi is: non-violent, non-participation.

What Open Source Ecology is doing IS the work of non-participation. You will notice that we all scream and protest about the Federal Reserve.. but as long as we're using their Federal Reserve Notes, we're STILL PARTICIPATING.

Want to stop participating? Get involved in Open Source Ecology. You can start an internship. Your $5-10k will help you!!!!

check your link

it just takes you to a site selling domain names

I think you want to change it to .org instead of .com

I would go to flippa.com and

I would go to flippa.com and invest in a web property which can generate auto-recurring monthly fee's and has traffic from Google on a daily basis. A nice steady stream of income which will eventually pay you back for the $5 - $10k and continue to pull in more revenue.

i donno, i like my bitcoins

i donno, i like my bitcoins :), i would buy some more miners...

after power i make a good extra 1500 bucks a month on a ten k mining investment.

when we say r[evol]ution,we say it with love

Did you say "loans"?

Pay off any debt you have. Debt is the opposite of an investment and works like negative interest. Debt is a constant drain on future wealth - plug it up.

Don't go into debt for college - use your money to pay as you go & get a job or take an extra year or two or three to finish if you have to. The borrower is slave to the lender. Student loans should be an absolute last resort. Avoid them.

"For this is the will of God, that by doing good you should put to silence the ignorance of foolish people. Live as people who are free, not using your freedom as a cover-up for evil, but living as servants of God."
(1 Peter 2:15-16)

no way, not today

1990 = very good advice - 2012 = not so good

The dollar is going to collapse very soon and have it's day of reckoning - it's a mathematical certainty. Maybe it won't be this year or even next year but it's going to happen sooner or later. When that happens, this responsible hard worker will be so annoyed that he blew his savings on paying off debt or paying for school in full to avoid debt that will be wiped out with the dollar anyways (or just paid back with 1/10th of a piece of silver by then) instead of buying precious metals or investing in things that create cashflow that can later be converted to sound assets.

The creditors would love for you to spend all your hard-earned cash giving it to them for your loans so you have no cashflow or savings and will have to come to them again for another loan later when life happens because you're focusing on and worrying more about your liabilities than your assets.

I agree that if you can avoid getting into debt in the first place, then that's the best strategy. I'm not sure it's realistic, though, in 2012 for anyone to be able to get a college education without taking out a student loan, unfortunately.

And if the FRN doesn't collapse very soon? Then what?

Screwed!

Pay the debt off first. Always.

The only time you don't pay debt is DURING the actual collapse. Because odds are, you may not owe it to anyone coming out the other side.

And for the record, I would accumulate dollars. Those will not collapse. It's the FRNs PRETENDING to be dollars that you have to spend quickly because they lose their stated value.

invest in Arena Pharmaceuticals(ARNA) and GLD

Invest now while the market is up and during the QE3 then get your ass out before it collapses.

Your ticket to generational wealth

The dollar and the entire world financial system is on the verge of utter collapse. Take those paper rectangles, and buy over 300 ounces of physical silver coinage, and lock them down, and guard them with a gun. On the other side of what's to come, your purchasing power will have shot up so high, that it will be life-changing. Then...do whatever you want for the rest of your life.

Pay off debt first

My advice is to pay off debt before investing. Debt repayment gives you a guaranteed return (the interest that you no longer have to pay on debt). There is no guaranteed return on an investment in the short term. If you have a car loan or credit card debt, those should be paid off before doing anything else with the money.

Another good thing to do is stock up on things you need. If you have storage space, buy a few months worth of toilettries, cleaning supplies, and nonperishable food. You can save money buying in bulk, it protects you against inflation, and you don't have to worry about reselling it as you would if you put your savings into silver or gold.

Gold and silver really aren't investments, they are alternative means of saving money to maintain purchasing power. However, coins and bars are not as liquid as cash. It addition, gold and silver is taxed unfavorably. Unless you are planning to hold it for a long time, buying gold and silver doesn't make a lot of sense.

We all want progress, but if you're on the wrong road, progress means doing an about-turn and walking back to the right road; in that case, the man who turns back soonest is the most progressive.

-C. S. Lewis

depends

I respectfully disagree. I think at one time paying off debt was the right thing to do first but not so much anymore.

It depends on how much your monthly debt payments are. For example. if your car payment is, say, $150 a month and it would cost 5000 USD to pay off the car and eliminate that debt then you are tying up 5000 USD just to save 150 a month. There are better ways to invest 5000 USD that could increase your monthly cashflow by more than 150.

