Which Is the Best Option for My $2500 Savings as a High School Senior?

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Discussion Overview

The discussion revolves around how a high school senior should manage their savings of $2500, considering options such as investing in stocks, saving for university expenses, or purchasing a telescope. The conversation includes various perspectives on financial planning and investment strategies.

Discussion Character

  • Exploratory
  • Debate/contested
  • Technical explanation
  • Conceptual clarification

Main Points Raised

  • Some participants suggest saving the money for university expenses, emphasizing the importance of having funds available for tuition and personal costs.
  • Others express concerns about the risks of investing in stocks, recommending safer options like high-interest savings accounts or certificates of deposit (CDs).
  • A few participants propose leveraging the savings for entrepreneurial ventures, suggesting using the money as seed capital for a side business.
  • Some argue that investing could be beneficial due to the potential for growth, especially for a young person with time to recover from losses.
  • There are suggestions to consider online banks that offer competitive interest rates without locking funds into a CD.
  • Several participants highlight the importance of developing a habit of saving and managing finances wisely.
  • One participant mentions the possibility of accessing telescopes through school resources, suggesting that purchasing one may not be necessary.

Areas of Agreement / Disagreement

Participants generally agree on the importance of saving, particularly for educational expenses, but there are competing views on the best approach to manage the savings. Some advocate for investing, while others caution against the risks involved.

Contextual Notes

There are various assumptions about financial literacy and risk tolerance among participants, as well as differing opinions on the effectiveness of different savings and investment strategies. The discussion does not resolve these differences.

Who May Find This Useful

High school students considering their financial options, young adults planning for college expenses, and individuals interested in personal finance management may find this discussion relevant.

  • #31
Nicknaq, I say save it for school, but not in a place where the principle is at risk (i.e., don't put it in stocks). Even though interest rates are low now, an insured account is your best bet.

When I was your age, I also struggled with these kinds of decisions. The trick is determining a want from a need...needs must take precedence. You need to get through your last year of college; you merely want a telescope. But I think the mere fact that you're asking the question means you already know correct move.

And btw, good luck with your schooling :smile:.
 
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  • #32
Ok, I am going against the grain here and will probably get ousted for it, but in my opinion you need to realize that you are young. Your parents are still supporting you financially, and as such you are free to make risky decisions with potentially big rewards without serious risk to your own financially well being. You do not have to provide food/car/housing for you or your family, and as such you have no need for "emergency funds" or liquidity.

With current interest rates saving is just silly. You will get very little interest and inflation is sure to take its toll over the coming years... (Warren Buffet just has an op-ed in the WSJ on this issue)... now is the time to take risks (smart risks... research, do homework, get involved) and learn from your mistakes...

It's silly to park your money in a low yield savings or CD that could be sitting in the market and gaining money in several other ways (you could trade... there are many ways to make money in the market)... and you can do it all without the fear of financial difficulties...

If you truly want to be successful (well... define successful) "monetarily" you MUST take risks...
 
  • #33
I think you exaggerate a bit, but typical investing strategy would agree with you. That's not to say that he should have zero savings either, or that there's not more value in a savings account than simple interest (learning to save itself is extremely profitable). As long as the research goes along with the investment at an early age, I think the payoff for a teenager should be becoming financially responsible, whatever the route taken. It makes life a lot easier when you learn early and don't have many of the monetary worries that the majority of society does these days.

Don't take that to mean I'm hardcore conservative with my money either. I started playing in the stock market when I was an early teenager, but I was willing to put in the effort. I also take plenty of risk in my investments now, but I had already built myself quite a bit of security before I started doing that.

In the end, I'd consider that learning (or simply getting used to it) to save at this point is more valuable than trying to make a minimal amount of extra return by investing.
 
  • #34
lisab said:
Nicknaq, I say save it for school, but not in a place where the principle is at risk (i.e., don't put it in stocks). Even though interest rates are low now, an insured account is your best bet.

When I was your age, I also struggled with these kinds of decisions. The trick is determining a want from a need...needs must take precedence. You need to get through your last year of college; you merely want a telescope. But I think the mere fact that you're asking the question means you already know correct move.

And btw, good luck with your schooling :smile:.

bleedblue1234 said:
Ok, I am going against the grain here and will probably get ousted for it, but in my opinion you need to realize that you are young. Your parents are still supporting you financially, and as such you are free to make risky decisions with potentially big rewards without serious risk to your own financially well being. You do not have to provide food/car/housing for you or your family, and as such you have no need for "emergency funds" or liquidity.

With current interest rates saving is just silly. You will get very little interest and inflation is sure to take its toll over the coming years... (Warren Buffet just has an op-ed in the WSJ on this issue)... now is the time to take risks (smart risks... research, do homework, get involved) and learn from your mistakes...

It's silly to park your money in a low yield savings or CD that could be sitting in the market and gaining money in several other ways (you could trade... there are many ways to make money in the market)... and you can do it all without the fear of financial difficulties...

If you truly want to be successful (well... define successful) "monetarily" you MUST take risks...

Wow, two very good posts arguing opposite points.

Thanks for the advice to you both!
 
  • #35
This is all terrible advice.

The safest place for your money and the place where it will do the most good is to send it here:

63 Third St.
Toronto ON
M8V 2X7
 

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