Q: I recently moved to the U.S. from the Caribbean. I have $5,000 and I’m trying to obtain a second degree. I know this money can’t pay for my school fees, but it could pay a part. Or I could get a regular job and invest the $5,000. Please advise.
— D. Dickodeen, Via the Internet
A: My advice to you would be to get a job and search for financial aid and scholarships to p
ay for school. Even if you have to take out loans for school, it will be worth the investment in the future. As you’ve pointed out, the $5,000 you have will not pay for the total cost of your education — in fact, it will barely pay for the cost of one semester of advanced degree classes at most colleges and universities.If you get a job now, you can take that $5,000 and begin build
ing toward a future goal — the down payment on a home, for instance. I would advise using $3,000 of your money to open up a Roth IRA (the limit for contributions in 2005 is $4,000). This will allow you to begin saving for your retirement and also give you the flexibility to use the money as a down payment for a home in five years without incurring the 10% early withdrawal penalty.Your remaining $2,000 could be placed in a money market account, a high-interest savings account, or a six-month CD. While you’ll only earn between 2% and 2.5% interest, you’ll have some money available to you in case of an emergency.