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Message
Where to safely put away money with hopes of small growth
Posted on 12/30/14 at 8:58 pm
Posted on 12/30/14 at 8:58 pm
Mid twenties, husband, one kid.
I feel like every financial advisor I speak to is just a salesperson who wants to encourage me to do with my money what would ultimately be best for them, not me. I'm extremely conservative with money and don't like the idea of gambling.
Rather than just putting my money in a regular savings account, I wonder if there's an account I can use that might earn more than tiny interest rate but where we have little to no chance of losing it. Also want to access it at any time for withdrawal without a penalty. Approximately 75k.
Admittedly, I'm not investment savvy. But I am frugal.
I feel like every financial advisor I speak to is just a salesperson who wants to encourage me to do with my money what would ultimately be best for them, not me. I'm extremely conservative with money and don't like the idea of gambling.
Rather than just putting my money in a regular savings account, I wonder if there's an account I can use that might earn more than tiny interest rate but where we have little to no chance of losing it. Also want to access it at any time for withdrawal without a penalty. Approximately 75k.
Admittedly, I'm not investment savvy. But I am frugal.
7
Posted on 12/30/14 at 9:30 pm to tigerbandpiccolo
I don't think you have many good options. A high yield savings account? Right now some online banks are offering 1%.
Do you have some sort of retirement set up yet?
Do you have some sort of retirement set up yet?
Posted on 12/30/14 at 9:38 pm to dlmast87
Yes. I work for an employee owned company that does profit sharing and am already at close to six figures in that account in just three years. I also contribute to a 401k although the company match sucks due to the fact that they give us so much on the profit sharing. My husband contributes to a few IRAs.
I guess I'm willing to gamble slightly-but just ever so much-just to not lose to inflation with money sitting in bank.
This is sort of a rainy day fund that may likely grow to be down payment (ideally I want it more than halfway paid off) if we choose to build/buy a bigger home down the road.
I guess I'm willing to gamble slightly-but just ever so much-just to not lose to inflation with money sitting in bank.
This is sort of a rainy day fund that may likely grow to be down payment (ideally I want it more than halfway paid off) if we choose to build/buy a bigger home down the road.
This post was edited on 12/30/14 at 9:39 pm
Posted on 12/30/14 at 9:39 pm to tigerbandpiccolo
What is your purpose for the money? If it is retirement, you need to open up and look at some mutual funds or something. If it is just emergency fund cash, you are fine in a money market account.
Never mind, you answered when I posted. I would leave it alone if peace of mind is what you are after.
Never mind, you answered when I posted. I would leave it alone if peace of mind is what you are after.
This post was edited on 12/30/14 at 9:41 pm
Posted on 12/30/14 at 9:56 pm to tigerbandpiccolo
If you are willing to take on some risk, open and start maxing a Roth IRA. The contributions (5500 per year) can be with drawn without penalty. Vanguard or Fidelity are good discount brokerages to open one up with. Might not be what you're looking for but like I said, your options are limited for what you're asking for.
Posted on 12/30/14 at 10:43 pm to tigerbandpiccolo
What will the money be used for and when do you expect to use it?
Posted on 12/31/14 at 12:47 am to tigerbandpiccolo
Put some in a high interest checking account (3.5% or so on the first $10,000 or so if you make 15 debit card transactions per month). I have 2 such accounts.
Put some in a GE Capitol (online) Bank CD at 2.25% interest if you get the 5 year CD.
Put some in a GE Capitol (online) Bank CD at 2.25% interest if you get the 5 year CD.
Posted on 12/31/14 at 6:32 am to TigerTatorTots
The goal is to get this fund to about 200-250k. At that point we would likely set aside 30-40k for private school tuition account to ensure we are covered there for several years just incase anything should ever happen to our current income.
The other part would be for an eventual new house. Love our current home and it's relatively new. However, one more kid and we need more space. I want to max out our ability to stay here as long as possible, but it's inevitable. Will likely build but I want a huge down payment so that note is as low as current one.
We have one vehicle note-close to paid off. Mine is a company car so we benefit on that. Ideally if we could pay off the car faster I thought maybe we could put that note (plus extra) into said fund each month to help it grow.
The other part would be for an eventual new house. Love our current home and it's relatively new. However, one more kid and we need more space. I want to max out our ability to stay here as long as possible, but it's inevitable. Will likely build but I want a huge down payment so that note is as low as current one.
We have one vehicle note-close to paid off. Mine is a company car so we benefit on that. Ideally if we could pay off the car faster I thought maybe we could put that note (plus extra) into said fund each month to help it grow.
