Extra Money-Invest, Save, or College?

I’m seeking opinions from the Doper masses…

Just for the needed background info, I’m 25, working 40 hours a week in a factory. The job is looking VERY soft, and I’m not sure how things will work out into 2009. I have four years in (seniority) but I don’t know how much good that will do. Truck is paid off. Living arrangements are good.

Right now I have a decent amount of cash sitting in savings at the bank. Interest is near squat, and I feel that I really should move it into something with some returns…

I’ve always been VERY leery about investing in the stock market (the latest stuff is one reason why) but after starting a 401K and going to meetings, I do believe that it is the best for long term wealth…and now that the market is low, it’s good to get in?

So I’m thinking about taking some of my free cash and starting an investment portfolio. Or whatever it’s called. I still know next to nothing about investing…and to tell the truth, I’d like to stay “hands off” of it. I know that meddling with it over and over never does any good.

The only problem with this investment idea is that I’m considering going to college. Heck, I NEED to go. I’m just not sure when. I’m still completely lost as to what degree to look for (which is another subject entirely, I’m a history nut), BUT I am thinking I will try to go in a year or less?

I do not plan on putting ALL my savings into the market, but at least 10%. Is this a smart idea, or should I keep it available (in savings)? Any other suggestions would be appreciated.

Figure out how much money you need to pay for college, and put the rest in the market. Your best bet for a long-term investment is a low-cost index fund that tracks the S&P 500. Plan on getting a job while you’re in school so that you have extra cash. And always remember that financial advice from strangers on the internet may or may not be worth what you paid for it.

Investing in college is investing in yourself. (Of course, look into grants and financial aid as well.) In fact, a well-known financial advisor here once told me that you should only borrow money for two reasons - to invest in your house or to invest in education. If your long-term earnings will be increased by more than the tuition, considering inflation, then college is your number one priority for the same reason that you should start saving as young as possible.

I will DEFINITELY have to look into grants and loans. I don’t have NEARLY enough saved to actually pay outright for school (I was severely disappointed when I looked up a handful of tuition fees–that’s for a YEAR?!? :eek:)

Which is why I considered the stock market…I will have to borrow and eek out an existence anyway, so the amount I was considering to invest wouldn’t make a whole lot of difference, at least right now, in my mind?

That I never doubted. Thanks for keeping an eye on this dummy.

First, do some reading on investment. A good resource is www.motleyfool.com.

Second, interest rates on student loans are really low, so you could come out way ahead by investing the money and then borrowing for college. Especially with the market where it is now.

You shouldn’t invest any money you’ll need as quickly as a year or so from now. But if you won’t need that 10% for college (or other short-term needs), then investing it for the long term might make sense. You might consider putting it in a Roth IRA so your investment gains are sheltered from taxes.