help an airman out!

[emanbooter17]

Im 21 years old and in the Military and have 5000 dollars id like to invest. I have little to no living expenses as i live in a free dorm and recieve money for food have no bills and do not own a car. Im looking to invest 5000 dollars i have saved up. I want something very aggresive that can create income in the near future. Any opinions would very much be appreciated.

[kork13]

Always nice to see younger Airmen being smart with their money, as often as I see quite the opposite scenario...

A few questions I have before suggesting anything specific:
1) What are your near- and long-term financial goals?
- This is critical. If you don't know what you're working towards, you can't make smart choices.
2) Define "near future", and be more specific with what you want to do with this money than "create income".
- Be aware, $5000 on its own won't give you much in the way of regular income. At best, you can expect to earn $20-$30/mo on this amount.
3) Are you saving regularly? Will you be adding money to this $5k, or is this a one-time shot?
- I expect you are, having been able to amass $5k in probably 2-3 years on a new Airman's salary. However, if you're not saving at least 10% of your monthly pay (preferably 15% or more if possible), make it a goal to slowly build up to that point.
4) Is this all of your total cash savings, or is this only part of what you have in savings?
- If this is everything, don't even consider investing it all right now. Keep no less than a full month's pay (guessing ~$2k?) in a savings account. You never know when something will happen and you need some cash immediately. While you probably don't need a full 6 months' worth as most people are often told (in the military we're blessed with pretty good job security), 3 months' worth of pay in savings is probably a realistic target. If you can do that and still have money available to invest, the press with looking at ways to invest it.

Answer those, and you'll probably get some more beneficial responses. In general terms, however, I'd recommend you look at starting into investing with a couple basic index mutual funds. An S&P 500 index fund would be a perfect starting point, and it invests in a wide variety of large companies from Apple and General Electric to Exxon-Mobil and Coca-Cola. As for "aggressiveness", you might think of this as "70%". However, when you're just starting out, you don't want to dive straight into precious metals, commodities, REITs, and other highly-volatile investments. Start out at a measured pace, and build yourself up over time.

Last thing I'll say upfront... Have you started a Roth IRA? This would be a great opportunity to do so if you haven't. That way you can start into investing and get a jumpstart on your retirement savings too. Coincidentally, the annual contribution limit is $5000 per year -- if possible, you should try to max that every year from here on out.

[disneysteve]

Im looking to invest 5000 dollars i have saved up. I want something very aggresive that can create income in the near future.

What do you mean by "create income"? $5,000 isn't going to generate much income no matter how you invest it, especially not in the near future. The best you could probably do is using it to buy a dividend-producing stock. You might get 5-7% return that way, but that's still only $250/year or so before taxes.

[JessieHanz]

Yeah right, I agree with DisneySteve, buying a dividend producing stock is the best choice for investment for a young wise man like you..