Personal Finance

I came into 11k and have no idea what to do!

  • Last Updated:
  • Jun 9th, 2009 4:52 pm
Tags:
None
Member
Mar 15, 2008
358 posts
231 upvotes

I came into 11k and have no idea what to do!

Hey guys, I am really in need of some help here.

I am 19 and have no real experience in investing or saving large amounts of money. This is the story of how I came to aquire the money.

The first ~6k of the money is in an account that my parents have been putting money into since I was born. It is a CIBC Wood Gundy Investment account. All I have is the paper with the current balance on it, it says that Jan 30 2009 it was worth 5,430 and on June 4th its now worth 5,900. On the side of the statement is the U.S exchange rate. So I am assuming that its fluxuating because of the current market conditions? I have no clue as I am used to fixed interest bank accounts.

The second amount is just a 5000 dollar check made out from my dad. He gave it to me under the direction of my late grandmother who gave my dad 5k to give to me when I was going to move out.

There are alot of things I can do with the money, but Id rather invest it or get some kind of high rate fixed savings account.

You people know alot more about this stuff than I do, so Im all ears. Thanks in advance for all your advice.
20 replies
Sr. Member
Sep 11, 2008
602 posts
35 upvotes
Toronto
What i would do if i have that $$$:
Leave the 6K alone for now.
Use the other 5K to open a TFSA and buy CND bank Stocks.
revisit them when you ready to buy a house (5 -10 yrs), you find that you will have a good downpayment.
Deal Expert
User avatar
Feb 9, 2003
19893 posts
4113 upvotes
9347934 downvotes
Put 5k into a TFSA and the rest into an RRSP. If you want to buy a house down the road, you can take it out of the RRSP, otherwise, save for retirement. Leave the 5k in the TFSA until you decide what to do with it.

Honestly though, don't be afraid to spend some of it. You're at the prime of your life, and you will likely make more money in the future. Find a balance between wasting the money and hording it. Also, consider what your Grandmother would have wanted you to do with the money. She may have wanted you to enjoy it, maybe save it for a rainy day.
Member
Jan 28, 2004
269 posts
8 upvotes
Toronto
Deal4US wrote: What i would do if i have that $$$:
Leave the 6K alone for now.
Use the other 5K to open a TFSA and buy CND bank Stocks.
revisit them when you ready to buy a house (5 -10 yrs), you find that you will have a good downpayment.
I had a good laugh at this one.

Thanks.
Sr. Member
User avatar
Feb 21, 2009
579 posts
15 upvotes
Decivox wrote: Hey guys, I am really in need of some help here.

I am 19 and have no real experience in investing or saving large amounts of money. This is the story of how I came to aquire the money.

The first ~6k of the money is in an account that my parents have been putting money into since I was born. It is a CIBC Wood Gundy Investment account. All I have is the paper with the current balance on it, it says that Jan 30 2009 it was worth 5,430 and on June 4th its now worth 5,900. On the side of the statement is the U.S exchange rate. So I am assuming that its fluxuating because of the current market conditions? I have no clue as I am used to fixed interest bank accounts.

The second amount is just a 5000 dollar check made out from my dad. He gave it to me under the direction of my late grandmother who gave my dad 5k to give to me when I was going to move out.

There are alot of things I can do with the money, but Id rather invest it or get some kind of high rate fixed savings account.

You people know alot more about this stuff than I do, so Im all ears. Thanks in advance for all your advice.
A 19 year old with that much money will most likely waste it on car glad to see you looking for something more constructive.

Answer will depend on many things:
Are you student? will you be?
Do you have debt (credit cards or OSAP etc)
do you live at home? will you for long?
do you work full time or part time? will income be stable?
How long before you need the money?

here is my personal suggestion:
If you are done school and wont be returning with no debt, I say invest the money in a TFSA (as the above reply said) $5000 now and the other $5000 next year buy some good ETF's or couple strong dividend paying companies. and forget about it, it was money that came to you unexpected so just forget about it and let it grow for a few years.