Posted on 12/31/14 at 6:55 am to tigerbandpiccolo
Life is risk.
By not investing in stocks (at least a portion of your savings), you risk losing purchasing power over time (inflation).
In general, dollar cost averaging into a low cost index fund is a straightforward way to invest some of your assets.
By not investing in stocks (at least a portion of your savings), you risk losing purchasing power over time (inflation).
In general, dollar cost averaging into a low cost index fund is a straightforward way to invest some of your assets.
Posted on 12/31/14 at 8:17 am to tigerbandpiccolo
No risk is gonna be a savings account
There are some low risk mutual funds out there that I'd go with....think bond funds
There are some low risk mutual funds out there that I'd go with....think bond funds
Posted on 12/31/14 at 8:25 am to tigerbandpiccolo
75k into 200k with very little to no chance of risk is quit ambitious. 1-3 percent interest will not get you very far.
Posted on 12/31/14 at 8:27 am to tigerbandpiccolo
quote:
I feel like every financial advisor I speak to is just a salesperson who wants to encourage me to do with my money what would ultimately be best for them, not me.
You're way ahead of most people with this right here.
quote:
I'm extremely conservative with money and don't like the idea of gambling.
No matter where you put your money, there is always some element of risk (but at 75k you'd be covered by FDIC with a savings account or CD).
What you are looking for would be a high yield CD which unfortunately doesn't exist right now.
I see in a later posts you contribute to 401k's and IRA's, so retirement wise you seem to be on the right track. Are your contributions to those maxed out? Are you taking full advantage of the company match?
If you are comfortable with your level of investing (mutual funds, IRA's etc that are in the market) paying off a car note wouldn't be a horrible idea. Barring that, I'd look for the highest possible CD yield you could find.
Posted on 12/31/14 at 8:47 am to tigerbandpiccolo
After rereading one of your responses i have a question regarding profit sharing. Is that money in company stock, mutual fund, or IRA? If in company stock that you cant sell as long as you work for the company (this is how mine is set up) my advice would change significantly.
Posted on 12/31/14 at 9:59 am to tigerbandpiccolo
You will never be able to get $75k to $200k without entering the stock market. If you go the no risk route of a MM or Savings account, your 75K will LOSE purchasing power as inflation will likely pass it up.
First and foremost, talk to a financial advisor prior to taking any of our advice. If it were me, I would put my money in an etf that tracks the market as a whole. If you look at a long term view (greater than 5-7 years), the stock market has always gone up. Even if you invested at the very peak before the 2008 collapse, today you would still be up more than any money market or savings account- by a large difference.
First and foremost, talk to a financial advisor prior to taking any of our advice. If it were me, I would put my money in an etf that tracks the market as a whole. If you look at a long term view (greater than 5-7 years), the stock market has always gone up. Even if you invested at the very peak before the 2008 collapse, today you would still be up more than any money market or savings account- by a large difference.
Posted on 12/31/14 at 3:12 pm to LSU0358
1) I don't expect my money to grow from 75k to 200k in a savings account. I said I'm not financially savvy, but not outright retarded. That will happen with monthly contributions on our end, but I would enjoy a little help from the market.
2) regarding question on profit sharing: it's privately owned company, therefore no stocks. It's held in company mutual funds. We contribute none of our income to this-it is a trust fund, gift set up by owners of our company. They dump 10% of our yearly income into an account and then give us whatever percentage the company grew that year. Company grows at average of 18-20%/yr. people stay here a long time because this type of employee treatment is almost unheard of today. Many of my 25 year employed counterparts are going to retire with $4-5 million of which they've technically not had to contribute a thing to. Like I mentioned earlier, I'll soon hit 100k in that account after three years. Our financial guy at work says 100k is the magic number where the account really begins to explode, said it basically begins to double year after year at that point.
2) regarding question on profit sharing: it's privately owned company, therefore no stocks. It's held in company mutual funds. We contribute none of our income to this-it is a trust fund, gift set up by owners of our company. They dump 10% of our yearly income into an account and then give us whatever percentage the company grew that year. Company grows at average of 18-20%/yr. people stay here a long time because this type of employee treatment is almost unheard of today. Many of my 25 year employed counterparts are going to retire with $4-5 million of which they've technically not had to contribute a thing to. Like I mentioned earlier, I'll soon hit 100k in that account after three years. Our financial guy at work says 100k is the magic number where the account really begins to explode, said it basically begins to double year after year at that point.
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