???GOOD OR BAD MONEY PLANE??? - TravelPUNK Backpacker College Student Budget Travel Message Boards!



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Travel Budget, Money Matters, Financial Talk Mom, can I borrow ten grand?! Gimme yo mastercard! How the heck can I pay for my trip?! Ideas for making money. How much dough do I need?

View Poll Results: Who thinks this is possible????
No fuckin way!!! 7 77.78%
\Maybe/ 2 22.22%
Hell Yeah!!! 0 0%
Voters: 9. You may not vote on this poll

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Old 01-09-2006, 04:47 PM   #1
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"Just an Idea"
I think I figured out a way to save money and make money by saving it!!!

***CD Accounts***

Most banks have CD Account around 5% (4%-7%)

If I kept $50,000 in a CD account @ 5% Intrest a month.

5% of $50,000 = $2,500

$2,500 a month for 12 months = $30,000

I could put the $50,000 back into a new CD Account every year and Keep the $30,000 for just leaving my money alone for 12 months.

THAT'S $30,000 A YEAR FOR DOING NOTHING!!!!

I totally think i'm going to do this!!!!

I could totally travel for the rest of my life and never have to work again!! I mean $30,000 a year isn't a whole lot.... I won't be rich, BUT I will be able to backpack for as long as I wish and never have to worry about getting a job or money ever again.

I could also keep more then $50,000 in the CD Account -

Example..

5% of $100,000 = $5,000

$5,000 a month for 12 Months = $60,000

$60,000 a year for JUST letting money sit in an Account!!!

Same thing... put the $100,000 back and do it again every year!

THATS $60,000 A YEAR FOR DOING NOTHING!!!!

It sounds to good to be true... I know I'll run into some problem with this and it won't really work out that well... But if it does "WATCH OUT ROAD, HERE I COME" I'll be backpacking for the next 20 years... lol

I want to see what some other people think about this, please leave your thoughts...
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Old 01-09-2006, 04:49 PM   #2
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Uh, good luck with that. I know nothing about that crap, but have at it!

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Old 01-09-2006, 04:54 PM   #3
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dude im pretty sure that's 5% a year....
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Old 01-09-2006, 04:54 PM   #4
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dude first you have to save the $50,000...
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Old 01-09-2006, 04:57 PM   #5
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Well, a CD with 5% interest compounded monthly would certainly be...too good to be true.

More likely, a 1 year CD might offer a 5% simple interest rate - which means that after 1 year you get 5% interest added. And if you withdraw your funds prior to the maturity date - you may even get penalized for it.

Sorry!
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Old 01-09-2006, 05:05 PM   #6
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5% a month! BAD ASS. Show me where. 5% a year is hard enough to manage, which give you about $200 per month, minus taxes.
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Old 01-10-2006, 01:16 AM   #7
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Yeah, boss that is 5% a year... so investing $50k would get you a little over $2500/yr. being that it would be compounded daily. To earn $30k a year with an investment return of 5% you would have to invest $600k. Although if you had that kind of cash, the least you could do is invest it in a REIT that offers at least 6.5% return with monthly payout. But that is a whole different story.

Anyways, the idea is fetched up the wrong tree. Sorry man.
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Old 01-10-2006, 06:45 AM   #8
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^ What are some good REITs - and what are their minimum buy-in prices and RORs? Are they just like mutual funds openly traded on the stock market?
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Old 01-10-2006, 06:46 AM   #9
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Hey.. you're kinda sounding like "how to become finacially indendent through real estate" books... I like them RETIRE AT 30!!!!

atleast that is kinda my plan... or become an archeolegist in the middle east (ok, I just watched something on Lawrence Arabia)
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Old 01-16-2006, 09:48 PM   #10
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Yea its 5% per year. You divide the number of days by 360 (not sure why, but thats it) and that much of 5% is the amount gained. If you start saving now, IRA, CD, 401k stuff, bank accounts could be monstrous when you are older.
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Old 01-16-2006, 10:29 PM   #11
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Sorry but I have to agree with everyone else, 5% a month is more than a lot of day traders make. I have 2 CD's and it's just like everyone else said, compouned over a year, you can only touch it once your CD matures otherwise you get a big chunk taken out. The good news is 5% is a decent return (I'm only getting 2.94) and average inflation is 3% a year, that means your money will be worth more at maturity, while mine roughly stays the same (vs someone who keeps their money under a mattress who actually loses money when you account for inflation).

Welcome to the financial world (remember reward favors risk, little risk, little reward)
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Old 01-17-2006, 10:00 AM   #12
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Working in the field.... Its 5% a year my friend, im sure you just saw that HSBC commercial and got all excited. Go for some ETF's or a diversified mutual fund package (much much lower risk). Remember, investing is for the long term, not short term, think 3-5 years.
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Old 01-24-2006, 07:35 AM   #13
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To the original poster who confused months and years, even with the magic of compounding, your $50,000 is going to double every 14.4 years.

Not exactly the holy grail.

Quote:
Sorry but I have to agree with everyone else, 5% a month is more than a lot of day traders make.
Popular belief that something like 90%+ of traders make a loss. 5% a month would be incredible especially if liquidity didn't kill you as your positions got larger.

Quote:
(I'm only getting 2.94) and average inflation is 3% a year
Why would you "invest" your money if you knew you were making a real loss on the "investment"? Top off your 3% inflation figure with the fact that the actual inflation figure is much higher than what the fed serve up to us as a result of their botched calcs that keep the politicians happy and you find yourself going backward real fast.
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