Ok, I'm a server and only plan on being there another 2 years til I graduate and I dont feel like starting any retirement fund or whatever. I'd go stock market if it wasnt so risky, and I know an IRA fund grows slowly(well, slower than I'd prefer). I'm not talkin long term investing, but rather than blow 4 grand+ on a blower, wouldnt that money be better spent/invested somewhere? I dont want my money just sitting in my bank account if it can atleast do something for me. So what are my options? I'd prefer something where every week/month I put in a few hundred bucks or whatever and then after 5-10 years, once I need to start a family, I'd be able to take it out and it double or triple or whatever. ANYTHING besides my pos 1% apr for staying in my savings account. $2 per quarter = sucks

 

BINGO. This is exactly what I'm going to be looking to do at the end of this summer after I spend a few thousand on the car.

I'm greatly interested here too. I too want to start saving it in some kind of high interest rate account for my future (house, family, engagement ring)

 

BINGOO!!!!!

 

Dude, I said Bingo... You need to say like... Totally or something, lol

 

try out some short term bonds (government since you know they wont default and they dont have a liquidity problem)....im sure you could lock in about a 2.4-2.8% rate for like 6months...im not sure if there is a shorter term...you may also want to check out mutual funds too, but i think they may require a minimum 1,000 dollar investment


by the way, if you are doing 5-10 year, you may be able to lock in a 4%-6% rate...good luck dude

 

other then CDs, and the Stock market ever thought about rental properties? If you pick a good location, and get the right people moved in, you'll hardly have to pay anything, and later is your sayin in 5-10 years or so, the price on the property should atleast double, in Florida... properties are always goin up, minus the cost of Hurricains and other random happenings, i got a couple hundred bucks in the stock market, if you did decide to go that route, just remember that the longer you keep your money in the market the more likely you'll end up with a positive yeild...

 

You can pick your level of risk in most IRAs. I have a fidelity IRA and I chose the highest risk. The average growth was like 8% I believe. That may not be a bad way to go. Also a regular IRA is tax deductable. You have until April 17th to sign up for an IRA for last year and you can deduct it from your taxes last year (assuming you havent filed yet).

But if you dont want the IRA, for short terms (2 years or so) a CD is a safe way to go with descent returns (~5-6% or so).

Either that or the stock market.

 

2 things, not that I know much nor do I have any investment in it, but the word I keep hearing is the real estate market is beginning to slow down, not quite what is has been the past 15 years or so. Also, you're talking big time investing then and not all of us have that kind of cash. As far as investing, the easiest thing you can possibly do is look into a savings account with ING, Emigrant Direct, Capital One, etc. I don't know all the details of the others but I personally use ING and I couldn't be happier. It's all online and the only downside is every time you make a transfer to or from the account it does take a few business days. You just link it to your existing checking account to make transfers and it takes a week or two for the money to be available in the ING savings account but the whole idea is not to touch it anyway. Emigrant Direct may have a higher rate right now but the ING account is at 4.75% until mid April and is sitting at 3.8 after that, but the rate continues to go up also, it was at like 3.4 when I opened my account. That's a hell of a lot better than current bank savings rates and better than most CD rates, I know because I work for a major bank in the Northeast. And at least with ING there are absolutely no minimum balances or any charges, and if you deposit an initial $500 you get a free $25, so if anyone is interested just pm me your e-mail address and I'll send you the info from ING.


And yes I know it sounds like I'm selling these accounts, only reason is I wish somebody had filled me in on this info ealier and I work in finance so I know these accounts are the easiest ways to start saving some cash.


One more thing, make sure whatever you do that they are FDIC insured. Obviously stocks, mutual funds, real estate, etc., there is no guarantee that you're not going to lose all of your money.

 

I agree with the high interest savings account. Right now, check www.bankrate.com and see which account suits you the best. I have mine with Capital One, and my rate is right at 4.15, I started it at the beginning of January at 4.0 and its already gone up, so the rate is always going up. Ive made more in interest in the three or 4 months Ive had it than I EVER made at Wachovia or Bank of America in the 8 years Ive been "saving." The best money is free money, so never give up the opportunity to get it. Also, look into a Roth IRA, check with your bank locally, as they have investment "gurus" and will talk to you about what is best for you. While it doesnt grow like you may want, it grows, and that is what you want in a retirement account. Retirement doesnt happen overnight, so start now, and have it there all along.

