vania-janet/multiturn-rag-retrieval-data huggingface dataset:
I'm going to assume that you want to be invested all the time and each trade consists in selling a security and buying another one (similar to your example). How much commissions you are willing to pay depends on several factors, but one way to think about it is as follows. You have a position in stock A and you want to switch to stock B because you think it will perform better. If you think there's a good chance (>50%) that B will outperform A by more than x% then you can happily pay up to x/2% commissions and still make money over a long time horizon. If you like formulae, one way to express it is: Where: Example: if you tend to be right 51% of the time (hit rate), and gain 110% more than you lose on average (win loss ratio), you can see that your expected profit is: 5.1% - commissions, so you could pay 2.5% commissions on entering and closing the position and still make money*. Unfortunately, common sense, statistics and numerous studies tell us a sad truth: on average, people have a hit rate of 50% and a win/loss ratio of 100%. Which means that their expected profit per trade is 0% - commission. Based on that crude observation - unless you can prove to yourself that you are better than average - you should aim at reducing commissions paid to your broker as much as possible through: * 51% and 110% are not random numbers, they correspond to the results of the top 15% (professional) managers in a research paper using a sample of 215 funds managing $150bn.
A safe investment would be to get a 5-year CD from Ally Bank.  No minimum deposit and no monthly maintenance fees.  1.74% APY at the moment.  I would choose a 5-year CD since the early withdrawal penalty is only 60 days interest, which will be negligible for a $100 investment and increasing the term significantly increases your interest rate. Regarding other suggestions: Even if you find a way purchase stock commission free, it will probably cost a $5-$10 commission to sell, wiping out probably a year or two of gains.  Also, I-Bonds must be held for a year minimum, which is problematic. At the end of the day, it's probably not really worth your time to do any of these.  $2 a year or $5 a year, it's still fairly insignificant and your time is surely worth more than that.
Simple math. Take the sale proceeds (after trade expenses) and divide by cost. Subtract 1, and this is your return. For example, buy at 80, sell at 100, 100/80 = 1.25, your return is 25%. To annualize this return, multiply by 365 over the days you were in that stock. If the above stock were held for 3 months, you would have an annualized return of 100%.  There's an alternative way to annualize, in the same example above take the days invested and dive into 365, here you get 4. I suggested that 25% x 4 = 100%. Others will ask why I don't say 1.25^4 = 2.44 so the return is 144%/yr. (in other words, compound the return, 1.25x1.25x...) A single day trade, noon to noon the next day returning just 1%, would multiply to 365% over a year, ignoring the fact there are about 250 trading days. But 1.01^365 is 37.78 or a 3678% return. For long periods, the compounding makes sense of course, the 8%/yr I hope to see should double my money in 9 years, not 12, but taking the short term trades and compounding creates odd results of little value.
"Read the book, ""Slicing Pie: Fund Your Company Without Funds"". You can be given 5% over four years and in four years, they hire someone and give him twice as much as you, for working a month and not sacrificing his salary at all.  Over the four years, the idiot who offered you the deal will waste investors money on obvious, stupid things because he doesn't know anything about how to build what he's asking you to build, causing the need for more investment and the dilution of your equity. I'm speaking from personal experience.  Don't even do this. Start your own company if you're working for free, and tell the idiot who offered you 5% you'll offer him 2% for four years of him working for you for free."
"Well depends but ""on average"" the stock market has historically returned somewhere around 10% per year.  Note, this can vary wildly from year to year see http://en.wikipedia.org/wiki/S%26P_500#Market_statistics So it would be roughly 2.8 years to get your 30% if you happen to get the average market return for those 3 years, but the chances of that happening exactly are slim to none.  You could end up with +50% or -30% over that ~3 year period of time - so the calculation doesn't do you that much good for that short period of time, but if you are talking a span of 30 years then you could plan using that as a very rough ballpark. Good rule of thumb is you shouldn't put any money in the stock market you think you will need anytime in the next 5 years. Formula to figure out total gain would be  Principal x (1+ rate of return) ^ years"
Currently my online savings account pays an interest rate of 1.25%.  With 100K, I can earn about $104 per month in that account.  No risk, no timing, no fuss. So in theory you can make money by small changes in the valuations of stock.  However there are often better, risk free options for your money; or, there are much better options for returns with much less risk, but more than that of a bank account.
All the above advices plus this: For you first house, you should start smaller. Buy a 100k or less condo if possible, then grow from there. You sell every 5 years or so when the market is favorable and you will slowly get to that nice 250k house.
