What to do w/ extra cash?

[Carta]

I have an extra $500 per month to save. Where do I put it without losing money?... CD, savings accnt, IRA, etc??? .........
Thanks..........Carta

ps....Like everyone else, my retirement fund is losing money.....

 

[Chemee]

Just my 2 cents

If you need access to your money quickly, I would choose a short term CD or a high yield savings account (e.g., ING). If not, consider a long term CD.

 

[Carta]

If you need access to your money quickly, I would choose a short term CD or a high yield savings account (e.g., ING). If not, consider a long term CD.

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I looked into a 6 mos. $2500 CD at 3.14%. At the end of the 6 mos. period, I would get a grand total of $39 in interest.. To me, it doesn't make sense to have $2500 tied up for 6 mos. and reap just $39.. So now it's plan B...

A savings account gives 1%, but I have access at anytime.

 

[PigsDad]

You can do better than 1% with a decent money market fund. ING (as Chemee mentioned) is currently paying 2.5% for example. A MMF is safe and you have access to your funds at anytime.

But I would ask again -- what is the goal for the $500/month? If it is saving for retirement, you really should consider longer-term investments.

Kurt

 

[FlyerBobcat]

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I looked into a 6 mos. $2500 CD at 3.14%. At the end of the 6 mos. period, I would get a grand total of $39 in interest.. To me, it doesn't make sense to have $2500 tied up for 6 mos. and reap just $39.. So now it's plan B...

A savings account gives 1%, but I have access at anytime.

And then -- if you don't use the money in six months --- you'll reap just under $13.... even worse!!!

So it's important to consider if you're going to need the money in six months...

 

[Judy]

Do you have an emergency fund for 12 - 24 months expenses? If not, put your money into an insured savings or insured short term CD account. Most money market funds are not insured. They're thought of as safe because they generally don't lose money, but in this financial environment who know? The government came out with an optional guarantee program for money market funds recently. If considering a money market fund, you might want to find out if it joined.

If your emergency fund is fully funded and you want to save for travel, housing, or education, put your money into insured longer term CDs.

If you already have your emergency fund and future known expenses fully funded, then it's time to buy stocks As the old saying goes, "Buy while the blood is running in the streets." Stocks are on sale right now. The problem is in identifying companies that are not going to go out of business. If you know which ones, please tell me :hysterical:

 

[1950bing]

[Political comments are not allowed on TUG. - DeniseM Moderator]

 

[Glynda]

Good question

I have an extra $500 per month to save. Where do I put it without losing money?... CD, savings accnt, IRA, etc??? .........
Thanks..........Carta

ps....Like everyone else, my retirement fund is losing money.....

Good question. We're getting ready to pay off the mortgage and intend to continue to put that amount aside...but WHERE. Hubby's might be retiring in three or four years.

 

[Glynda]

Mother...

Starting next Tuesday, keep it under your bed.

My mother grew up during the depression and when all this started she got scared and put cash in her safe deposit box. She thinks we ought to too.

 

[donnaval]

It is quite a dilemma. We have put off selling some investment property simply because there's nowhere to put the profits that would pay us anything remotely close to a decent return, and our properties do make money. Boo hoo, we had hoped to retire this year or next.

If you have a Fifth Third Bank in your area, and you have sufficient funds, they have a "Safe Saver" account--minimum balance is $50k, but they are currently paying 2.7% interest and you have instant constant access to your money. We had a CD mature the other day, and the best local rate we could find was 3%, so we put it in Fifth Third--didn't seem worth .3% to tie the money up for a year.

As far as retiring this year or next, with such good buys out there we might end up taking that Safe Saver money and buying more investment property....

 

[geekette]

I would keep stuffing it into retirement plan stocks (I assume you are still eligible to do so). After, as was wisely mentioned previously, fully funding the emergency cash account.

 

[geekette]

It is quite a dilemma. We have put off selling some investment property simply because there's nowhere to put the profits that would pay us anything remotely close to a decent return, and our properties do make money. Boo hoo, we had hoped to retire this year or next.

curious, is property actually selling in your area? You wouldn't have to take a loss?

 

[Autoeng]

I was always told by financial people that anything under 6% doesn't keep up inflation. GMAC Bank tends to offer the best rates on CD and Money Market accounts. Check out lots of rates at www.bankrates.com.

 

[wilma]

[Out of compliance post, and response, deleted.-DeniseM Moderator]

 

[JoAnn]

If you have a good broker or financial adviser, I suggest you talk to them. If not..get one. Ours has been a big help.
OR......send Joan down here with it and she and I can 'invest' it for you

 

[donnaval]

curious, is property actually selling in your area? You wouldn't have to take a loss?

Prices in our area never fluctuated all the wildly. And the demand for good investment property seems to be pretty strong, judging by sales.

As for taking a loss, well it would be more like taking less profit--we've owned these properties for a long time and have very low bottom-line requirements from them.

 

[Elan]

What about a municipal bond fund? They're liquid and pay around 4.5-5% that's exempt from federal taxes. Of course, they can always drop in value as well, but that's unlikely until interest rates begin ticking up.

 

[Passepartout]

I think I'd buy a CD a month, or if you have $2500-3k, 6-month certificates. Construct a 'ladder' of progressively maturing securities. IMO the investment landscape will look different (hopefully better, maybe not-so-much)in a half-to-1 year, and out beyond. I know that tying up real money for paltry returns isn't wonderful, but these are safe, out of your spendin' fingers, and not tied up so long that if you REALLY need the money, or a great opportunity comes along, you can swoop on it.

Jim Ricks

 

[Vacation Dude]

What about a municipal bond fund? They're liquid and pay around 4.5-5% that's exempt from federal taxes. Of course, they can always drop in value as well, but that's unlikely until interest rates begin ticking up.

very funny...my muni bonds are DOWN 20%.

the only safe investment it Treasury Bonds (I know know that)

CDs are at risk also

Cash is King.....just bank it and think of it as short term wealth preservation and safety rather than worry about making an extra 1-2% interest and assume a lot of risk.,

 

[Elan]

very funny...my muni bonds are DOWN 20%.

the only safe investment it Treasury Bonds (I know know that)

CDs are at risk also

Cash is King.....just bank it and think of it as short term wealth preservation and safety rather than worry about making an extra 1-2% interest and assume a lot of risk.,

I just bought a muni bond fund in early December. The fund itself is up 9% so far, exclusive of distributions. It pays a monthly distribution, of which I've received one thus far. The annual yield is 4.92%, and it's federal tax exempt, which if one were in the 28% bracket is equivalent to 6.83% pretax. I don't know if that's funny, but it makes me smile .

I would agree that cash is king, but bond funds can be redeemed in one trading day. That's liquid enough for a portion of my portfolio.

 

[Htoo0]

Have you thought about investing in another timeshare?

 

[Icarus]

"I only have one word for you young man. Are you listening? Plastics."

-David

 

[TerriJ]

What a great problem to have. As mentioned above, you need to decide what your goals and timeline are for the money, then use some of the great suggestions given.

 

[Carta]

"I only have one word for you young man. Are you listening? Plastics."

-David

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Tell me more........

"young man"..... I like that

 

[tashamen]

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Tell me more........

"young man"..... I like that

I guess you're too young to remember the movie The Graduate...