Oh, here's something that I could use some advice on: after I get paid, I'll probably have around 3K USD in a bank account doing pretty much nothing. Should I invest it in a Vanguard index fund or something similar for now? Also, I'm probably going to need to buy a car eventually (my guess is in 2-3 years), which can create a lot of nasty compounded interest. Would I want to use any money that I have saved up to pay a big expense like that off immediately, or would I want to keep some invested?
If you've only got $3k you want to keep most of that liquid as an emergency fund. You probably don't want to buy stocks unless you can go long on the stocks and ignore market movements, and you want to study investing before investing ESPECIALLY investor psychology so you don't panic and act rashly if (when) there's a crash. You probably want to read "The Intelligent Investor" by Ben Graham before buying any equities, which Warren Buffet says is the best book on finance ever written. I agree, btw - I've never found better. Excellent book.
If you did want to deploy some of your cash, here's a couple things:
*It'll cost you around $20 to $100 to develop a credit score, assuming you're American and don't have one. Go to the bank, throw $100 in a CD, and get a secured loan against it that reports on your credit. That'll give you a revolving line of credit on your credit history, which helps. Get a credit card a few months after that, and ALWAYS pay it off in full each month. Good credit will make/save you thousands later, so do it now.
*Buy small gifts for people you admire as a show of respect. Do this for particularly good professors, bosses, teachers, friends of family, acquaintances, etc. Go $20 to $100 per gift to start, $100 is even too high unless someone has been really great to you. Buying 50 gifts at $20 each for people who have treated you REALLY well probably pays for itself. Write a note of gratitude when you do it, just buy chocolate or protein bars or a great DVD or something small. Don't do it all at once, spread it out, but I've never regretted spending money to say thanks for someone who helped me.
*Great books tend to be worth the money. Books are surprisingly cheap for how much you get for them.
Hope that helps, cheers,
I would suggest reading The Investors Manifesto by William Bernstein - pretty much all you need to know as a non-pro dealing with your own money.
I think silver and gold are great investments for the simple fact that unlike a savings account you can't as easily turn it into cash. Also unlike cash if for whatever reason *cough*federal reserve goes under*cough* your paper money goes to hell your gold and silver still have their value. Can't really get much for paper these days...
Silver glitters. That could be one of the most important reasons why I started buying. Newly minted maple leafs have magic power. You start buying more of it, rather than spend it unwisely. Logistically it was very easy when I lived in Canada. I could go to Coin shop and buy as many Maple leafs as I had money for. In HK I have to save more and then buy from Kitco. By the way, they ship in most countries. Your price per ounce is going to be more expensive, but you will have your Real money in hand.
Good book on precious metals investment is Why Invest In Gold and Silver by mike Maloney. He explains the power of these metals.
I chose silver, because it was too expensive to buy gold. Since I started buying, gold went up 80%, and silver 300%. so I am quite successful in my choice.
I didn't cash in. In my opinion silver is still way undervalued. Silver is used everywhere and in most case is not salvageable. Such as bombs, rockets, cell phones etc. Most of gold on the other hand is and you have to dig less of it.
I still buy. I will start sell around 400-500 per ounce. Call me crazy but it will happen one day.
Awesome advise. Always give/thank to those who help and never look back. Robert Kiosaki mentioned in his book that you always have to put 10% for charity and 10% for investment on DAILY basis. Make it a habit. I was following his advice when I was making 12 000 annually and when I was making 112000. Make it a habit. To make it simpler, invest in tangible things (easier to measure) I was buying silver ounces. One at a time. When they were 12$ and when they are at 40$ a piece. Buy, put in a locker, forget. Every day. Put a tip on everything you spend. When you look at 100 running shoes, assuming it's aftertax money (company write off) it will cost you 120 and that's how you treat every purchase or expense. Warren Buffet will shake your hand for it.
3k isn't a whole lot of money when you look at it, personally I would keep saving until you have at least 10k in a rainy day fund. That way if you lose your job, get hurt, or whatever you have enough to get you by for awhile.
Also the person said they planned on buying a car, pay cash and don't buy new. Wasting money on interest does nothing for you, tried explaining that to my wife but she never listens :(
When it comes to bills having money for emergencies is key. Beyond that start with the easiest debts to pay off first and getting out from all the debt you possibly can. I like the idea of 1 credit card to build credit but wouldn't recommend it unless you have the self control not to abuse it. Most people don't have that including myself.
Best money advice I ever got was listening to Dave Ramsey, you should check him out.
Edit: I gave up on financial goals in late 2011 after some huge financial and artistic wins... money shouldn't be taken too seriously. For the record, they were all basically on track, some were being massively exceeded, others were a bit behind schedule, but were all happening.
I set my next 10 years of financial goals on June 28th. That was exactly a month ago.
1 year - Critical Thinking [my first book] out. Blog income trickling. Some info products. Some freelancing. Something else, some X-Factor thing bringing in cash. Net monthly income positive. Health insurance. $50,000 in the bank. Expenses = income per month minimum.
3 years - 3 to 5 books out, many products out, blog income robust, some working on big exciting deals. $10,000 per month total, $5000 passive at least. First property owned. $300,000 in the bank.
5 years - 7-10 books out, many many products out, many passive income internet properties, working on big exciting things, $50,000 per month total, $40,000 passive at least. $1,000,000 in the bank.
During my second year at college, I thought that investing was easy. I read about options, paper traded for a few months, and then solicited my friends for investments. Many of them invested in my hedge fund - "The H Fund", which I started with a friend. In total we had $26k, which was quite a lot considering how young we were.
The fund survived for a few months, even being profitable for a short amount of time. In the end, though, we lost all of the money. Luckily I have awesome friends who understood the risk, and no one was mad. Still - I learned my lessons and stayed out of the stock market for years.
For some reason or another I started reading about Warren Buffet. For those that don't know, he is the second richest man in the US, with a worth of over 40 billion. What makes him exceptional is that he is the only person on the top 100 richest people list who made his money through investing.