"You can certainly try to do this, but it's risky and very expensive. Consider a simplified example. You buy 1000 shares of ABC at $1.00 each, with the intention of selling them all when the price reaches $1.01. Rinse and repeat, right? You might think the example above will net you a tidy $10 profit. But you have to factor in trade commissions. Most brokerages are going to charge you per trade. Fidelity for example, want $4.95 per trade; that's for both the buying and the selling. So your 1000 shares actually cost you $1004.95, and then when you sell them for $1.01 each, they take their $4.95 fee again, leaving you with a measly $1.10 in profit. Meanwhile, your entire $1000 stake was at risk of never making ANY profit - you may have been unlucky enough to buy at the stock's peak price before a slow (or even fast) decline towards eventual bankruptcy.  The other problem with this is that you need a stock that is both stable and volatile at the same time. You need the volatility to ensure the price keeps swinging between your buy and sell thresholds, over and over again. You need stability to ensure it doesn't move well away from those thresholds altogether. If it doesn't have this weird stable-volatility thing, then you are shooting yourself in the foot by not holding the stock for longer: why sell for $1.01 if it goes up to $1.10 ten minutes later? Why buy for $1.00 when it keeps dropping to $0.95 ten minutes later? Your strategy means you are always taking the smallest possible profit, for the same amount of risk. Another method might be to only trade each stock once, and hope that you never pick a loser. Perhaps look for something that has been steadily climbing in price, buy, make your tiny profit, then move on to the next company. However you still have the risk of buying something at it's peak price and being in for an awfully long wait before you can cash out (if ever). And if all that wasn't enough to put you off, brokerages have special rules for ""frequent traders"" that just make it all the more complicated. Not worth the hassle IMO."
The plan doesn't make sense.  Don't invest your money. Just keep it in your bank account. $5000 is not a lot, especially since you don't have a steady income stream. You only have $1000 to your name, you can't afford to gamble $4000. You will need it for things like food, books, rent, student loans, traveling, etc. If you don't get a job right after you graduate, you will be very happy to have some money in the bank. Or what if you get a dream job, but you need a car?  Or you get a job at a suit & tie business and need to get a new wardrobe? Or your computer dies and you need a new one? You find a great apartment but need $2500 first, last & security? That money can help you out much more NOW when you're starting out, then it will when you're ready to retire in your 60's.
"A good question -- there are many good tactical points in other answers but I wanted to emphasize two strategic points to think about in your ""5-year plan"", both of which involve around diversification: Expense allocation: You have several potential expenses. Actually, expenses isn't the right word, it's more like ""applications"". Think of the money you have as a resource that you can ""pour"" (because money has liquidity!) into multiple ""buckets"" depending on time horizon and risk tolerance. An ultra-short-term cushion for extreme emergencies -- e.g. things go really wrong -- this should be something you can access at a moment's notice from a bank account. For example, your car has been towed and they need cash. A short-term cushion for emergencies -- something bad happens and you need the money in a few days or weeks. (A CD ladder is good for this -- it pays better interest and you can get the money out quick with a minimal penalty.) A long-term savings cushion -- you might want to make a down payment on a house or a car, but you know it's some years off. For this, an investment account is good; there are quite a few index funds out there which have very low expenses and will get you a better return than CDs / savings account, with some risk tolerance. Retirement savings -- $1 now can be worth a huge amount of money to you in 40 years if you invest it wisely. Here's where the IRA (or 401K if you get a job) comes in. You need to put these in this order of priority. Put enough money in your short-term cushions to be 99% confident you have enough. Then with the remainder, put most of it in an investment account but some of it in a retirement account. The thing to realize is that you need to make the retirement account off-limits, so you don't want to put too much money there, but the earlier you can get started in a retirement account, the better. I'm 38, and I started both an investment and a retirement account at age 24.
My suggestion is that you speak with a financial adviser that specializes in Islamic investing. For the long term there are Islam approved mutual funds that only invest in non-banking organizations, and I would assume there are more conservative options for the short term as well (3-4 years). Although you may not feel the effects of inflation all that much in just a few years, it would still be beneficial to utilize programs that allow you to earn a return on your money. (I may not have said that for $2,500 but for $25,000 I think it's worth looking into.) Also, some scholars suggest that it is even allowed to invest in mutual funds that deal with banks, as long as you calculate the portion of your return that came from the bank charging interest, and donate that amount to charity.
You could try to refine your options strategy:  For instance you could buy the USD 750 call option(s) you mentioned and at the same time sell (short) call options with a higher strike price, which is above the share price level you expect that Apple will trade at in one year (for instance USD 1,100).  By doing this, you would receive the premium of the call option(s) with the higher option, which in turn would help you finance buying your USD 750 call(s). The net effect of this trading strategy would be that you would give up the extra profit you would earn if Apple would rose above USD 1,100 (the strike price of the call option sold short). Your total risk would be even less than with your actual strategy (in my view).
