<p>I have 3k at my disposal. I’m 17, but I have no car. Having a car would be nice - it could occasionally get me where I want to go, but it’s not a necessity. Plus there’s the cost of gas, insurance, repairs, and DMV fees to deal with. I just don’t want to be that “one kid” who doesn’t have any wheels and can’t participate in social events because of it.</p>
<p>I keep hearing about how it’s a great idea for people to start investing in an index fund as early as possible so that compound interest can work in your favor. 3k invested in an index fund with a growth rate of 9% becomes $39803.04 after 30 years. If I buy a car now I feel like I’ll be cheating myself out of that much money in 30 years! What should I do?</p>
<p>Cars are a bad “investment” but useful… ALso be careful about the 30 years numbers because you have to adjust for inflation, that being said if you know someone who is stock broker or something it may not be a bad idea to talk to them about what to do with the cash.</p>
<p>I think you should invest some of your money and then don’t touch it. I wish I had done that at your age but I didn’t think like that.</p>
<p>I don’t think you should invest all of your money so you have some for fun. As far as buying a car goes … if you’re 17 I assume you are living at home. Don’t you have access to a family car to use? Can’t you catch a ride with friends to social events? Are you going to a college next year where you could take a car to?</p>
<p>It depends. I need my car to get to school (I need to go an hour early every morning for drill, and need to stay after for 2 hours for athletics). My parents work till ~6PM every night plus the commute home, so my only option is to drive myself. If you don’t need a car, don’t get one, imo. I don’t know much about investing in stocks, but it’s a good idea if you know how to do it and make money…</p>
<p>Thanks for the input. I’m living at home right now, I’m homeschooled, and my job is a bike ride’s distance away. I don’t go out all that often, but when I do, I can usually get a ride from my parents or a friend. I actually have 4k total, but 3k is the minimum amount necessary to invest in an index fund. I think the best idea is to invest. I’ll still have 1k left over for whatever I need.</p>
<p>^Yeah, what better time to get a car than when you are 50?</p>
<p>I would recommend that you spend it all on whatever you want. In 30 years time 40K may not be worth very much. You may not even be alive in 30 years. The bank you invest it in could go bankrupt</p>
<p>Unless you really screw up your life, in 30 years you’ll probably have a good job, with a nice salary, and won’t need 40K. Much better to spend it on stuff you want NOW.</p>
<p>But don’t listen to me - I have a personal grudge against investments/stocks and am rubbish at all financial matters.</p>
<p>What about retirement, Gerontius? Setting aside a certain percentage of my income throughout the years isn’t going to provide enough for retirement unless I can somehow figure out a way to make upper six figures. It needs more and I think stocks are the answer.</p>
<p>^How would it not be enough? And how do people who haven’t invested in stocks at the age of 17 survive after retirement? Or are you planning to retire very early?</p>
<p>When you say stocks, you mean investments, right? Stock prices fluctuate regularly (or may remain stagnant, depending on how that particular business is doing), but bank investments grow over time. You’re not saying, “Oh I’m going to put in $3000 into stock ticker ____ and hope it will yield positive returns,” are you?</p>
<p>EDIT: Ahh, you’re looking at index funds. In that case, I personally think that the S&P 500 index fund investments are performing relatively well (or at least, changes have been fairly consistent). Many investors have built significant capital gains, and if you don’t have the time to actively trade, passive investing through index funds is a great way to stow away and build up some money.</p>
<p>lol are you serious ? get a car… if you’re that obsessed with money buy a beater for less than $1k. Also know that some cars ie. honda civic, toyota corollas hold value really well so you can decide to flip a car after using it for 6months-1 year and get 90% if not all of your money back. When you buy a car, tell the seller to write $100 on the sold cost, so you save on taxes too. No, the DMV will not come after you, they have no idea the condition the car is in, it could be wrecked for all they know, and it’s your prerogative to sell a car for how ever much you want.</p>
<p>Right, AeroEngineer, I’d be investing in an S&P 500 index fund. Historically, the annual return for that fund has been about 10%, I believe. You might also be surprised to hear that passive investing via an index fund has, over a long period of time, done better than 80% of active investors. If you can’t beat the stock market, join it!</p>
<p>And yeah, andrew. Maybe I’ll just buy a beater for under 1k. Or I could wait six months or so, save up more money from my minimum wage job, and pick up a better car. Up to me, I guess.</p>
<p>Wait on the car until you are in college, or even out of it, depending on where you go to.</p>
<p>Where would you need to go in high school that your parents couldn’t take out? In college, you <em>might</em> need it, but more often that not you can get somebody to drive you.</p>
<p>If you sock it away in a good fund (I recommend an index fund with low costs. Vanguard and Fidelity both have good ones), you’ll do well. You will learn to delay buying luxuries too which is a really good lesson to teach yourself. You may even find that by the time you graduate from college, it’s grown enough to pay for better car (that you now need), or to help you get started. Having money ‘in the market’ will make you much more likely to learn about investing and such too.</p>
<p>Invest. If you’re going to a college that’s out of state in the future, then the car is useless. If you invest it, you’re practically getting an early start in paying your college debt.</p>
<p>If you’re going to invest, two words: compound interest. I was doing a whole bunch of formulas on it today. (Which reminds me, i have to get back to that soon…the combination of math and economics is a thing of beauty)</p>
<p>This is what i would do, right now you dont really need a car. Most likely some of your friends have cars and can give you rides. I would take that money you have now and do what you wanted to do with it, the bank thing. With that money that you would be getting when your older i would travel the world. I guarantee if you do this with your children and wife/husband, if you choose to have any, will be the best thing to happen in your life. Traveling is the best thing you can do with your money, i dont care what any of you say. This world we live in is mostly ********, entirely based on money. Its sad how you need money to experience the world the fullest. Im not talking about going into the major cities across the world, but going to the outskirts. You would learn more traveling than all you did from studying textbooks and other forms. Let me tell you, put that money away and let it build, so you can travel or do whatever you choose. But i bet you if you save that money instead of buying a car you would appreciate it. Also that car is gonna cost you more than 3000$ after you get finished paying for insurance and gas.</p>
<p>Actually, im only 16, i dont really know enough in this world to say this yet; even more so advise you what to do.</p>