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Old 11-21-2014, 04:39 PM
 
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I'm receiving some money through inheritance and after paying some bills and putting a little in my credit union savings account, I will have about $25,000 left over to do something with.

My husband and I are about 10 years from retirement. The company I work for is being sold, which means I may be out of a job. I'd like to retain access to the cash if I need to start drawing on it in a year or two. We also may want to pull a little out to do some home improvements if my employment ends up fine. Or we may just leave it there indefinitely. In short, I'm not exactly sure how soon I'll want some or all of it!

Instead of just throwing it in a savings account, I'd like to put it in something that will earn a little bit better interest. I already have an IRA and brokerage account with Fidelity, and make use of their no-fee EFTs, but that is with money I'm willing to risk. I'd like something a little safer but still liquid for this.

What would you do in my situation? Just leave it in savings? Money Market? Mutual Fund?
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Old 11-21-2014, 04:47 PM
 
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with only ten years and possible liquidity needed there is no investment really except some bonds that would not risk loss over such a short time frame if you needed the money..
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Old 11-21-2014, 05:06 PM
 
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Well, I don't mind some risk. Just looking for something a little more conservative than ETFs or stocks. I'd been thinking about breaking up the $25K into $5k increments and investing in separate funds. That would also allow me to cash out one of them at a time while leaving the rest alone.

Not sure if my logic is sound at all, though.
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Old 11-21-2014, 05:31 PM
 
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Quote:
Originally Posted by LoriBee62 View Post
Well, I don't mind some risk. Just looking for something a little more conservative than ETFs or stocks. I'd been thinking about breaking up the $25K into $5k increments and investing in separate funds. That would also allow me to cash out one of them at a time while leaving the rest alone.

Not sure if my logic is sound at all, though.
3-year CD ladder. Right now rates are well above 1% despite ZIRP.
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Old 11-21-2014, 06:14 PM
 
Location: Central IL
20,726 posts, read 16,267,096 times
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Quote:
Originally Posted by LoriBee62 View Post
Well, I don't mind some risk. Just looking for something a little more conservative than ETFs or stocks. I'd been thinking about breaking up the $25K into $5k increments and investing in separate funds. That would also allow me to cash out one of them at a time while leaving the rest alone.

Not sure if my logic is sound at all, though.
You don't have to sell all the shares in an account - you can "cash out" any amount, at least down to whatever minimum the fund states.
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Old 11-21-2014, 06:38 PM
 
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Originally Posted by reneeh63 View Post
You don't have to sell all the shares in an account - you can "cash out" any amount, at least down to whatever minimum the fund states.
Good to know. What about splitting it for the purpose of protecting the balance? I've been doing that with ETFs and am glad I did. One has been sucking. But the other 4 are doing well enough so that overall, I'm making a decent return.
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Old 11-21-2014, 06:44 PM
 
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Originally Posted by ncole1 View Post
3-year CD ladder. Right now rates are well above 1% despite ZIRP.
Thanks for the info. I'll have to keep checking around as I've got to go up to 5 years at my credit union to just get 1.2%
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Old 11-21-2014, 07:35 PM
 
Location: Central IL
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Quote:
Originally Posted by LoriBee62 View Post
Good to know. What about splitting it for the purpose of protecting the balance? I've been doing that with ETFs and am glad I did. One has been sucking. But the other 4 are doing well enough so that overall, I'm making a decent return.
If you go with an index fund (depending on how broad) it's already diversified, and will have lower fees taken out. But again, you talk about a decent return - you're probably not going to do much better than beat inflation without taking on more risk than you seem to want.
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Old 11-21-2014, 07:41 PM
 
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I think any money you might need in the next 2 years should be put aside in cash.

Any money you wouldn't need for 3-5 years could go into a bond fund such as:

Dodge & Cox Income
Vanguard Intermediate Term Bond Index
Thompson Bond
Vanguard GNMA (The most this one has ever lost in a calendar year is 2.33% in 2013...It's been around since 1980 and has had only 2 losing years since that time).

There are also bond ETFs but I just don't follow ETFs as much as mutual funds...but I'm sure you can find either a short or intermediate term bond ETF to invest in. I wouldn't invest in long term bonds, though...too risky if interest rates go up.

For anything longer than 5 years, I like:

Vanguard Wellesley Income (60% investment grade bonds & 40% stocks).

If you really think that you won't need any (or some portion) of the money for more than 5 years, you might want to go with Vanguard Wellington, which is 35-40% bonds and 60-65% stocks.

Also, if you like Fidelity, both Fidelity Puritan and Fidelity Balanced are good funds. They are typically 65% stocks & 35% bonds...although these funds are a bit riskier because they typically pick more aggressive stocks than Vanguard Wellington does.

Last edited by mysticaltyger; 11-21-2014 at 08:13 PM..
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Old 11-21-2014, 08:23 PM
 
323 posts, read 427,717 times
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Quote:
Originally Posted by LoriBee62 View Post
Well, I don't mind some risk. Just looking for something a little more conservative than ETFs or stocks. I'd been thinking about breaking up the $25K into $5k increments and investing in separate funds. That would also allow me to cash out one of them at a time while leaving the rest alone.

Not sure if my logic is sound at all, though.
there are funds and then there are funds...................lol. you need to be more specific.
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