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Where to put my savings?

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RecentGrad23
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Where to put my savings?  Reply with quote  

I am a recent college graduate with my first job now as an accountant that I have had for 5 months. I have started investing in my company 401k maxing the match, but I have started to save a bit much in my savings account. With that said, I am still living at home with my parents, and would like to start saving for "life", so to speak. Where should I be putting all of my savings right now? I don't trust enough to invest it myself, so is my best move to meet with a financial advisor from a random company? I wouldn't know the difference between Edward Jones from Northwestern to Raymond James. Sorry for the long explanation, and thanks in advance.
Post Mon Apr 17, 2017 2:11 am
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oldguy
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quote:
I don't trust enough to invest it myself, so is my best move to meet with a financial advisor from a random company?


No, most of us had to educate ourselves to become wealthy. And the reason is logical - ie, the generic US Market (measured by the SP500 Index) has a longterm average return of 11%/yr. So an advisor and/or planner must get a 13%/yr return (11% for you and 2% for overhead) from that same population of US stocks. And that is an almost impossible task - about 85% are unable to do it - and the 15% who do it are not the same people every year. A more direct approach is to buy the unmanaged SP500 Index directly and accept the 11%/yr. (most 401k plans provide that choice).

It's not that difficult - eg, $5000/yr invested at 11%/yr for 35 yrs is $1,900,000. (Sometimes I wonder why so few people do that - eg, you and your employer are probably putting $5000/yr into your 401k? - so you are already on track to ~ $2M.
Set you far-future goal and invest accordingly - if you want $4M, invest $10k/yr, and so on.

John Bogel, the founder of Vanguard, wrote a very direct, concise book on just this subject - The little Book of Common Sense Investing' it's a short read, costs about $15, well worth your time. And it's a good reference book to own.

quote:
start saving for "life", so to speak.


A key item is 'shelter'. If you're in Seattle or San Fran of DC , you could easily spend $2000/m for a small 700 foot apt. Conversely, that apt in Wichita or Des Moines might go for $500/m. Another major expense, cars, is almost region-neutral, a new car in DC is the same price as a new car in Wichita.
Post Mon Apr 17, 2017 2:52 pm
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RecentGrad23
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So it seems like your suggestion for me to start an unmanaged money market account is my best route. Is there an online company that you would recommend? I know that many charge certain fees for trading, similar to the fees that conventional financial advisors would charge. Any suggestions on a company with little to no fees? The reply made this situation much clearer for me, thank you.
Post Mon Apr 17, 2017 3:51 pm
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oldguy
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quote:
many charge certain fees for trading, similar to the fees that conventional financial advisors would charge. Any suggestions on a company with little to no fees?


I like Vanguard and Fidelity, they are 'the big two' for no-load trading. Their fees for their unmanaged SP500 Index Funds is about 0.10% to 0.15%/yr - so the remaining 10.9%/yr is yours.

BTW, 'trading' is to be avoided, a better plan is to 'buy and accumulate' rather than trade in & out. It is liberating to grasp that, it frees you to simply invest rather than having to try to pick winners & losers. Ironically nearly all market literature, books, software, are directed at 'beating' the market. (And, as I said earlier, only 15% of the professional money managers match or beat the market - but they can't stop trying - lol).
Post Mon Apr 17, 2017 5:13 pm
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Barb Carpenter
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The number of people is having the money and they don’t have an bestessays support idea where to invest the money. For those people, they can invest the money in bonds shape or invest the palace where they can make it double like stock, property or other beneficial areas.
Post Fri Apr 21, 2017 6:49 pm
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AnneB
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Ah from what I have observed in my case it is much better to invest in Forex market, if you don't know about it you can take a read with this Investing money forex especially that there are a lot of positive experience from this one.
Post Thu Apr 27, 2017 5:07 am
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anngarnt
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If I were you, I would launch my own business. When I inherited money from my granny, I started up my own beauty salon. To attract more clients, I'm creating a website with help of one of these salon wordpress templates Online presence is a must for any business.
Post Fri Apr 28, 2017 7:40 am
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littleroc02us
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quote:
Originally posted by anngarnt
If I were you, I would launch my own business. When I inherited money from my granny, I started up my own beauty salon. To attract more clients, I'm creating a website with help of one of these salon wordpress templates Online presence is a must for any business.


