Investing for Students

[Insomniac05]

Hi, to the Personal Finance Forum. I'm 19 and about to enter the 2nd year of my B.Comm program.
I'm currently thinking of selling my car, which would bring my personal savings up to around $10k, and im thinking of investing this money and use it to (possibly) pay off my student loans in 3 years when I graduate. I will probably have close to $30k in loans.

Anyway, I was wondering what are some good investing options for me? I'm looking for something that is secure and risk-free as i'm not in a position to be taking high risks, and obviously something that will pay decently enough for me to invest. Also, an investment which I can cash out anytime in case of emergency.

Some of my friends say they're about to invest in gold, some say to open a mutual funds account.... what would be the best for me? Perhaps some pre-authorized plan where I invest an initial amount as well as monthly periodic payments, that after 3 years with interest grow to a specified amount, say $30k, that I can cash out as a lump sum and use to pay off debts?

Any help appreciated :)

P.S. I'm banking with TD atr the moment if it matters.

[SkimGuy]

Don't think you can triple your money in 3 years unless you take extreme risks/make a trip to Vegas (look at point 1). 10k is a nice lump sum amount but if it's tired up in investments, you might have to sell at a loss or pay early redemption fees.

I would save money for now, cut back on expenses/get a part time job. You can make a much bigger difference in money saved compared to money earned from investing at your point in life right now since the principal amount is small and you only have 3 years of compounding.

[CSK'sMom]

And please don't think you are going to get OSAP with investments or assets in the 10k range. OSAP is need based, they expect you to liquidate your assets to pay for school yourself before they will give you any help....

[Insomniac05]

And please don't think you are going to get OSAP with investments or assets in the 10k range. OSAP is need based, they expect you to liquidate your assets to pay for school yourself before they will give you any help....

Won't they see this money anyway as it's in my bank account? or do the only see money earned through INCOME (through the CRA)? because none of the 10k was earned through employment.

[CSK'sMom]

Won't they see this money anyway as it's in my bank account? or do the only see money earned through INCOME (through the CRA)? because none of the 10k was earned through employment.

They most certainly will see it in your bank accounts. Remember on the app where it asks for your assets, things like savings accounts, investments, etc. You are legally bound to truthfully answer this question and it is cross referenced through the CRA, just like employment income.

Do yourself a favour and don't do anything risky and keep the money liquid. You are going to need it to pay for school as you likely will not qualify for any OSAP funding once the money is reported as is required. You did report the money you already have saved right that is not leftover OSAP funds (if any)?

[Insomniac05]

Yup. And I don't have most of these 'savings' anyway, they are dependent on my selling my car. So If I sell my car and deposit that money into my bank, OSAP will know? Or, say, if I get a wire transfer from family abroad? I thought they only cross check with the CRA for employment/investment related income. Not income from other sources.

[FunSave22]

So If I sell my car and deposit that money into my bank, OSAP will know?
As already mentioned you are legally required to tell them. Please don't ask for advice on how to break the law and get away with it. People here get annoyed when stuff like that is asked.

[ccyk]

yep they can see your bank account balance.

[HBP]

They can't see your bank balance, they need to audit you first. It's risky lying about your bank balance though.

If the car is not in your name, I would say keep the car rather than selling it.

If the car is in your name, you're screwed so you might as well sell the car if you want to get OSAP eventually.

No point investing as a student if you need OSAP. Assets kill your OSAP estimates.

[Insomniac05]

I'm not trying to break the law. I'm just trying to figure out how I can get the most out of OSAP. School is going to cost me around $16k next year. No, I'm not living on res. It's mostly tuition. And there's no way in hell i'm going to be able to pay that off by myself, especially since it all has to be paid in the beginning of September, because otherwise I will be charged 20% interest on the remaining balance and I will be screwed even deeper.

I just don't understand how/why they can see my balance. Does it say that anywhere in print? Since they only deal through the CRA I figured they only see employment/investment/government income.

[sunnyd71]

I'm not trying to break the law. I'm just trying to figure out how I can get the most out of OSAP. School is going to cost me around $16k next year. No, I'm not living on res. It's mostly tuition. And there's no way in hell i'm going to be able to pay that off by myself, especially since it all has to be paid in the beginning of September, because otherwise I will be charged 20% interest on the remaining balance and I will be screwed even deeper.

I just don't understand how/why they can see my balance. Does it say that anywhere in print? Since they only deal through the CRA I figured they only see employment/investment/government income.

They can't see your balance but you have to declare your balance on the application and have to tell the truth. If you are audited, you've given them permission to check your records on one of the sheets you sign.

[CSK'sMom]

You might want to actually read the declaration pages you are required to sign and return to your finaid office. You know, they make it really clear you need to actually read that legally binding document the clearly outlines your responsibilities as well as gives them permission to check anything they want. ;) You explicitly give OSAP access to everything to verify the information you provide. Bank accounts are tied to your SIN, so really easy to trace. And yes, they can see your bank balances. That is why they explicitly ask for balances for a certain date. ;)

[Insomniac05]

Then I can just withdraw the money from the bank can't I?

I really don't want to come across as a scammer or anything but keep in mind that my school expenses will be around $16k-$17k and they gave me an estimate for only $9k. And I would only get half of that in September, so $4500, when I have to make my minimum payment of 60% of the total to not get kicked out of classes. 60% of the total will be around $10k. $10k-$4.5k = $5.5k. $5.5k that I do not have....

[sunnyd71]

Then I can just withdraw the money from the bank can't I?

I really don't want to come across as a scammer or anything but keep in mind that my school expenses will be around $16k-$17k and they gave me an estimate for only $9k. And I would only get half of that in September, so $4500, when I have to make my minimum payment of 60% of the total to not get kicked out of classes. 60% of the total will be around $10k. $10k-$4.5k = $5.5k. $5.5k that I do not have....

I'd suggest booking an appointment with your financial services office to discuss this because that shouldn't happen if it's a public university. They will have some ability to make that part of the situation less difficult for you, explain about contributions of your own money and any bursaries or grants you can get. I know that you may not want to mention your personal contribution if you sell the car in this meeting -- but you should.