What I Spent My Savings On After Pulling Out

by MD

You guys know why I stopped investing in the stock market. I didn’t just pull out of the stock market to hold my money in a basic savings account. I wasn’t just afraid of the risk that came with owning stocks. I actually had bigger goals for my savings. Today I wanted to share what I feel are better options for your money that don’t involve investing in the stock market.

What are four better options for your savings than investing in the stock market?

Unique experiences.

There’s so much to see in this world that it’s a shame to not even try to see some of it. After looking for more options for what to do after college I decided that I really wanted to take some time to travel the world for a bit. While I didn’t get to see the whole world (is it even possible?), I got to travel about a dozen times over the past few years.

You can save all the money that you want and prepare for the future. The problem is that from reading blog posts, talking with older friends, and everyone I speak with, I find that everyone regrets not travelling enough. While I wasn’t sure about what to do after college, I did know that I didn’t want to turn 30 and regret not seeing what this world had to offer.

Real estate.

The reason that I support real estate is that you actually own something. The decision to buy or rent a home in your 20s is a big one. This is why I decided to put a lot of time and research into my decision. I ended up deciding to buy a condo that I could live in for a year or so. I lived in the place for a year and then I rented the unit out so that I can travel more.

I must note that when I mention real estate I’m not referring to your primary residence. I’m referring to becoming a landlord through purchasing a rental property.

Education.

We all know that knowledge is power. The more you know the more that options that you have open to you. I’m also not referring to the traditional form of education. While I did get my college degree, I also took advantage of other educational opportunities. I took an online course, got my license in Personal Training, read many books, attended a conference, and took advantage of any chance I had to meet anyone in my field.

I fully believe that the best option for your money is to invest in yourself. Albert Einstein said it best when he said that insanity is doing the same thing over and over again expecting different results.

P2P Lending.

I must admit that this is a new form of investing that I’m slowly starting to look into. I haven’t really covered this much around here yet. This form of investing is rapidly expanding and I plan on covering it in greater detail in the near future. For now you can check out the home page of Prosper for more details.

These were all options that I found to be much more beneficial to me than than investing in the stock market. The great news once again is that you don’t have to stick with just one option for your money. You can spread your money out between all of these options to see what works for you.

 

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Why I Decided to Pull out of the Stock Market

by MD

I started investing my money in the stock market when I was still in high school and didn’t even have my own account setup yet. At one point I was pretty serious about trading stocks. Then around 2008 I finally made the decision to not invest in the stock market any longer. I sold almost all of my shares, took in some profits, incurred a few losses, and pretty much washed my hands off the stock market for the time being. I haven’t gone back to the stock market since then. I kept shares in one company because they still pay a decent dividend and it’s only a few hundred dollars that I have invested with them.

Why did I leave the stock market? I’m going to share why I stopped investing in the stock market.

I didn’t want to sit by the news all of the time.

Investing in the stock market isn’t as passive as it may seem from the outside looking in. You need to watch the news and stay on top of things so that you know what’s going on in the industries that you’ve invested your money in and the market as a whole. I just didn’t feel like following the news that closely any longer. I also didn’t want to stress over any bit of negative news that would come out (and believe me, lots of negative news comes out). I now don’t have to worry myself over the various economic problems that happen all over the world.

When you invest in the stock market you don’t see what you own.

When you buy shares you don’t get anything. You own a piece of a company. You never really get to see what you own. For some investors this just isn’t enough. I like to own tangible items. This is why I ended up putting my money towards a condo. I just wasn’t too crazy about owning something that I could never physical see.

I wanted to take different risks with my hard earned money.

I wanted to change the kinds of risks that I was taking with my money. The stock market isn’t the only option nor is it the best option for your money. There are many other and better investment options in your 20s. I didn’t want to tie up my savings in stocks and I decided to make some major changes. This will be covered in greater detail on another day.

Now that you know why I chose to leave the stock market, you can see where I decided to put my money. You’re going to have to check in tomorrow for that post.

What it comes down to is that investing in the stock market isn’t for everyone. At the moment I’m pretty much out of the stock market, but who knows what the future holds?

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Should You Invest in the Stock Market in Your 20s?

by MD

Should you invest in the stock market in your 20s? Is it worth risking your money at this age? I really wanted to cover stock market investing in your 20s on Studenomics for a long time now.

