So I've got some spare cash...what should I do with it?

[FearM9]

Here's the deal....one of my old savings account has several grand in it and earns jackshit for interest :rolleyes:. This is not an emergency account.

I want to move the $ to an investment vehicle based on the following conditions....
Stable and steady growth.
No major penalty if I have to withdraw early.
Nothing risky where I can lose the $.

CD? Money market account? Treasury bills?

Thanks

Too bad I can't get this....

http://gallery.consumerreview.com/webcrossing/images/5Spot1(1).jpg

[Andy_B]

1) Most if not all CD's have penalties for withdrawing before the maturity date

2) A money market account won't get you all that much more savings than a savings account

3) I don't know enough about t-bills but I think they may also have a maturity clause attached to them.

Maybe a very low risk bond fund might be what you are looking for?

Andy

[FearM9]

The chances of me touching the $ before the maturity date are pretty slim, I just don't want to get dinged alot if I have to cash out early.

What's a good source to learn about low risk bond funds?

Thanks

[peledre]

Here's the deal....one of my old savings account has several grand in it and earns jackshit for interest :rolleyes:. This is not an emergency account.

I want to move the $ to an investment vehicle based on the following conditions....
Stable and steady growth.
No major penalty if I have to withdraw early.
Nothing risky where I can lose the $.

CD? Money market account? Treasury bills?

Thanks
If you're looking for a guaranteed return, then go for a CD or T-Bill, if you're willing to incur a slight risk and are looking long term, in return for more liquidity, go for a SPY Index Fund.

[Andy_B]

What's a good source to learn about low risk bond funds?

morningstar is a great place to start

http://www.morningstar.com/

Use one of the investing center links on the left to help you get started. You might need to register (its free) to use all of the tools though

Andy

[Matt in the Hat]

pay your credit cards down to a nominal amount

[Andy_B]

pay your credit cards down to a nominal amount

He did not mention he had credit card debt in his original post, but yes I agree 100%, by all means remove the high % liability if you have it.

No one ever thinks of removing high % liabilities (like credit cards) as a safe vehicle for investing, but in ways, it probably has a higher rate of stable "return" than pretty much any other "investment" out there.

Andy

[stopper4]

TIPS

U.S. Treasury Inflation-Indexed Securities

0 credit risk
small interest rate-risk
extremely high liquidity
and, you can buy'em directly from the U.S. treasury, so no middle man to pay

http://www.publicdebt.treas.gov/sec/seciis.htm

[FearM9]

He did not mention he had credit card debt in his original post, but yes I agree 100%, by all means remove the high % liability if you have it.

No one ever thinks of removing high % liabilities (like credit cards) as a safe vehicle for investing, but in ways, it probably has a higher rate of stable "return" than pretty much any other "investment" out there.

Andy

Oh I've got CC debt, but I'm using my other $$$ to pay that off. The money in question is money I simply don't want to use to pay off debt.

[Glenwood Lane United]

Oh I've got CC debt, but I'm using my other $$$ to pay that off. The money in question is money I simply don't want to use to pay off debt.

May I ask why?

Chances are you are paying a higher interest rate on your CC debt than you'll receive on any type of short term investment you make.

[SgtSchultz]

I want to thank all of you for some pretty good advice even though I did not start this thread.

[FearM9]

May I ask why? Simple....I just don't want to. Like I said before, I'm paying down my CC debt with my "regular" biweekly salary and I'm doing quite well with that.

Chances are you are paying a higher interest rate on your CC debt than you'll receive on any type of short term investment you make. Totally agree, but like I said...I don't want to use this $ to pay down debt. I just want to dump it into something better than this POS savings account and forget about it.

Just comes down to a personal choice. Many people don't workout by choice. I choose not to use the several grand to pay down CC debt.

[Glenwood Lane United]

Just comes down to a personal choice. Many people don't workout by choice. I choose not to use the several grand to pay down CC debt.


Fair enough.

[Pack87Man]

Basically, you're always going to have to pay for the ability to take the money out whenever you want, either through low interest rates or through a early withdrawal penalty. That said, if you're willing to lock up your money short term, either CDs (Certificates of Deposit) or short term government notes are the best way to go (T-Bills are obviously the most famous of these, but there are lots of government securities that are not T-Bills, but are basically almost as safe. Look it up, a whole host of government agencies put out their own debt.) These are the lowest risk items, and they'll beat the hell out of the interest rate on a savings account. If you get the six month or yearly ones, you can roll them over until you need the money, or pull them out when the time is up. Easy enough.

[MtMike]

Send a check payable to Mike Driskill, 303 ....

:D

[Own Goal Hat-Trick]

ING direct? start an IRA? *shrug*

[speedcake]

By only paying down your credit card via monthly payments, how much more are you going to end up paying in the long run than if you knock that sh!t out right away?

How much CC debt do you have? I'd assume that you'd end up better off all around by just getting rid of it now. Every payment that doesn't pay the card off is money lost.

[Sachin]

TIPS

U.S. Treasury Inflation-Indexed Securities

0 credit risk
small interest rate-risk
extremely high liquidity
and, you can buy'em directly from the U.S. treasury, so no middle man to pay

http://www.publicdebt.treas.gov/sec/seciis.htm


Except that the principle adjustments for inflation (the indexed part) have to be reported to the IRS as income. So while you really aren't making money, you still have to play taxes on it.

If you hold TIPS, hold them in a tax-sheltered account.

Sachin