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Good Investment?
Old 04-20-2008, 12:00 PM   #1
Confused about dryer sheets
Join Date: Dec 2007
Posts: 8
Good Investment?

I've posted here before but its been awhile... and some time has passed and some things have changed, along with new opportunities have come to my doorstep. Currently I'm finishing up my first semester of college as an Electrical Engineering major here at the University of North Carolina at Charlotte...My dad just retired as an officer in the military after 28 years. He is tired of wasting money on my dorm (poor investment that offers no returns what so ever) so we are discussing a place to stay. He says if I give him $300 a month he will put my name on the deed. He isn't really interested in making a killing but I want a good solid investment. He also wants to set me up for the future. Also since he is retired he might get 100% disability which would pay for my college and give me 900 a month(living expenses) until I'm 26 or out of college. I plan on paying him 300 with it and investing 600 in a Roth IRA... and how would i go about investing in a Roth IRA? like where to go? is investing this money a good idea? Anyways this is the place I'm going to pitch to him...
My Townhome - Fact Sheet for 727077

Its in uptown Charlotte minutes from bobcat arena and 15 from my school. Do you guys think this is a solid investment? The area has been blowing up and many things have been built... what are ya'lls views on things? Am I taking the right approach?

Thanks for all the help!

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Old 04-20-2008, 02:18 PM   #2
Recycles dryer sheets
Join Date: Nov 2007
Posts: 102
>There's no way you're going to be able to borrow for that without him cosigning the loan. You'd be putting both him and you at risk by going along with something like that. I don't recommend either of you getting a loan that large under these circumstances.

>You're in college your first year; you aren't anywhere near having the income to afford that. If your dad is interested in buying some real estate, then it's him that should come here and ask for advise. He's also the one the lenders will likely come after in the event that you both default.

>Paying rent while at college isn't wasting your money. In exchange for your money, you get lodging for one month. Renting when you're not going to stay somewhere for much over 4 years isn't such a bad deal. Personally, I think buying a house or condo just to go to college is a bad idea.

>You can't get a Roth IRA without earned income. Do you have a job?

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Old 04-20-2008, 02:55 PM   #3
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Here's a few ideas to get you thinking in a little more detail...the general theme is development of a three- or four-year plan for the time between now and when Megacorp whisks you, the new graduate, off to your dream job.

For a start-up IRA, a mutual fund account is the way to go. You can set up a mutual fund account online with Fidelity, Vanguard, T. Rowe Price or many others.

Many on this board are partial to Vanguard, which has a well-deserved reputation for low fees and expenses. (With low expenses on an account or on a mutual fund within an account, more of your money stays YOUR money.) An expense ratio below 0.5% per year is good. Less than 0.25% is outstanding.

Your initial deposit and your subsequent contributions can go into a money market account or directly into one or more mutual funds you choose. (You choose this at the time you set up the account.) My advice is to skip the money market step if you can and pick one mutual fund that has broadly diversified holdings allocated across several investment areas. A target retirement fund is one straightforward possibility. A total market index fund is another.

When setting up your account, you need to tell the mutual company what to do with the profits that will be returned to you periodically (in the form of interest, dividends and capital gains). Pick dividend reinvestment, which means that you want the company to pay you in the form of more shares of the mutual fund.

Stick with your initial choice for several years. As you review statements, quarterly reports and other correspondence from the company, you will absorb some of the ins-and-outs more experienced investors can take for granted: share price fluctuations, asset allocation, dollar cost averaging, the various types of distributions, tax categories associated with the distributions (although with a Roth you won't owe taxes), the effects of compounding, etc.

By the time you graduate, you will have established a good-sized starter nest egg that can continue compounding for you throughout your working life. Whether you will want to continue contributing immediately after you graduate is a bridge to cross later: if your employer offers a 401k plan with matching, that's generally the best place to save for retirement, at least to start.

I would hold off on immediately making the townhouse pitch to dad. Do some more research until you are confident you have identified all of the costs of ownership and outlined a monthly housing budget. There's much more to it than picking the house, negotiating the purchase price and paying the mortgage. The biggest continuing expenses will be real estate taxes, utilities, insurance and - for a townhome - monthly homeowners association dues and / or maintenance fees.
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Old 04-20-2008, 05:16 PM   #4
Confused about dryer sheets
Join Date: Dec 2007
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Ok cool, this is great information, and yeah it does look risky but I'm reading more about investing on this site. Also yeah I will be tutoring Calculus 2 in the fall at college so I will have a job then. I've read alot about Vanguard on this site I guess I should check it out. I'll definitely go with a mutual fund as well.
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Old 04-21-2008, 12:12 AM   #5
Thinks s/he gets paid by the post
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I bought a house while in college. My parents co-signed and I paid the mortgage with a Research Assistant job and roommates. When I got a full-time job, a nominal fee took my parents off of the title. It worked out fine.

Of course, my mortgage was much lower than $250,000.
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