If you’re out of college and making real money for the first time, you’re likely thinking about what to do with your money. If you read our tips on stock market basics the other day, then you might be curious about finally getting started in the stock market. I have a strong feeling that you’re debating if you should start investing in the stock market, but you just don’t know if it’s the right move for you at this point.

I hope to make this decision easier for you today. I want to look at what your decision on investing in the stock market should depend on.

What does investing in the stock market depend on?

Whether you get into the stock market or not depends on your level of risk tolerance. Can you handle risk? Can you sleep at night knowing that you lost some money during the day? Can you handle the market swings? Can you handle the risk of losing your savings?

Simply put, getting involved in the stock market isn’t for those that can’t handle risk. I learned this about the stock market the hard way the first time around. I worked all summer after grade ten and then put all of my savings towards the stock market. I thought I was the smarted guy in the world because I had my money in the stock market. I thought I was going to get rich. Then I saw that my stock dropped and I lost half of my savings.

I didn’t run away from stocks right at that point, but I learned that I definitely didn’t have the guts to take big risks with my money. I also learned that I especially hated taking risks when I had to mow lawns for $7/hour to make money.

This leads into my next point on stock market investing in your 20s.

There are many success stories about the stock market.

For some odd reason, success stories about hitting it big in the stock market get out and 20-somethings get all excited about the idea of investing in the stock market once they get some money in the bank. There are also many guides out there on how to play the stock market.

I’m not going to promote any stock market success stories because truthfully more young investors get played by the stock market. I want to warn you right now that if you buy a stock there’s no guarantee that the price is going to go up just because of what some “expert” on the news or the guy at the gym said.

I covered how the stock market works in the past, so I won’t go over the same details again. You can check out that post for more information.

What if you want to invest in the stock market right now?

If you want to get started you can create an account with an online stock broker (listed below). The sign up process shouldn’t take long at all. Once you sign up with the stock broker, you just need to setup your banking infrastructure so that you can transfer money between the accounts. The process is a one time sign up that might take a few minutes. Once you’re started with your account, you can start buying and selling stocks.

Click here to sign up for an account with TradeKing.

Before you sign up with an online stock broker and start investing your money, I urge you to conduct further research. You work hard for your money. I don’t want to see you get convinced to jump on some “hot” stock pick that ends up being a complete flop.

I hope that by this point you’re not worried about understanding the stock market. Deciding to invest in the stock market in your 20s is a big move. Are you ready?

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Best College Student Credit Cards

by MD

What’s the best credit card for college students? Some would argue that there isn’t one and that college students should avoid credit cards at all costs. On the other hand, the argument can be made that wise student credit card use could lead to many benefits down the road.  I can only speak from my experience with student credit cards. For me a credit card in college was the quickest way to access credit and to start building my credit. Even though I messed up (a few times), I was still able to build my credit and buy my first investment property in my early-20s. You can also start to build you credit in college.

But I’m not here to preach.  Below you’ll find a quick review of five credit cards designed for students which are all good to own.  If you decide to apply, make sure to stay within your credit limit and ALWAYS pay your bill on time.

Martin’s Pick For The Best Credit Card For Students

Citi Forward Card for College Students – My favorite student card is most definitely the Citi Forward Card for College Students.  This card gives students a 0% intro APR on purchases for 7 months and when that expires the APR becomes 13.99% – 22.99% variable.   The card has no annual fee and requires no cosigner … which is rare for student credit cards these days.

The Citi Forward Card for College Students also has a great rewards program, offering students five ThankYou points for every $1 spent on books and music and at restaurants and movie theaters.  One ThankYou point is given for every $1 spent on all other purchases and this card offers up to a 2% APR reduction if you make your payments on time and stay within your credit limit.  1,000 ThankYou points are earned when you sign up for paperless statements and up to 1,200 bonus are awarded for being a responsible student.

Discover More Card – The Discover More Card comes in a close second with a 0% intro APR that’s slightly longer than the card above; 9 months.  The standard APR will become 13.99% – 20.99% variable and every cardholder will earn up to 5% cash back on purchases.  0.25% cash back is earned on the first $3,000 spent annually and then 1% on all purchases beyond the $3,000 mark.  5% cash back is earned on select purchases every quarter and the Discover Student Card does not charge an annual fee.

