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How to proceed (student)?

4919 Views 10 Replies 9 Participants Last post by  camhard
So, I've been watching my money, and trying to invest for a number of years now, but thought I would ask your opinions on what to do.

I recently turned 19 and am going into my third year of university (plan on going on to do a master degree - probably 2-3 more years after undergrad). I live at home during the summer (have so far at least) but on campus during classes.

I have money in a few mutual funds (2 equities funds and one balanced), though was forced to take a significant amount out this winter, basically when prices were at their lowest, so I lost some on my initial investment. I took out $4000 of my total $7000 initial (total money put into all 3 funds). I do have the option to use some RESP money, though I took a bit of that out this winter as well and am now left with a value of around $11 000. I don't have a car, or anything else that really has a steady draw of money, aside from school.

How should I proceed to hopefully stay debt free, at least through undergrad, and be prepared for after school? I'm considering short term, or even intra-day trading, though I know this usually eats up a significant chunk of cash during learning, and is by no means a reliable way to make money (I figure it would be best to start learning asap though). Any suggested reading or other ways of learning? I also came up with the idea yesterday that it might actually be a good idea to apply for a student loan right now. The idea would be that I would still pretend that I was paying for school (i.e. put the entire cost away), but be able to keep as much money currently in investments where it is, in an effort to reduce impacts of the current lull, or maybe even continue to increase its value. It is my understanding that payments are not required until after graduation, so just before I start incurring interest, I could take all the saved money and pay off the entire loan (I have to look further into how payments/interest work with student loans). I'm also not sure if I would be able to continue having zero payments through my second degree, or if I would have to pay them off, then start again for the more expensive grad school (for which I need a lot, as I would like to study in the US).

I just feel pretty overwhelmed, as I'm barely covering my schooling without a loan, without money for travel or other programs, etc. Grad school will be even harder. Then, I would like to buy a home asap after graduation, but, especially wanting to live in Vancouver (or maybe New York), that doesn't even seem like something I could dream of affording for an extremely long time.

Any suggestions? Where should I focus my learning (e.g. day trading, real estate investment, etc. I don't know)? I'm guessing with my minimal capital, I can't really gain anything from trying to develop some passive income.

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Thanks for the replies. I think I should clarify a few things; hopefully I don't miss anything.

"You did not mention if you had an income"
I do not currently have a job during the school year lined up. I would like to, though it is suggested by many that my program is one of/the most demanding, especially when it comes to time. I will have a full 18 credits each term etc. We'll see. I am guessing I'll work out a flexible job (e.g. sign up for shifts) or do some freelance design work. I will definitely try to fit in as much work as possible without completely consuming all of my free time.

I have always taken a hard line against loans. I've always taken the approach that I need the full cost of something before purchasing it (with the exception of a home probably, maybe a car, but probably not). After reading about so many people doing well, while paying loans, I thought it might be time to re-evaluate my approach.

"I know you are in a hurry to make a ton of money over night, but it will benefit over the long run to hang in there and just go one step at a time"
I'm not really concerned about short term. Of course it would be nice, and I am trying to see if I can make enough to cover both degrees, but I'm really thinking quite long term. The reason I'd like to get into riskier type investing with the potential for quick gains is not so much to make profit now, but to get the learning process out of the way.

Any money I put into any kind of investing, I more or less consider as spent money (in my budget, it is a cost, and while I check performance, I never let myself say that I 'have' that money... I know I broke that rule in the winter, and it's complicated to explain, but it shouldn't have happened exactly as it did). I realize that it is gambling, so I don't spend any money on investments that I foresee absolutely needing to get by for the next few years, at least.

Basically, the goal is to avoid huge debt/living too modestly and ideally have the begin savings within the first 5 years of graduation (10 years from now). Whether that means somehow making quick money, or putting whatever I can into some sort of fund, or into the learning process of investing is what I am trying to figure out.

"It sounds like your about to try and get student loans by "pretending to be in school""
No. I really am in school, and will be for a number of years to come. What I said was actually: "I would still pretend that I was PAYING for school". In order to ensure I don't spend money I don't have, within my budget/head, I would consider all of the loan money as 'tied' to my personal money. I.e. if I used $5000 loan money, I would put $5000 into some sort of medium risk investment. With a likelyhood for modest gains, though I would also recognize the possibility for loss. With a student loan, I would then take all of this money out after graduation and pay off the entire loan at once, without incurring any sort of interest. The income on the investment would then be profit for me. With a standard loan, I would only do it if I could put the money into something that I was relatively confident would return a higher percentage than interest on the loan.

I should be clear that I am not looking to lie, or evade any sort of laws. If I was, I would probably do so in ways, but I'm not that type of person.

"Graduate school should be debt-neutral"
Ya, that would be nice, and I could probably pull it off. However, I'm currently leaning very heavily towards studying in the US. I doubt I could get state tuition costs. Though I have dual citizenship, I've never lived in the US. So, I'm looking at a minimum of ~$16000 a year, though more like $30000 or so. I don't see any way of not needing a loan if I'm spending upwards of $100 000 over the course of three years (incl. food, housing, and such), while studying full-time in a very demanding program.

"My only advice is to have a good understanding of whether it makes career or financial sense to pursue a master's degree in your field. It is often not worth it financially in many fields."
I have a very good understanding of this, and yes, it is pretty much necessary. I am studying architecture, with the intent of becoming licensed, so a professional degree is essential. I also value education significantly, and would at some point like to continue onto post-graduate work.
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