I have no debt anymore because I saved and paid it all off. Well, now I have about $4,000 and I don't know whether to put it in a savings account or where to put it because I don't know anything about savings, mutual funds, or anything else involving investing any suggestions?
2007-02-16 05:17:17 · 19 answers · asked by LKJ 2 in Business & Finance ➔ Personal Finance
Take the 4000, first save 1 month to 4 months iof expenses for Emergencies
then open a free brokerage account
buy 1 REIT MUTUAL Fund
Buy 1 hi quality high yield fund
buy 1 of each stock Energy, Health, Bank
WRE, DUK, BAC 1 or 2 Vanguard Mutual Funds
2007-02-16 05:21:32 · answer #1 · answered by god knows and sees else Yahoo 6 · 1⤊ 1⤋
If you have no other savings or investments, then you should put this money in a savings account or money market fund that earnes 4-5%. Vanguard has a great money market account that consistently pays one of the highest interest rates. The minimum is $3000 to open it. You can let the money grow each month while you add to it, and it will be there when you have an emergency, need a new car, have to move, etc.
An even better idea would be to put the $4000 in a Roth IRA if you earned any income in 2006 or 2007 (you can make a 2006 contribution until April 17). You'll never have to pay taxes on it or the earnings. And if you really want to, you can take the $4000 out to buy your first home or pay for higher education, among other things.
You can put it in the money market fund at Vanguard and easily transfer some or all of it to a Vanguard IRA when and if you decide to.
2007-02-16 14:19:46 · answer #2 · answered by lizzgeorge 4 · 0⤊ 0⤋
If you want to invest in mutual funds, you don't need to actually know anything about them.
You can choose a destination fund. They are available through Fidelity and countless other brokerage houses.
If you want to save for retirement, open an IRA or similar account and buy into a mutual fund that has your desired retirement year in mind. If you want to retire in say, 40 years there is a fund for that called "The 2025 fund" "The 2030 fund" "The 2040 fund" etc. etc...
This fund will start aggressively investing and reduce risk through more secure investments as time rolls on thus reducing the risk of principal loss as you get closer to retirement.
You may also just want to invest or save towards a house. In this case you can invest in similar mutual funds, but do not open a retirement account, just open a regular brokerage account.
If you are single you should think ahead about a family. A future spouse can have a big affect on finances with good or bad habits and results.
There is a 40-year investment calculator at the link below. Plug in your age, investment ROI, and see what it says. You can download it free.
Good luck!
2007-02-16 14:47:44 · answer #3 · answered by Ethan 3 · 0⤊ 0⤋
There are a ton of things you could do with that money investment wise but a savings account will probably be the most wasteful as they do not pay as good a dividend as mutual funds, GICs and stocks.
If you have a special talent or skill, you may even invest in opening up your own business.
The best people to ask would be your bank. They'll sit down with you for a 1/2 hour or so and walk you through the different types of investments.
2007-02-16 13:24:05 · answer #4 · answered by DaveJoseph 3 · 0⤊ 0⤋
Go to the bank and buy a CD. Then put the majority of the money in a savings account, and spend a little bit (around $500 maybe) on something you have wanted or need but were not able to previously afford because of the debt. Its better to spend a little bit now as a reward than to break into your savings later. It helps me resist the temptation.
2007-02-16 13:26:47 · answer #5 · answered by liebedich85 4 · 0⤊ 1⤋
I just went through what you are currently going through. Find a local credit union and put your 4k in a Cash investment account. They may call it a money market account. These type of account currently offer the highest yield rate. When you get around 10k buy a house that will be your best investment ever. Do be like everyone else and blow it. Put that money to work you and enjoy turning 4k into 14k.
2007-02-16 13:24:27 · answer #6 · answered by James b 2 · 0⤊ 1⤋
I need a loan for at least 1000 for emergency funds for a sibling of mine, i will pay u back, even with interest, but, can you get it to me by tonight through western union it would be great! you can im me, or email me at babygyrl_sherry@yahoo.com. Thank you! But otherwise, you can put the money into a savings account until u really need it.
2007-02-16 15:18:13 · answer #7 · answered by Anonymous · 0⤊ 1⤋
Go to www.daveramsey.com He is very smart when it comes to financial stuff. He has some really good books out. He also has a talk radio show on the a.m. stations. I am really avid about this guy.
By the way I don't think a CD is the best thing to go with. All that is a Certificate of Deposit. You Don't earn that much interest with it. JUST ASK DAVE RAMSEY.
2007-02-16 14:41:52 · answer #8 · answered by chris 3 · 0⤊ 1⤋
I like to play it safe so i keep my money in a CD account rather than investing.
Go to the bank that offers you the best deal and lock it at a good interest rate, mine is 5% for 13 months... I didn't want to keep it for 5 or 10 years just in case i will need it sooner!
2007-02-16 13:21:32 · answer #9 · answered by Anonymous · 0⤊ 1⤋
I think you should put the money in a CD because it will make lots of money for you. I just found a good one, which I will give to you. Go to New Millennium Bank and deposit your money in a CD. You will get 5.35% which is very good and it's only for 3 months. 3 months means you can take it out in 3 months or you can leave it for another 3 months. You can also go to Peapack-Gladstone Bank and get 5.10%. This is for one year. You must put at least $500.00.
2007-02-16 13:32:03 · answer #10 · answered by shirlandjerry@yahoo.com 2 · 0⤊ 1⤋