In my mind, when looking at a five year period you have a number of options. You didn't specify where you are based, which admittedly makes it harder, to give you good advice. If you are looking for an investment that can achieve large gains, equities are impossible to ignore. By investing in an index fund or other diverse asset forms (such as mutual funds), your risk is relatively minimal. However there has historically been five year periods where you would lose/flatline your money. If this was to be the case you would likely be better off waiting more than five years to buy a house, which would be frustrating. When markets rebound, they often do it hard. If you are in a major economy, taking something like the top 100 of your stock market is a safe bet, although admittedly you would have made terrible returns if you invested in the Polish markets. While they often achieve lower returns than equity investments, they are generally considered safer - especially government issued bonds. If you were willing to sacrifice returns for safety, you must always consider them.  This is an interesting new addition, and I can't comment on the state of it in the United States, however in Europe we have a number of platforms which do this. In the UK, for example you can achieve ~7.3% returns YoY using sites like Funding Circle. If you invest in a diverse range of businesses, you have minimal risk from and individual company not paying. Elsewhere in Europe (although not appropriate for me as everything I do is denominated in Sterling), you can secure 12% in places like Georgia, Poland, and Estonia. This is a very good rate and the platforms seem reputable, and 'guarantee' their loans. However unlike funding circle, they are for consumer loans. The risk profile in my mind is similar to that of equities, but it is hard to say. Whatever you do, you need to do your homework, and ensure that you can handle the level of risk offered by the investments you make. I haven't included things like Savings accounts in here, as the rates aren't worth bothering with.
The following advice assumes that you have a significant amount already in the account in cash equivalents. If you are only talking a few hundred bucks or so, then just jump in at the next dip (like today's). If you have a larger amount to move into equities, the safest approach is to gradually move it into investments over some period of time at regular intervals regardless of what is going on in the market. This mitigates the risk of investing it all into an fund that is peaking at the exact moment you buy.  So, for example, you might invest 20% of the total amount each month for 5 months to gradually get into the market. The larger the amount you are investing, the more you probably want to spread it out, but don't spread it out much further than a year or you are losing opportunity cost by leaving your money in cash-type investments with likely a very poor rate of return. This strategy is called dollar-cost averaging if you want to research it more.
You need to be clear about who gets your money: If you pay the existing owner $25K and (s)he gives you half the business, then you now own half of a $50K business an the original owner has an extra $25K in spending cash.  The value of the business has not changed. If you contribute $25 to the company, new equity shares are created.  Shares should be priced correctly, meaning you now own $25K worth of shares in a company worth $75k, so you should have 1/3 of the outstanding shares (counting both old and new shares).  If you get more or less than this, then the transaction has happened in an unfair way. If this is a public company, that would most likely be illegal and the SEC may throw you in jail.  If it was a private company and your friend created enough shares that you own half the company, then (s)he has given you a gift. If you are contributing to the company at a fair price, you would need to contribute $50K in order to end up with half the equity of the new and now more valuable firm. In that case the firm would be worth $100K after your contribution. Bottom line, this is a common and not complex transaction and should end up with a completely fair outcome.  Any unfair situation you can imagine is probably based on false assumptions or a situation where a non-arms-length transaction is transferring wealth contrary to normal rules and procedures.
They start at six figures with just a bachelor's, and their raises tend to be pretty substantial. Many of them will earn more than $200k before they are age 30. Basically, if they were to live relatively normal lifestyles (many do not), save and invest most of their earnings, then they should be able to become a millionaire at around age 30 while just following their career path, without taking big risks such as starting a business.
"There is only one way to create ""stable"" income using options: write COVERED calls.   This means you must own some stocks which offer an active and liquid option market (FB would be good; T would be useless.) In other words, you need to own some ""unstable"" stocks, tickers that have sometimes scary volatility, and of course these are not great stocks for a retiree. But, let's assume you own 500 shares of FB, which you bought in June of 2015 for $75.    Today, you could have been paid $2,375 for selling five Mar18'16 $105 Calls. Your reasoning is:  So, the rule is: ONLY SELL COVERED CALLS AT A PRICE YOU WOULD BE HAPPY TO ACCEPT.    If you follow the rule, you'll generate more-or-less ""stable"" income. Do not venture off this narrow path into the rest of Option Land. There be dragons.     You can select strike prices that are far out of the money to minimize the chance of being exercised (and sweeten the deal by collecting an even higher price if the stock flies that high).    If you are thinking about doing this, study the subject thoroughly until you know the terminology backwards and forwards. (Don't worry about ""the greeks"" since market makers manipulate implied volatility so wildly that it overrides everything else.)"
