Welcome to the third capital link mlp investing forum 2017 in the Investment Series. Roth IRAs, Canadian RRSPs and such, stocks are still the best balance of large long-term gains versus risk.
You’ll see some alarming swings if you check the stock prices every day, but if you just open up your statement on the day you turn 59. 5 to start your withdrawals, you will probably be pleasantly surprised. What about money you need for more immediate needs? Say you are saving for a house downpayment that will take two years to accrue. Or you received a gift from your grandma to pay for your college education, but you won’t even be graduating from high school for three years. I just copied the following rates for today from bankrate.
And, of course, the best guaranteed no-volatility place to invest your money may be paying off existing debt. Your mortgage, your student loan, or if you still have superbad loans like car or credit card debt, you need to get on those, emergency style, before you consider saving for anything else. Because which one makes more sense: saving for an upcoming purchase in a 1. In bad markets, it is safer than VFINX.
In good markets, it underperforms the pure stocks. For someone like me who wants a growing-but-semi-stable pool of money to use up over the next 5-10 years, a mixed fund can be a good choice. 5 years of living expenses in a mixed fund like this, and automatically make monthly transfers to the checking account to fund regular living. In the event of a stock market crash in the long-term investments, the VBINX takes a much smaller hit and thus principal is preserved. Hint: If you want to do a little fund shopping of your own, you can play with the same web site I used to generate the graph above.
In all cases, do your own math on short-term savings and figure out how much you expect to earn from the investment. 5000 used car in three months, there is not much benefit in worrying about investment returns. Also remember that the more you cut your spending in general, the faster your savings accrue, meaning you don’t have to think about saving as much. Some dual-income families need to plan months ahead even for a new washing machine, while their Mustachian counterparts could buy an entire car with less than a month’s notice, and the only effect would be that they would pour less into their long-term investment accounts that month. An Interview with Matt Cutts: Can the Government grow a Money Mustache? US savings bonds didn’t make the cut?
I-Bonds pay a variable rate, and can be cashed in within a year. 25 minimum, tax-deferral, and no state income tax on the interest. Money Mustache loses some points here. I did look into US treasuries from treasurydirect. I know many investors use them. But I found the website confusing and non-intuitive so I was hesitant to recommend it. With so many choices, and so much apathy towards investing, I want to focus on easy things whenever possible.
Pain in the ass you mean. I buy from that site and I hate it. I just want to check my balance already. When you first buy them, you are locked in for 1 year, and you can hold them up to 30 years. You get paid your interest when you redeem them, less 3 months of interest if you redeem before 5 years. No one would ever sell it to you privately.