Let us say, instead, that you invested that $5000 to create and promote 5 websites (for example) that generate $200 per month in advertising revenue. You would increase your cashflow by $1000, which means you can still pay your car payment and have an additional $850 to spend on other things. If you blew it all on paying off the debt, you would have missed that opportunity. Maybe you could sell one of the websites for $5000 and pay the whole car payment off next year in one fell swoop, who knows?

Most people believe that we are headed to a dollar collapse, pretty much any minute. This will wipe out anyone's savings that are in dollars but it seems like it will also wipe out people's debts that are in dollars.

This is, of course, just my opinion but, given that, it seems like paying off debts in full should be sidelined until the fate of the dollar is determined.

While your math and logic appears to work, they ignore reality.

Someone who is worried about paying off 5000 in debt to avoid a 150/month note will not be benefiting from your strategy.

They do not have enough excess capital after living expenses and debt service to invest in anything.

Pay the debt first, THEN you'll have that 150/month EVERY MONTH to invest with.

Your idea only works for people who make well in excess of their expenses and debt service. The rest of us should pay off our debts ASAP so we free up capital each month. Holding debt makes it that much harder to save, not to even consider investing.

Your reality ignores math and logic

There is no way that devoting 5000 USD to increase your cashflow by 150/month is better than investing it to increase your cashflow by 1000/month.

In the latter scenario, you can pay off your debt in 5 months and in month 6 still have 1000 /month cashflow + the additional 150 /month for the paid off debt.

But if you use all 5000 USD of your hard-earned money to pay the creditors, you get your cashflow up by 150 and have no more savings. Woohoo - big deal. Congratulations, you are officially staying in the rat race forever. Oh and in 5 months from now you'll probably be in debt again, even worse this time, because 150/month isn't going to help you in a medical emergency, etc. 1000/month though will come in pretty handy.

What fantasy land do you live in that you can find something to

generate a 20% PER MONTH ROI? That's a 240% annual return.

Hogwash.

Your math again ignores reality.

Reality is what it is. You can fake the math all you want. But in the real world, being a slave to debt IS the rat race you never recover from.

Your assuming once the debt is paid off at the outset, the new $150 cash flow is not put into savings or investments and instead is consumed.

$150 over a 12 month period will yield $1800. Why do you presume this won't go into a nest egg?

It isn't much, but it's better than nothing.

Why do you presume, if the nest egg is already adequately stockpiled, that the $1800 won't be invested?

Even such modest amounts in a compounding investment will grow fairly quickly. Much more so if the principle is being added to every month than with a simple one time windfall.

You are also ignoring the reality that debt service reduces cash flow.

Starting from Zero, you add your income, then subtract expenses. Before you even address income, you have to get expenses in line. One should ALWAYS look to reduce expenses (reductions to cash flow) if at all possible at every opportunity. Cash flow in excess of expenses should then be put to use as follows:

#1 - rainy day/nest egg/catastrophic fund.
#2 - Investments or other productive uses to increase cash flow.

Until you reach #2, you should be pinching pennies big time and not carrying any debt, and paying it off if you have any.

Once #1 is done, then you can look to increasing cash flow. but if you are carrying debt, to whatever extent you do, cash flow is reduced.

Periodic, recurring funds are better used to invest or for increasing cash flow than one-time windfalls. One time money should always be used to pay off existing debts, build up reserves, or if you have everything else in order - splurge a bit with. (or a lot depending on your situation and the size of the windfall)

This is the very problem so many States are facing right now and they are making a mess of it.

They are using one-time windfalls (non-recurring funds) to pay for operations and plug budget gaps which exist because they refuse to say no to "new programs" aka "investments in the future."

In some cases, they are even using one-time funds for attempts to build the tax base. This will always be a losing proposition. The effort always adds more debt, current debt isn't paid off any faster, and in the end, an even LARGER tax base is needed.

Debt produces negative pressure on cash flow. Before one tries to add another pipe to the system, they should try to remove the blockage in the current one first.

You can write 35 paragraphs about it

But it doesn't change that the math doesn't lie:

- investing $5000 a month in something that creates $1000 a month will allow you to pay off your debt in 5 months and still have $1000 cashflow to spend on other things once the debt is paid off.

- paying off the debt with the $5000 = no additional cashflow beyond the 150 and the likelihood of accumulating more debt.

If you really can't see that, send me your address and I'll gift you a calculator.

I have a calculator.

You are making ridiculous assumptions.