 

If you're looking for a high yield, immediate growth account, gov't bonds aren't the way to go for that. Unfortunately short term investments are penalized a lot, unless you do a high interest savings, which would not be a bad idea in your case. My wife and I have a money market account and interest bearing checking which both just about equal inflation. You can always keep an eye on mutual funds. International funds, especially ones heavily positioned in Japan are doing very well these days. I think the International fund in my IRA has made 19% for the last 12 months. Also small and mid cap funds are doing pretty well. Again, the one in my IRA has made ~12% for the last 12 months or so. American Funds is a good group to look into, they have quite a number of fund with high Morningstar ratings. If you have any questions, feel free to IM me. I think my AIM is in my member profile.


And on a side note, for all you guys in the Military and Federal employees, how many of you are using the Thrift Savings Plan?

 

Thw worst thing you can do is nothing at all.

From you original post, I can tell that you are frustrated and also have some misconceptions about investing. For example, IRA's so NOT grow slow. In fact, an IRA can be any kind of investment you want....including stock. An IRA is simply an investment that is earmarked with certain restrictions deemed by the IRS. As an idividual, you can put $2000 per year into an IRA and take a tax break on it. Married couples can invest $4,000 per year. Folks like me can't use IRA's because I make more then what the govenement allows to use one. As I said, it is simply an investment with restrictions, but your money is tax deductable and the interest grows tax fee.

In fact, you can slam $2000 before April 15th into an IRA and call it a 2005 contribution if you want. This would give you back about $400 on your taxes if you have not already filed assuming you are in a 20% tax bracket.

I have quite a bit of experinec in this area...my advice to you is the following:

1 - What are your investment goals? What are your saving for?

2 - How liquid do you want the money to remain invested?

3 - How much risk are you willing to take?

For example, if you want the funds to remain liquid and may have an immediate need, then invest it in a money market account.

On the other hand, if you are willing to take risk and are saving for the long-term future then stick half in an IRA and the other half in a Roth IRA. Invest the money in a growth oriented mutual fund that is invested in growth stock with some overseas investments. Most likely you will make 20 30% on it over the next few years.

But, let's say you want the money in 5 years for a house downpayment. Then, invest it in a equity/growth mutual fund.

I would stay away from property UNLESS it is being used for your primary residence.

BTW, I am not a personnel investment advisor, but I am working on my MBA with a strength in Finance. I also manage all the assests in a non-profit corporation and sit on the financial board for another. I am not the best person to give advice, but I generally know what I am doing.

 

I definitely agree with the statement about real estate. If you are not going to use it as a primary residence, then don't look at it as an investment until you own a primary residence. There's money to be made in real estate, but at the same time you can get burned badly on it in a heartbeat.

 

:stupid:

Look, I know guys who made it big, but it is a big risk.

Rob West is a succesful home builder and personal friend of mine in PA. About 15 years ago, he got fired from his job, not a pot to **** in, and a baby on the way. So, got a loan from a bank (they did not know he was canned) and bought an investment property. That lead to another and to another etc....

Now he builds million dollar homes and lives in one himself. He took a big gamble because he had nothing to loose. Neither he nor his wife has worked a real job since he got canned.

BTW, I own an investment property, but I had other things in order first.

 

Great advice Blake.

 

Ditto with the investment property. I have one but got it AFTER the primary residence. You also need a lot of money up front if you want it to be really worthwhile.

For something smaller scale (around $4k-5k), definitely go with INGdirect.com or hsbcdirect.com. They'll give you much better interest rates, no risk (up to 100k), and flexibility in the amount.

Good luck!

 

check out www.ing.com They have great rates right now. I have a friend that just moved here and he puts most of his money there and is gaining 6 or 7%. Not bad really. check it out. That's what i'm doing.

 

Its actually $4K per person that is the max you can contribute each year. I save roughly $1200 this year on the IRA. Not only do you save some $$ on your tax return but you also get the gains from teh IRA. You are young so I would advise you to go as extreme as they will allow. If you where about to retire you may want to do something safer but you can gain alot and if you lose the $4K you wont be screwed for life.

The only restrictions are on Roth IRAs, if you are over 100K you cannot invest in a Roth, but you can with a traditional IRA. I know because I did and could not in a Roth.

 

You are correct, it is $4,000 per person, unless you are covered by a qualifying plan. In my case, I have a 401k and a pension, so I am not eligible for a IRA, but my wife is. If you make more then 100K, then you can't make a Roth IRA contribution.

This stuff is really confusing. The best thing is to check with a tax consultant. I use a an accountant who is a CPA.

 

I just go see a financial advisor about every 6 months. It's free with my bank and they've never steered me wrong yet.