We'll need some more details about your situation - risk tolerance, how sure you'll need the principal, how aggressive you want/need to be in order to achieve the desired income, etc. Mostly just more clear on what you want and when.
Risk tolerance: I'm generally the "I'll buy the extended warranty" type. So low. But I'm more asking experienced investors what my risk tolerance for this cash should be given my situation. I'm willing to be flexible. There's not much that can keep me awake at night. That said....
I'll
need the principal. I'm quitting my day job and keeping a part-time one waiting tables. I should make enough to cover living expenses, but I'll need the principal to cover school costs/enable me to take out smaller loans and pay them down. There will mostly likely be an unpaid internship in the middle, so I may have to cover all costs out of this money for 6 months.
To make timing clearer:
Current balance $3,495
Goal date: Aug 1, 2014
Target principal 8/1/14: $8500-10000
I'll need this money from Aug 1, 2014 until May or Aug 2016, so roughly 24 months. I do not anticipate being able to contribute to this fund during that time, just take out.
Ideally, I'd like to generate a little something off of an investment to make up for some of what I'll have to take out. Minimize the damage to the principal when I have to start drawing. Barring emergencies (or FAFSA...), I think I'll only have to draw enough for books every semester. Otherwise, I want the cushion to make me comfortable putting part of my income into loan payments before I graduate. I don't want this to have a zero balance after two years of draws, if at all possible, even if I have to draw monthly. I also do not want this to be large enough that FAFSA considers it an asset. I do want some loans, although I anticipate covering more costs with scholarships and out of pocket. I just don't want to be forced to give up my cash. (I'd also like a perfect world, while you're at it >.<)