Yes, you can indeed become rich by investing even small amounts over time. Let's say that you begin with nothing invested, and you start investing $100 per week. Suppose you choose to put your money in an S&P 500 index mutual fund. The CAGR (Compound Annual Growth Rate) of the S&P 500 over the last 35 years has been about 11%. (That 35 years includes at least two fairly serious crashes.) You may get more or less than that number in the future, but let's guess that you'll average 9%. 35 years from now, you would be a millionaire ($1.2 Million, actually). This math works out for anyone, no matter who your parents are, where you are from, where you went to school, etc. Yes, you have a better chance of becoming wealthy the more you invest, the longer you have to stay invested, and the better choices you make in your investments.  By starting early, you will maximize your time invested, which allows you the flexibility to be more conservative in your investments and to invest smaller amounts.  But for those with a shorter time to invest, it is still doable for most people.  Get your financial life under control by eliminating your debt, setting a household budget, and investing for the future.
I will use 10% of this 20K to pay the loan back on an annual basis agreement An annual payment of 0.8% ($2,000 / $250,000) is nowhere near large enough.  The interest alone is going to be well over $10,000 (and probably closer to $20,000 on an unsecured loan), so you need to plan for at least a $20,000 - $30,000 annual payment, depending on the terms (length and interest rate) on the loan.   But in general... is this sustainable/safe?  Essentially what you are doing is using leverage to increase the amount you can invest.  While this is fantastic when the market rises, it can go horribly wrong when the market goes down.  Generally it is unwise to fund a risky (meaning there are large swings in return) investment with a risk-free (meaning you'll always make a payment) loan. If you want to see what could happen, forecast a 20% market drop and see what you are left with (obviously you'll need to make the loan payment out of your balance since you won't have any gains to pull from).  An average of 10-12% over a long period of time is reasonable, but the variance can cause the return to be anywhere from -40% to +40% in one year.  Can you afford those losses?   Here's an actual example: If you were to invest $250,000 in the S&P 500 in January 2000 with an 8% interest-only loan, your next three years' returns would be: After three years, assuming an interest-only payment of $20,000, your balance would be just over $100,000, you'd still owe $250,000, and you'd still be making $20,000 in interest payments.  If your loan interest rate was 25% (which is not unreasonable for an unsecured loan), you'd be bankrupt after 3 years - you'd still owe $250K but could not make the interest payment. No, this is not a good idea.  The only time you should borrow money to invest in when you have control over the returns.  So if you wanted to start your own business, had a stable business plan, and had much more certainty over the returns, the borrowing money might be plausible.   But borrowing money to do passive investment is a huge mistake.
Basically, every transaction you make having to do with your business can be simplified down to debits (money/value) increasing and credits (money/value) decreasing. For a very simple company you can assess this by looking at net profits. Which can be calculated with: Revenues, are made up of money earned by services performed and goods sold. Expenses are made up of operating costs, materials, payroll, consumables, interest on liabilities, etc. Basically, if you brought in 250K but it cost you 100K to make that happen, you've made 150K for the year in profit. So, for your taxes you can count up all the money you've made (Revenues), subtract all of the money you've paid out (Expenses) and you'll know how much profit you've made. The profit is what you pay taxes on. The kicker is, there are gray areas when it comes to deducting expenses. For instance, you can deduct the expense of using your car for business but you need to keep a log and can only expense the miles you traveled explicitly for business. Same goes for deducting dedicated workspaces in your house. Basically, do the research if you're not 100% sure about a deduction. If you don't keep detailed books and try to expense stuff without proof, you can get in trouble if the IRS comes knocking. There are always mythical stories about 'that one guy' who wrote off his boat on his taxes but in reality, you can go to jail for tax fraud if you do that. It comes down to this. At the end of the year, if your business took in a ton of money you'll owe a lot in taxes. The better you can justify your expenses, the more you can reduce that debt. One last thing. You'll also have to pay your personal federal/state taxes (including self-employment tax). That means medicare/social security, etc. If this is your first foray into self-employment you're probably not familiar with the fact that 1099 employers pick up 1/2 of the 15% medicare/social security bill. Typically, if you have an idea of what you make annually, you should be paying this out throughout the year.
I started my account with $500 so I know where you're coming from.  For the words of caution, in about 2009 we entered a pretty significant bull market.  During this period you could basically buy almost any big name company and do pretty well for yourself.  So don't be too cocky about your ability to pick winners in the middle of a bull market.  Over the last few years you'd have to try pretty hard to consistently pick losers. I absolutely think you should put real money in the game when you have this sort of interest.  However, at your $400-600 level broker fees will eat any sort of active trading or short term profit you could muster.  Stock trading is not a great way to make money in the short term.  If you're looking to save for something specific you should put that money in a zero risk savings account.   You should do more research on brokers.  Find the lowest possible trade commission at an organization where you can meet the account opening minimum.  A $10 commission is 11% more than a $9 commission.