Again it all depends on your personal situation, so there is no perfect answer.
One thing i'd like to point out is the power of compound and early investing, but seems like you are already aware of it.

good luck!
Member
Mar 15, 2008
358 posts
231 upvotes
ray420 wrote: A 19 year old with that much money will most likely waste it on car glad to see you looking for something more constructive.

Answer will depend on many things:
Are you student? will you be?
Do you have debt (credit cards or OSAP etc)
do you live at home? will you for long?
do you work full time or part time? will income be stable?
How long before you need the money?

here is my personal suggestion:
If you are done school and wont be returning with no debt, I say invest the money in a TFSA (as the above reply said) $5000 now and the other $5000 next year buy some good ETF's or couple strong dividend paying companies. and forget about it, it was money that came to you unexpected so just forget about it and let it grow for a few years.

Again it all depends on your personal situation, so there is no perfect answer.
One thing i'd like to point out is the power of compound and early investing, but seems like you are already aware of it.

good luck!
Yes I am a student. But my parents also had another fund for schooling. When my mom passed a few years ago from cancer, the insurace company put a decent amount in there, enough to pay for the program I am in now. So the program I am going through now is paid for so I wont be carrying any student debts. Although I am thinking of getting a Degree later on (right now I am going for my Diploma), which will come out of my own pocket. I have a credit card, but I pay it off every month so I have no debt on that, and since my schooling is paid for I have no OSAP to pay. I current live at home, but plan on moving it sometime in the new year. Currently, I work full time. It is a paid co-op. I work 35 hours a week and make about $13 an hour, which is pretty good money for someone my age I would think. In the fall I will be returning to the classroom full time and will only work retail part time making minimum wage (9.50/hr). Then in the winter I will be back at a full time paid co-op placement.
Sr. Member
User avatar
Feb 21, 2009
579 posts
15 upvotes
Decivox wrote: Yes I am a student. But my parents also had another fund for schooling. When my mom passed a few years ago from cancer, the insurace company put a decent amount in there, enough to pay for the program I am in now. So the program I am going through now is paid for so I wont be carrying any student debts. Although I am thinking of getting a Degree later on (right now I am going for my Diploma), which will come out of my own pocket. I have a credit card, but I pay it off every month so I have no debt on that, and since my schooling is paid for I have no OSAP to pay. I current live at home, but plan on moving it sometime in the new year. Currently, I work full time. It is a paid co-op. I work 70 hours a week and make about $13 an hour, which is pretty good money for someone my age I would think. In the fall I will be returning to the classroom full time and will only work retail part time making minimum wage (9.50/hr). Then in the winter I will be back at a full time paid co-op placement.
70 hrs/week wow thats crazy! but good for you, you make well over $3000/month right now. Well seems like you got things well in order, no debt, decent income, low expenses. I think my previous idea should work fine for you, given your income you can probably save/invest more through the year. ones you graduate I'd look at the current job and see if you can maybe afford to purchase a place, if not maybe staying an extra year at parents and saving some more should get you a big chunk for a downpayment.
Member
Mar 15, 2008
358 posts
231 upvotes
ray420 wrote: 70 hrs/week wow thats crazy! but good for you, you make well over $3000/month right now. Well seems like you got things well in order, no debt, decent income, low expenses. I think my previous idea should work fine for you, given your income you can probably save/invest more through the year. ones you graduate I'd look at the current job and see if you can maybe afford to purchase a place, if not maybe staying an extra year at parents and saving some more should get you a big chunk for a downpayment.
Oops! Haha I am sorry.. I meant to say 70 hours a paycheck... so 35 hours per week.

I do wish it was the other way around though haha
Member
User avatar
Apr 9, 2007
497 posts
130 upvotes
Vancouver
Put all 11k on Red 14 and pray
Member
Mar 15, 2008
358 posts
231 upvotes
Also, do you have any TFSA suggestions? Right now I have a HSBC Direct Savings account as my main bank account. They offer a TFSA with 1.05% interest. Are there any better options out there?