#1 - that you can invest $5000 one time and generate $1000 per month in perpetuity. Again, that is absurd, one would be considered a snake oil salesman and a charlatan for enticing anyone into such a scheme. There is no such investment. Reality does not agree with you.

#2 - that someone intent on paying off debt, will incur more after doing so. You are ignoring the idea of getting expenses in line FIRST. So does Robert. If you never address spending, you will always be in debt, and you will always be in the rat race. The only way out of the rat race is to re-prioritize, and get financial discipline. Lack of discipline is what leads to the rat race.

If you really can't see that, then there is nothing I can say more on the subject.

Since you seemed challenged at math, here's a practice problem for you:

What is $1000 times the probability that you will actually have that $1000?

Now, what is $150 times the 100% certainty, that without the debt to service, you will have that as extra free cash flow each month?

Which is greater?

Personally, I'll take the 100% certainty of an extra $150 a month any day over the 0% chance of turning a mere $5000 into $12000/year.

Great question

My advice - Buy Robert Kiyosaki's Cashflow 101 game first and/or read his book Rich Dad Poor Dad before you invest in anything. Play it a few times. Then you will know what to do = put it somewhere that increases your cashflow and passive income.

If I were you I would put it into silver bullion in the meantime. For me, buying silver or gold isn't an investment, it's safeguarding your assets and converting them to real, sound money from cash (aka trash) until you find a better opportunity that will increase your cashflow and passive income. And if the USD collapses in the meantime, you'll be set.

The fact that you managed to save so much and are asking around first before plunging into something shows you are already on the right track.

Congratulations and good luck!

As I noted above. Robert's methods do not apply to people

living at the margins and makes the assumption that you are really making more than you need, you are just wasting it.

That is certainly not the case with everyone, not even MOST people. I would say in 2012, Robert's assumption is that you are bringing in NET 30-35k per year per person in the household, perhaps more.

If you are making less than that - NET, per person in the household, then Robert's ideas are not likely to work for you. You will find yourself forever paying debt and never getting ahead. That's because you aren't making enough to live AND have all that debt.

Step #1 should be to get debt free ASAP. While doing this, you should be trying to increase your earnings so you are bringing in enough that your living expenses are less than 40% of your earnings. (most people carry 50-60%+ in debt service)

With no debt, and 60% of your earnings left over, you'll be in gravy land and can build wealth. (you should already have a "nest egg" by that point of course)

The whole idea of "pay yourself first" is based on the assumption that there is ANY money at all to pay you. These people fail to understand priorities.

If you prioritize your expenses as such:

Water
Food
Shelter
Clothing
Medical care

(and with those I mean the BAREST of necessities)

then:

Electricity
Heating
Transportation

(notice 'entertainment' is not on the list yet)

and finally DEBT SERVICE (because you can't avoid it)

then if by this point on the list, you have nothing left, you CAN NOT "pay yourself" first.

You have to have all of those things, at least in some measure before you can "pay yourself."

The problem there is either one of perceived necessity of something that is really a luxury, and/or lack of earning capability.

The solution is to get real with your priorities and actual necessities - the true bare bones kind - then get serious about addressing your lack of earnings, all the while paying off as much debt as fast as you can. (because it will free up what little earnings you do have) Build a nest egg that can support your now much slimmed down existence for at least 6 months, if not a year...

THEN, go buy Kiyasaki's book and have fun.

But you aren't likely to reach the point of implementing Kiyasaki's ideas until you've done all of the above, and at present values, likely means you are taking in net of taxes, 30-35k per year, per person in the household. (well, really with no debt and a real meager existence, you could do fine with half that, but you won't have a nest egg, any other savings or investments, little or no insurance coverages, and certainly nothing left over to invest with)

good philosophy to stay in the rat race

I see why you say that because I felt the same way once, even after reading Kiyosaki's book. It wasn't until I played his game CASHFLOW 101 that I saw how illogical this philosophy that's been fed to us our whole lives that paying debts should come first really is.

You are assigned a profession at the beginning of the game with expenses and income that is realistic to that profession. I have not found that it was easier to get out of the rat race and into the fast track (the goal of the game) when I was doctor over being a janitor. In fact, the janitor, although they have less income, usually has less expenses.

The fact is, the majority of people with low paying professions can come up with, say $200 if they REALLY wanted to - maybe it would take them a few months (which is usually what happens in this game with the lower paying professions - it takes a few rounds longer to get started and requires more patience). You can buy a website right now for $200 that maybe only makes $50/month in ad revenue, but that's 50 more a month in cashflow. In 4 more months, you can but another one, etc. That's how it starts. It's about getting your money to work for you instead of working for your money to give to creditors.

