I'm a student and live in Europe. I want to invest with debt - student loan debt (topic).
Here's my thought,
At the moment, I'm not in any debt right now. I only receive allowance from the government. Although, most of friends take student loans. However, they go out and party, paying their bills, and do other crazy stuff with it. I'm thinking of using all of it for investment opportunities.
This is how it would work:
Currently, I should receive $205(307) per week, or $821(1228) 4 weeks, or $4105(6139) 20 weeks.
() marks the sum of debt & allowance.
Interest rate is at 2.4 % as of 2010. Debts are acquired from government supported agency (my only option)
I was thinking of taking out approximately $10,000.
Function
1. This money have to be paid back at a maximum 25 years from the day I stop.
2. It must be repayable after 6 months I finish University.
3. Also, if things would really get bad I can apply to pay a smaller amount.
The area of investments are huge. I was thinking going into precious metals and stocks, foreign stocks in Asia or Canada. So my diversification would certainly look something like this: 60 % (Gold), 30 % (stocks) and 10 % (Silver)
Someone told me that commodities can be very volatile:
Corn (~$240/ton in '08, ~$120/ton in '09, $200/ton currently)
Oil ($149/barrel in '08, near $40/barrel last year, now around $80/barrel)
..And that Supply/demand, political risks, weather risks, etc. all play a significant role in commodities so at least to be aware that while there could be substantial gains as food & energy will always hold value, things won't be linear by any means.
I know the risks are great but I also see opportunities as well. Gold has risen significantly since '08 and I always hear stories that it could rise up to $8,000 some day in the future. I still have more than 2 years in School, so I'm sure Gold will be up a lot by then. Now the goal would be to maximize profits to pay off my debt and keep a good return as well.
I do know basic economics. I have read some of Peter schiff's books and I think I have a clue on most of his advice - but still uncertain if it's worth all the mysteries involved. I would eventually go with a brokerage firm.
What's left?
I would like to hear your advice.
Thank you.
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