I feel like my money is stagnating, but I don’t want to gamble it in the stock market. So are there any options to get better than the <1.5% of a money market account, while still getting a guarantee on return? CDs seem pretty crappy as well, and MIGHT get you 2%, if you get a multiyear. Just curious about other options for investing that aren’t Mutual Funds and such (i.e. not long term, but closer to a year or two).
Look into a tax-free bond fund.
Not that I’ve found. Investing sucks right now. Unless you want to speculate on commodities, or individual stocks, or buy and hold long term and wait for things to go back up, or make investments that require risk (real estate, small business, etc.)
Pretty much interest rates suck everywhere.
I feel you Robert. I’ve got a big itch to invest.
Bonds don’t make much sense right now, because they’re paying fuck all and when interest rates finally rise you will take a capital loss, and on top of that there is significant default risk (even in municipal bonds). Sometimes you just have to comfort yourself that earning nothing on cash is better than losing money in the market.
Shadarr took half my post, but why are you worried about this money? Do you need it in a year or two and are trying to hedge against whatever inflation we get during that time?
If it really is for long-term purposes like retirement but you can’t bear to watch it lose money, then you’ll need to work on getting over that rather than finding a safe investment. But it sounds like you have something else in mind.
We have a lot of cash too since we decided not to build a home quite yet. Nothing is cheap right now (except when you want to borrow!) so I’m thinking about a small investment home instead.
Yeah, I’m looking to make it grow to supplement income, not for retirement. I have a retirement fund. But it would be nice to be able to invest in a CD and then use the interest on something (like home improvement). If I were thinking more long term, I would throw it at the principle on my house, which isn’t a bad idea anyway.
I don’t even look at my retirement fund. I don’t need that worry. I just count on it going up over time, and when I have to look at it for tax purposes, I don’t worry much about the numbers, up or down.
Tell me about this small investment home idea.
Nothing could go wrong with investing in real estate!
Paying down debt is probably the best guaranteed investment out there right now. What’s your interest rate?
I’d think the chance that interest rates will rise in the short term (year) are relatively small. All signs point to a weakening Euro zone, and a thinking-of-double-dipping Amerizone. Keeping interest rates low is one of the easiest monetary policies governments can take to help stimulate investment and growth. I wouldn’t invest in a bond fund past a year+ without a hard review of the economic conditions though.
If you have enough money to invest, or your tax bracket is high enough, the tax-free bond funds are not a terrible way to make a bit of free cash. If you have a lower tax bracket it might be more profitable to take the hit from a taxable bond fund.
Don’t ask me since I haven’t done the research. I’m sure there’s a helpful slumlord or two on QT3. The idea is that homes are cheap right now and people still need a place to live, so for a minimum down (or cash for a foreclosure) you can get reasonable return on your money. But it takes a lot of work, obviously, and there is risk involved, although less now that the bubble has burst. shrug
Shadarr might be right again. If you have any short-term loans, you can pay them off and free up your monthly payment. Paying down your house could be a good idea in general too, but doesn’t get any extra cash for small projects like you are talking about, since the mortgage is so long.
No, there isn’t. “Safe” cds, money market accounts, and the like in general are never going to make you enough money after inflation to matter. They’re really only useful for hedging against inflation; to make actual money you have to invest in some level of risk.
As to home investing, on one hand they’re cheaper then before. On the other, in lots of markets there’s a 10-year backlog of excess housing and the price ratios still stink.
Paying down any debt other than your mortgage or student loans is a slam-dunk, though.
Prepaying your mortgage really isn’t a good investment strategy unless you can pay the whole thing off and still have money to invest. Mortgage rates are so low now that they’re practically giving them away. You might pay double the cost on a 30 year mortgage at today’s rates, but if you make just 5% a year you can pay for it in 15 years.
The main thing about paying if off is peace of mind and financial security, increasing your monthly disposable OR the chance of increasing property value, which seems rather sketchy nowadays, you know…
Vanguard has a tax free fund earning almost 4%. Symbol: VWAHX
Real Estate always goes up! Buy now or be priced out forever!
BP is at a 7 year low. Im just saying…
Yeah but they stopped paying the dividend to please some turtle huggers…
Give me your money. I will guarantee you a 2% return.
P.S. Also tell all your friends. and have them tell their friends. I totally won’t cheat you guys in a pyramid scheme because I’m a bleeding heart liberal and a QT3 member.
If you’re still interested in getting 2% on a savings account, today’s Get Rich Slowly post was written just for you.
Agreed, but I’ve already done that. My mortgage is at 4.25, and throwing money at the principle will help in the long run and is probably my best long term investment strategy right now. I already know that. I was hoping someone knew a way to get a decent return on a short term investment.
I’m not talking about a lot of money or anything. I’m a professor, so I’m not a rich!