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Message
How to invest $25K safely for 6 months but still get good return?
Posted on 7/7/14 at 6:45 pm
Posted on 7/7/14 at 6:45 pm
I am borrowing about $50K from my 401(K) to pay for my MBA. The first semester fees is about $25K. But since I can only have one open loan at any time, I need to borrow as much as I can under one loan. The interest rate for the loan is 4.25%.
My question is - how do I invest the extra $25K that I need for my tuition in January (but am getting now) safely for the next 6 months but still earn a good return? Any suggestions other than CDs?
My question is - how do I invest the extra $25K that I need for my tuition in January (but am getting now) safely for the next 6 months but still earn a good return? Any suggestions other than CDs?
Posted on 7/7/14 at 6:49 pm to euphemus
Short term bonds maybe?
Posted on 7/7/14 at 6:51 pm to euphemus
Put it in a promotional high interest checking account if you can still find one, nothing safe, short term and has good return
Posted on 7/7/14 at 7:01 pm to euphemus
Likely too risky, but Utilities ETF
Posted on 7/7/14 at 7:09 pm to euphemus
You will need that money to be liquid, short term and without any risk. Put it in your checking/saving and collect your .05%
Posted on 7/7/14 at 7:24 pm to euphemus
quote:
invest $25K safely
quote:
6 months
quote:
get good return
Wouldn't we all like to know.
Posted on 7/7/14 at 7:54 pm to euphemus
Can't be done. Bank CDs pay 1% or so. Anything more is going to have some risk of principal loss.
There's no free lunch or reward without risk.
There's no free lunch or reward without risk.
Posted on 7/7/14 at 8:02 pm to euphemus
Vanguard Wellesley Fund
40/60 stock/bond mix. Nice quarterly dividend.
40/60 stock/bond mix. Nice quarterly dividend.
Posted on 7/7/14 at 8:12 pm to euphemus
Anything other than a savings/checking account will be either too high risk, or too much trouble to bother with for the minuscule bump in return.
Posted on 7/7/14 at 8:22 pm to euphemus
open a high-yield savings account or no penalty cd with ally bank.
You will get ~0.85%
You will get ~0.85%
Posted on 7/8/14 at 12:52 pm to euphemus
Plenty of solid bond options that will give you a 5% return tax free.
Posted on 7/9/14 at 6:13 am to euphemus
quote:
safely for the next 6 months but still earn a good return?
As others have noted, you can't really. The problem is that rates generally are so low right now that in order to get that kind of rate you'll have to take some risks, usually in the form of a bond that could go up or down.
quote:
borrowing about $50K from my 401(K)
Why from your 401? That usually isn't a great idea for several reasons, one being that you are borrowing pretax money and repaying post-tax.
Posted on 7/9/14 at 7:16 am to euphemus
Kasasa (sp) checking account. 2% on up to 20k with one direct deposit and ten transactions per month. Anything over 20k gets 1% if I'm not mistaken. I've got it through a local bank, but I believe other banks offer the program. When I first started it was 4%! Then down to 3% and now at 2.
Posted on 7/11/14 at 2:49 pm to euphemus
the only thing I can think of for your situation is to buy high quality munis that are callable, and are in the call period but haven't been called yet. they trade at par but can have coupons of 3 or 4% and even 5% and trade in small amounts....the risk is that they can get called at any point 90 days out but since they trade at par you wont lose principal but could lost out on transaction costs...our bond desk buys these all the time however, they are hard to find but they do trade, but you have to look for them....
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