Citi Platinum Select Card for College Students – Students that own the Citi Platinum Select Card for College Students will receive a 0% intro APR on purchases for seven months.  They’ll also receive 5% cash back at gas stations, supermarkets, drug stores and utilities for the first six months and 2% cash back in rotating categories each month.  1% cash back is earned on all other purchases and an average of 5% cash back is earned when shopping online through the Citi Bonus Cash Center.  The Citi Platinum Select Card from College Students has a standard APR of 13.99% – 21.99% variable and charges no annual fee.

Journey Student Rewards from Capital One – Another credit card with no annual fee, Journey Student Rewards from Capital One gives students 1% cash back on all purchases, without any hoops or spending requirements to meet.  Unfortunately, there is no introductory APR or other big benefits to mention and the standard purchase APR is 19.8% variable.  The draw on this card is that it’s designed for students with less than perfect credit (average credit to be precise) so obtaining approval is a tad bit easier than other cards above it on this list.

Orchard Bank Classic MasterCard – I’ve decided to add the Orchard Bank Classic MasterCard to the list, even though it’s not a student credit card and the offer isn’t that good.  Cardholders receive an APR of 7.9% – 19.9% variable depending on credit history and will be charged an annual fee of between $35 and $59.  No rewards program is offered but the Orchard Bank Classic MasterCard is designed for people with bad credit.  Finding a credit card with a sub-600 FICO score is next to impossible and even though this has an annual fee, it’s a great way to build credit (if you NEED to).

Deciding what’s the best credit card for students strongly depends on what your goals are and what your current credit status is. Finding the best college student credit card is also very important for those of you that want to use credit cards and not get used by them.  If I missed any credit cards for students that you would like to put on this list, then please let us know.

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Should You Even Bother With a Savings Account?

by MD

I’ve spent so much time searching for the best online bank account, that I missed out on starting an interesting discussion. There’s a whole other side to the issue of savings accounts here. That’s the side against a savings account. I was too busy praising savings accounts that I forgot about the possibility of not even holding a savings account. I didn’t even consider that some readers don’t even want to bother with a savings account.

When I wrote about chasing interest rates, an unattractive reader (and friend of ten years), Vincent wrote in with his views on savings accounts.

I prefer to have a non-interest bearing account with no fees. The money you make on interest has to be claimed on your tax return and since the amount is so small I prefer not to deal with that. Truthfully I try to keep a very small amount of money in the bank and keep my life more private.

This comment leads to the obvious question. Should you even bother with signing up for an online savings account? For some of you reading this the answer is clearly in favor of a savings account because you want your money to be secure at all times. Then there’s the flip side that feels that there are way better options for your money than keeping it in a savings account. I wanted to briefly look at both sides to the argument.

Why should you not bother with an online savings account?

I’ve covered the best online savings accounts here in the past. While writing up about different bank accounts I was totally transparent and told you guys that the interest rates are not impressive with savings accounts these days. The truth is that a savings account comes with no risk, which means that the reward aspect is also low. You’re not going to earn much money on your money with a savings. To an aggressive investor this is a huge turn off.

A savings account is also a boring way to invest money for those reading this that want to see instant results. With real estate you deal with tenants, with stocks you can buy and sell at any given time, and with your own business you see many swings in revenue and growth. With a savings account your money just sits there and earns a tiny percentage.

Why should you bother with a savings account?

There are many benefits to a savings account. I’ve covered savings accounts here many times, so I’ll just skim over the main benefits:

  1. Security. With a savings account your money is FDIC insurance up until a pretty high amount and there’s no risk involved. You’re not investing your money in a company or a property that you’re praying will appreciate in value. Your money is locked up and safe.
  2. Passive investing. You don’t have to do anything once you place your money in a savings account. This means that your investing is passive and you can focus on other areas of your life.
  3. Liquid money. You can always access your money in your savings account. It might take a few days to physically get the money, but your money is always fairly liquid and available to you in case you really need to access it.

I’ll summarize by saying that a savings account won’t give you the best return for your money, but at the end of the day you’ll know that your money is always safe. For some of us that feeling is priceless.

You have the information that you need and now the decision lays in your hands if you want to keep your money in a savings account. The great news is that you don’t have to go all or nothing. If you want to be more aggressive with your money, you can always keep your emergency fund money in a savings account.

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