What should I do with my $55,000 in my savings account?

Question

I own my home and I have 2 cars that are all paid for.

I'm not full of poop. Why can't a girl have 55,000 in a savings account? Hard to believe?

Answer 1

Good for you! You go girl!

If you have no dependents, set aside 6 months worth of expenses (not gross pay, not even net) to cover job loss or other emergencies. With what's left, put $4000 (max for 2006) into a Roth IRA - earnings grow tax-free AND penalty-free, so if you need to take the PRINCIPLE out, there are no fees (other than what the investment manager might charge). Take what's left and divide by 5 (say it's $25,000, so dividing by 5 you get $5000). Put $5000 each into a 1-year, 2-year, 3-year, 4-year, and 5-year CD. As each one matures, roll it (principle and interest) back into another 5-year CD. This will allow you to have access to the money once every year, while earning the higher (than a savings account) returns of a 5-year CD.

Or you could (and SHOULD) talk to an investment adviser. Just make sure they're paid on either an hourly scale or a flat rate, not commission - you don't want their salary dependent on YOUR money!

Answer 2

The best way for you to invest depends on a lot of things.

First, if you don't have an emergency fund worth 3-6 months of expenses, establish one first, maybe in a money market fund so you can get at it in an emergency. It won't pay back much, but it's better than having to borrow money in an emergency and getting into debt over your head.

Next, if you haven't done the 401(k) thing and the IRA (Roth or tranditional) thing, do it. Tax-free or taxed deferred savings are good.

Finally, if you've already done all those things and still have $55,000 left to invest, there's still more stuff to think about. Long term, stocks will grow faster than anything else, but can be very risky short term. They're a terrific investment if you're young and have a long time line. If you're older, you have to think more about safer investments, because you don't have as much time to recover from a downturn in the market.

Anyway, there is no "best" way to invest a sum of money. What's best depends on a lot of different circumstances. If you really want a good investment, go buy a book on investing so you can decide what makes sense for you. Sure, you could give your money to a financial advisor but how do you know he's not just in it for the fees and commissions he charges you? How do you know his advice is any good? You need at least a foundation so you can make an informed decision. Personally, I like "The Only Investing Guide You'll Ever Need" by Andrew Tobias. It'll give you the basics. Good luck.

Answer 3

Take three month's salary, and put it in a high interest savings account. Never touch that - that's an emergency fund in case you lose your job and need cash to pay bills, or if you something bad happens and need cash until insurance money comes in.

Take the rest, and open a brokerage account, so you can invest it. If you like the stock market, open an online brokerage account at a place like fidelity and do your own research and pick which stocks you want to buy. If you don't like the stock market, open an account with a money manager (like ameriprise) and tell them to manage it for you. You shouldn't put it into real estate - putting all your eggs in one basket can be risky if something bad happens (i.e. tennant stops paying rent - you need a lawyer to evict him but you don't have your savings anymore, and the property tax bill is due).

Answer 4

Keep enough in savings to cover 3 to 6 months' expenses, then invest the rest. Mutual funds or stocks, including some international exposure.

Answer 5

Wow that sucks. My husband is a librarian and it appear as if the cushiest activity i've got each seen for the pay ratio he gets. in any case, you will be able to additionally opt to purpose getting an endorsement as an academic librarian and prepare at universities. additionally, you are able to attempt doing user-friendly training libraries. some require which you have taught for like 2 years, yet some inner maximum faculties do not require this. additionally, some faculties, by way of funds cuts, have jobs the place you're like a library assistant and that they don't pay you as lots, yet you get the assumption. in any different case, sure, in case you hate your activity, I recommend getting out of it. individually, i think of what's rather occurring right that's you went from being a librarian like my husband to get greater household projects that have confidence me, remains much less complicated than maximum different jobs. i'm getting beat up at my activity, think of approximately that. merely asserting.

Answer 6

I would contact a very good honest financial adviser. My son does that for a living. He has taken my very small retirement account and done some investing with it and it has gained money. He will soon be getting a divorce settlement amount and doing the same thing. If you email me, I will give you his name and phone number and you can contact him and get his advice. Even though he is my son, he is honest, wise and very knowledgeable. Sounds like you are a very intelligent person. Not many of use will get to the financial position you are. Congratulations!

Answer 7

I suggest you to open a TD Ameritrade account and invest in the Stock Market with the help of a Financial Advisor.

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Answer 8

Saving account. Save it for a rainy day. If you don't intend to spend it, purchase some CD or Treasury bonds, you,ll double that money in 10 years. Stocks are too risky.

Answer 9

Well-respected mutual funds, in a diverse portfolio. Plus, keep $5,000.00 in a savings account that you can easily access, in case of emergency.

Answer 10

I would buy a home, putting as much down as you can, just saving enough for emergencies.