I'm a 35yo single male, I own my own home and I have about $12000 in a money market paying 4.65 apy. Also i have two CD's each for $2000 5.35% apy for nine months. My mortage is 6.74% apr ( I owe $63k, purchased house at $86k two years ago). I also have about $16k in a retirement mutual fund which I have calculated has paid a disappointing 5 % over the last 7 yrs. My question is this. These investments (cd's and money markets) are super safe because of FDIC. And I like a sure thing even though I've heard often that when your younger u should have more risk in your portfolio than when u r older. Are there investments that would pay slighty more and be slightly more risky but not too risky. Perhaps municipal bonds? I also like the liquidity of CD's and money market accounts so I wouldn't want to give up all that much liquidity.
2006-09-22 06:38:18 · 6 answers · asked by buckbucknumber2000 1 in Business & Finance ➔ Personal Finance
Invest in your debt and pay down your mortgage. Your equity will soar, tax-free if you sell the house for under $500K.
2006-09-22 06:46:02 · answer #1 · answered by nido_tr3s 5 · 0⤊ 0⤋
Wow, talk about conservative.
Do you have short term plans to spend that money market fund or CD money? If not, there's a place to move up a bit toward higher return investments, such as indexed mutual funds. The price for liquidity is return on investment. Remember to keep some of that money in that MM fund as an emergency fund. Two or three month's salary's worth is considered OK.
$16k in a retirement fund at 35? There's another place you could be doing a bit more saving, unless you have a 401k you're not talking about. BTW, 5% is nothing to sniff at when bank MM accts had only been yielding 2.5% before taxes.
Another type of sorta-safe investing are the life cycle mutual funds, where the money is invested in growth stocks early on and automatically shifted to safer investments the closer to maturity they come.
I'm guessing your mortgage is a fixed rate 15 or 30 yr. Stay with it and continue to pay the monthly payment only. Since you desire liquidity, it makes no sense to pay down the principal early.
2006-09-22 07:19:46 · answer #2 · answered by CMass Stan 6 · 0⤊ 0⤋
Your best investment was to purchase that house. Meaning, Real Estate is the best investment. Real Estate here in CT gets about a 14 % return on the investment. AND at the end, you can take your one time personal capital gain investment deduction (one per person) because it will be waived by the government.
2006-09-22 07:53:14 · answer #3 · answered by Steve C 2 · 0⤊ 0⤋
There is something just recently introduced by SunAmerica called a "guaranteed Mutual fund". It is backed by an insurance company and is guaranteed not to lose money. It also retains the highest value that it ever had for you. That last statement may seem a little confusing. Just let me know if you want to know more about this.
2006-09-22 06:49:28 · answer #4 · answered by Shannon G 2 · 0⤊ 0⤋
the cd is better because you receive more return for your money but,it is time that allows your money to grow
2006-09-22 06:42:44 · answer #5 · answered by LATANYA S 1 · 0⤊ 0⤋
metals? gold and silver is doing well
2006-09-22 06:45:38 · answer #6 · answered by military and veteran advocate 6 · 0⤊ 0⤋