So I've saved roughly about $35,000 working the past two years and have that sitting in a savings account. I know its probably not the best place for it, so does anybody have any advice on where i should put some of it? Should I invest? Are there better accounts I can put some in?
Financial advice
- Thread starter btrboyev
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I'm a major advocate of mutual funds. I get ~15-20% annual return on mine. My wife and I split our savings into three portions - short term (money market, savings accounts), mid-term (mutual funds) and long-term (college savings for the kids, equity in the house, ROTH IRAs for us).
I assume that your are relatively young, as in not retiring in the next 10 years, since you are posting on GAF. Thus, my recommendation is to invest it. Put much of it in a growth mutual fund, also some CD's, and if you'r feeling a little risky, put some of it into individual stocks. If you are going to keep some in a savings account think about ING or other online savings acounts since they typically offer slightly higher rates of return than a brick and mortar bank.
Wellington
BAAAALLLINNN'
Two questions:
What are you saving up for?
When are you going to use the money?
If you're saving up for a house or something and are planning to use that money soon (less than 3 years) then put it in a money market account. You can find them at anywhere between 4.8% and 5.1% APY. If you leave that money in there and never touch it, that's a pretty nice chunk of change that you earn per year just by having your money sit in an account (You do pay taxes at the end of the year though).
If you are looking to keep saving for years though, a mutual fund is the way to go. I wouldn't do it with all the money, but a nice sized chunk.
What are you saving up for?
When are you going to use the money?
If you're saving up for a house or something and are planning to use that money soon (less than 3 years) then put it in a money market account. You can find them at anywhere between 4.8% and 5.1% APY. If you leave that money in there and never touch it, that's a pretty nice chunk of change that you earn per year just by having your money sit in an account (You do pay taxes at the end of the year though).
If you are looking to keep saving for years though, a mutual fund is the way to go. I wouldn't do it with all the money, but a nice sized chunk.
Wellington
BAAAALLLINNN'
btrboyev said:
For two years I wouldn't put the money in a mutual fund. That's not enough time to recover if we hit a downturn. Think about it this way, with $35000 in a MM account, you're pocketing $1750 a year on interest if you add no more money to the account.
http://www.neogaf.com/forum/showthread.php?t=133219
I had made a topic asking some questions. Maybe that will help you out.
Cauliflower of Love
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Fragamemnon
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If you're even considering buying a house in the near future I would put the money in some kind of money market/high yield savings account and try to get around 5.3 or better APY on your money. I would avoid stocks if you might be using the money as a down payment.
And yeah, right now depending on where you live renting can be super, super win. Lots of people with RE investments they don't want to sell due to the downturn so they are trying to rent them out (and bringing down rents in apartments and what not with them).
And yeah, right now depending on where you live renting can be super, super win. Lots of people with RE investments they don't want to sell due to the downturn so they are trying to rent them out (and bringing down rents in apartments and what not with them).
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