Either way, paying off the debts first just ties up your resources and does not increase your monthly cashflow the way investments do, whatever shape they may be. The more you focus on accumulating assets, the smaller and more insignificant your liabilities become.

Real life isn't a game.

Games can illustrate lessons, but life isn't a game. Sometimes, you can keep trying different ideas, but with others, you screw up once, and that's it. You're done. No reset, no extra lives, no do overs.

Now that's out of the way...

Debt service reduces cash flow. Want to increase cash flow? Pay off debt.

Better yet, don't incur it in the first place if at all possible. If you have to, only do so to the extent you don't NEED that cash flow. That means, whatever will go to monthly payments better be IN EXCESS of all living expenses, nest egg, and insurances/investments.

Got that?

Now, what you are describing is simply the idea not to procrastinate on working the income side of the ledger. This is a given and I agree. Procrastination in this area, when action certainly can be taken, will keep you in the rat race.

The rat race though isn't really about not having more money. It's about SPENDING all you have. People get caught in the rat race VIA DEBT. Thus the only way out is to get rid of the debt. You can increase the cash flow all you want. But if your attitude about the dangers of debt, and the reality of how much they reduce your cash flow and your flexibility in life MUST change.

Robert doesn't address those attitudes. In fact, he belittles changing them.

His book is the recipe for staying a debt slave in the rat race.

Step #1 is always to prioritize and reduce expenses FIRST.

When you can't reduce them any more. Then you should focus all your energy on adding to income. Your ability to exceed your expenses increases dramatically when you reduce and eliminate debt.

And you are not factoring in the not so small elephant in the room - the psychological drag debt carrying has on a person.

You can be happy as a janitor with a modest living and no debt.

Or you can be miserable as a doctor with a fat paycheck and up to your eyeballs in debt.

You can't be happy as a janitor with a modest living and up to your eyeballs in debt, and if you have no debt as a doctor, you're living the high life.

Your suggestion is to stop being a janitor and start doing something else.

But you never address the issue of the debt that prevented a modest but happy living in the first place.

You are just going to replace that with some other occupation or way of making money, while retaining the debt, and the misery that goes with it.

Your path does not lead to financial security if you never address debt, or even frown upon addressing it.

Debt is the problem in the first place. You can't avoid it or ignore it.

Life isn't a game but a game can help you understand life

With all respect, I actually live in real life, I am a tangible being and not a fantasy, and the life I am living is actually happening, so you're not going to convince me that what is working for me is just a fantasy.

First of all, I absolutely agree with you that not getting into debt in the first place is the best course of action. Unless a loan will you help one create passive income great enough to pay back the loan right away.

That being said, the bottom line is:
since I started focusing more on using my money to increase my assets over paying off debt, my life has only gotten better, I have less stress and my debts are less significant than ever because my assets way outweigh them now. As the asset side of one's financial statement gets larger and larger, the liabilities side becomes relatively smaller and smaller and easier to pay off in one, non-sacrificial swoop.

When I put all my money into paying off debt, my assets were non-existent.

I never said this doesn't work at all.

I said Robert makes some assumptions about one's present station.

His advice is NOT for everyone at every possible level.

Reality breaks it down when you are dealing with numbers below a certain threshold.

If it works for you, that's wonderful. It will NOT work for everyone regardless of their present situation. Robert's methods can be disastrous if followed without understanding this.

82 and under pennies

If the government were to collapse the "melt coins" laws really wouldn't be an issue.

That copper value and still being able to get them in MASS AMOUNTS is a great idea. NOw 10k+ in pennies, GOT A FORKLIFT or TWO ? lol

I see alot of stuff working well right now including but not limited to

- marijuana
- websites
- land
- rabbit or other edible / fast breeding / pet selling business.
- gold
- silver
- copper pennies
- guns and a TON OF AMMO ( get ammo in common rounds as well as in the calibers you actually own )
- alternative fuel or fuel storage
- prepping items ( food storage, alcohol, cigs, bartering items )
- land once again, everything above can then be harvested, stored, secured etc on it OR MOVED if need be. Flight fight, depends on the situation.

I just wouldn't put it all in to just one of the above. Always have multiple options

http://shelfsufficient.com - My site on getting my little family prepped for whatever might come our way.

http://growing-elite-marijuana.com - My site on growing marijuana