I removed your link to the website because it is only allowed in your profile signature.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Fri Apr 28, 2017 1:56 pm
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Cecille Hollinshead
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If you want to get maximum interest from every penny you save, check out this article that i've read http://www.moneysavingexpert.com/savings/which-saving-account
Post Fri May 05, 2017 3:53 am
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JaredDeans
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Post Tue May 23, 2017 12:51 pm
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Rahimlakhany
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Well, there are already great options put forward by some people. I personally feel, it’s about security that got to be first up seen and after that everything else. I believe the current scenario says investments on Crypto Currencies are pretty good while Forex trading is another option you can take. However, if you go with the latter option then you need skills and experience, so be sure of what you wish to do.
Post Fri Jul 07, 2017 5:18 pm
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screen23
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Post Fri Jul 14, 2017 8:16 am
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Steven44
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If you decide to meet any such guys RecentGrad23, please be very careful. You might find people who are more interested in making money for themselves than for you. Anyway, the best way to invest is to invest in yourself, you shouldn't throw that option so quickly away
Post Tue Jul 25, 2017 1:10 pm
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anirudh
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So, you’ve put up an savings that is automatic and you’re finally building up that emergency fund, but where should you keep your savings such that it earns the most interest for your needs? Luckily, there's a lot of savings that are different available, not all are appropriate for every situation.

Savings Accounts

Almost certainly, you've got already established a family savings at the local bank or credit union, and you will have this linked up straight to much of your bank account which will make money that is transferring savings easy.

a savings account is considered the most place that is convenient conserve money, nonetheless it may possibly not be putting your hard earned money be effective.

When using a checking account, it is important to go through the interest rate. Depending on the spot where you bank and what sort of account you have got, you might be earning anywhere from less than 1 percent as much as 4 percent or maybe more. The problem is that numerous banks only provide high interest levels for significant balances over a certain amount. You are only earning 0.65 percent, after accounting for inflation, you are actually losing purchasing power if you find.

The thing that is best about savings accounts is the fact that they are completely liquid. This means you have access to your cash on very short notice. You may be able to go online and transfer funds from savings to checking, withdraw from an ATM, or stop into the local branch.

Money Markets

As well as your basic family savings, you could encounter another savings vehicle called a money market.

There are two different types of money market accounts: money market bank accounts and cash market mutual funds.

Money market accounts made available from your bank work almost just like far since the consumer is worried, but considering that the money held in a money market account is invested a little differently, you will find usually more restrictions on the account.

Typical restrictions are generally higher balance requirements and a limited quantity of withdrawals each month or quarter.

Money market mutual funds are not issued by a bank, but they are made available from investment companies. You would need to have a current brokerage account or establish a new account with the fund company straight to take part in a money market mutual fund. These funds invest in various short-term investments collectively so that you can produce an attractive interest rate. Unlike a money market account at your bank, they are not FDIC insured.

Although money market accounts generally have higher rates of interest than a savings account, the restrictions from the amount of withdrawals each month or perhaps the dependence on opening an independent account make these funds slightly less liquid.

Certificates of Deposit

A certificate of deposit, otherwise referred to as a CD, is another accepted spot to save money that is routinely provided by your bank. A CD is a right time deposit, meaning that the amount of money you put on deposit must remain there for a specified amount of the time before you can withdraw it.

You can purchase a CD with many different time frames as short as you month to up to several years or even more. The longer you agree to leave your money on deposit, the more interest the bank will pay you in most cases.

Because you have to leave your cash in the CD for the length of time selected, this will probably create your money less accessible than a savings or money market account. This could be a good thing you to leave the money alone, but in an emergency where the money is needed very quickly, this can be a hindrance since it encourages. Fortunately, you have access to your money prior to the CD matures, nevertheless the bank will impose a penalty which could effectively wipe out of the interest you have got earned.

Savings Bonds

Another option that is possible your savings is in savings bonds. Savings bonds are issued because of the U.S. government and so are supported by its faith that is full and. Comparable to CDs, savings bonds have a maturity date set in which the bond reaches the value that is maximum. In most cases, this will be 20 or three decades.

Savings bonds are credited interest each month and you can cash in a savings bond at any time, although doing so prior to maturity may end in foregoing some interest.

You can buy savings bonds for the most part banks or online at Treasury Direct.

Like CDs, you might encounter liquidity issues with savings bonds since they are purchased separately and you will only receives a commission from their website through redemption at either a bank or by mail.

What exactly is Right for You?

When it comes to savings, there wasn’t a right or wrong answer. It ultimately is dependent upon your requirements. If you are using your savings for overdraft protection and would like to get it available instantly in case you want it, a family savings might be the most appropriate. If you're saving for a big purchase or something predictable a couple of months or years down the road, you're able to probably find better rates with a CD or possibly a money market fund.

For many people, it comes down to having a mix of multiple savings vehicles. There will be section of an urgent situation fund in a checking account in the bank, possibly some money in a money market fund in an investment account, and some CDs or bonds stashed away for longer-term savings. Whatever the case might be, you intend to make sure your cash is working as hard as it can.

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Post Fri Jul 28, 2017 6:44 am
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