$25k to Invest during college.?

I'm currently a freshman in community college and plan on transferring my junior year to either UT Austin, Texas A&M or University of North Texas to major in finance. When I transfer, I'll take out a student loan. I have no debt and my 97' Buick Regal is paid off. I also will have amassed $25k from my McJob when I transfer. What should I do/invest with the $25k?

I thought about using the $25k as a down payment if I go to College Station or Denton where the housing market is cheap. Because the price of housing in Austin is skyrocketing, this wouldn't be an option if I went to UT.

So what should I do/invest with the $25k?

I'll still have a job while I'm in school.

Standard investment advice is that you should invest in a diversified mix of stocks, bonds, and money market funds. You want to buy a diversified portfolio of stocks as individual stocks are too risky. Most folks have a dificult time buying a properly balanced portfoilio of stocks on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Unless you know what you are doing, it is best to buy mutual funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low cost funds. If you are like most people you will invest part of your money aggressively in stock funds, and part conservatively in money market funds and bond funds. Vanguard.com has an on-line questionnaire which will give you an idea of how to do "Asset Allocation," determining how much to put in each type of fund.

If your company offers a 401K plan at work, try to invest the most you can. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea.

I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, I would suggest putting ~70-80% of your money in the Vanguard Total Stock Market Index Fund. and ~20-30% in a foreign stock index fund. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion.

Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.

Sources:

http://www.vanguard.com/VGApp/hnw/planni...
http://www.fool.com/school.htm
http://sec.gov/investor/pubs/assetalloca...
http://www.diehards.org/readsites.htm
http://finance.yahoo.com/education/begin...
http://finance.yahoo.com/funds/basics

Asset Allocation Calculators
(Determining how much to put in stocks and how much into bonds and money markets is a personal decision depending on your financial status. These Asset Allocation questionaires give you a rough idea how to do this. I like Vanguard best, but try some of the other sites as well.)
https://flagship.vanguard.com/VGApp/hnw/...
https://ais2.tiaa-cref.org/cgi-bin/WebOb...
http://www.ifa.com/SurveyNET/index.aspx

Web forum: http://www.diehards.org/
(Many investment web forums are overrun by scam artists. This one seems the most legitimate site.)

If you're talking less than a year, I would be conservative with the money. Perhaps a a certificate of deposit, tax frees, etc... As a student w/out cash flow right now I would be concerned with losing the $25K in risky investments right now such as housing or stocks.

First, buying real estate is out. Even if you wanted to put the money on something the loan is based on your ability to make the payments and since you are a student and not working you would not qualify.

What about using the money to pay for your college instead of taking out a student loan? Or at least reduce the amount you are going to borrow and use the money to subsidize the rest. Personally I think this would be the best thing to do with the money. Student loans follow you for a long, long time.

buy as much open land as you can, sit on it, and rent or live in the dorms. you'll double your money in 10 yrs. there's no bank or IRA you can invest in that will yield that kind of return. that's what I would do if I had that money. i've actually been thinking about doing that, but i'd have to make payments that have interest on it. you can't make as much money that way.

My opinion here. I would set aside around $8K and put them in very liquid assets. This will serve as my emergency fund. I will only take them out when it is absolutely necessary.

Next I would set aside around $1K. This would serve as a "Financial Literacy Fund" I will draw out this money to attend seminars or read up books on personal financial planning and investment. Meanwhile I put the $16K in liquid assets first.

During the financial education process, also decide on an investment tool and read up about it, how it works, what are the commission, what causes the price of it to fluctuate and so on. For me I started on Mutual Funds first. Once I understand how mutual funds works, I start to put in money. This is where your $16K comes into the picture.

As I gather experience in investing in mutual funds, I also started reading up on stock investment. Moving on to something riskier but of higher returns. So I am learning about two investment tools now. So you can continue investing and educating yourself until you hit the biggest investment people make and that is real estate.

Hope the information helps!