I remember my Direct Savings account used to be like over 3% at one point, and now its dropped :( .
Member
User avatar
May 4, 2004
495 posts
54 upvotes
ask your parents, they obviously have a good idea of investing
Deal Addict
User avatar
Jan 19, 2007
1451 posts
811 upvotes
Torontario
:cheesygri young paduan, put some more zeroes at the end of the balance of your account - then this becomes a case to be discussed.
Member
Dec 11, 2006
413 posts
1 upvote
Scarborough
OP and I have something in common, I just locked up the money in 18 months GIC with TD @ 3.75% right before all the savings accounts started taking major hits
Banned
User avatar
Jul 4, 2008
1434 posts
32 upvotes
Vancouver, BC
Decivox wrote: Also, do you have any TFSA suggestions? Right now I have a HSBC Direct Savings account as my main bank account. They offer a TFSA with 1.05% interest. Are there any better options out there?

I remember my Direct Savings account used to be like over 3% at one point, and now its dropped :( .
yeah, it was 3.75% at one point if my memory serves me correctly.
do you want something guaranteed? then just lock it into a GIC (rates are terrible right now) or savings account (rates are also terrible). or can you afford to lose some of your money? if so talk to your HSBC and ask them about some higher risk investment options.. (but if you decide to do this, make sure it's with your TFSA)
noxe2 wrote: OP and I have something in common, I just locked up the money in 18 months GIC with TD @ 3.75% right before all the savings accounts started taking major hits
... so how does this help the OP?
lol, i got 4.5% GIC for 2 years at CIBC about 6months ago... since we're stating random facts.

best bet is the TFSA
Sr. Member
Dec 3, 2002
517 posts
44 upvotes
BC
While saving all of it may be the best solution from a financial point of view, I think the OP should take portion of that and spend it to reward himself for being in a decent spot moneywise.

My suggestion is to save 10k on something secure (CTFS savings @ 2%) and then spend 500-1000 on something you really have been wanting (all at once or over a number a things). A new laptop, iphone, clothing, a nice dinner with the gf, a night out at the casino, etc.

IMO, small rewards helps to keep you on track when savings.
Deal Expert
May 30, 2005
49009 posts
10302 upvotes
Richmond Hill
I'm about the same age as you with around the same savings. I have $5K in TFSA, $500-1000K floater (for my regular expenses), another $5K in investments and a few thousand in a Canadian Tire account earning 2.25% interest.
Tons of things for sale!
Silver Coins and Numismatics | Heatware
Deal Addict
User avatar
Apr 22, 2005
1401 posts
355 upvotes
Starcraftjunkie wrote: While saving all of it may be the best solution from a financial point of view, I think the OP should take portion of that and spend it to reward himself for being in a decent spot moneywise.

My suggestion is to save 10k on something secure (CTFS savings @ 2%) and then spend 500-1000 on something you really have been wanting (all at once or over a number a things). A new laptop, iphone, clothing, a nice dinner with the gf, a night out at the casino, etc.

IMO, small rewards helps to keep you on track when savings.
I say take a nice vacation. Take 2 g's and go to some amazing all inclusive caribbean hotspot with the gf for a week you'll remember for the rest of your life.

Then invest the rest.
Sr. Member
Jul 4, 2004
928 posts
28 upvotes
Toronto
I'd consider a drug habit, for a little bit. Don't blow it all, but definitely take a few grand and go on a bender on something fairly hard. I recommend this in tandem with a trip somewhere for 6 months or so. Just sort of unplug and wander. Experience things.

Think of when you're 40 - would you rather look back on your formative years and think 'Yeah man, I totally maxed that GIC, now I've got a carport!', or be planning a trip back to Chile or wherever to visit those friends you got really, really high with on top of a freaking mountain?

Choose wisely!

Top