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1. No debt at all
2. 3-6 month in emergency fund (just put 5-10k in savings account)
3. Everything else in investments, mainly stocks. Avoid mutual funds, go for individual stocks.
4. First 250k-500k into income producing stocks. Look for 4-6% yield/annum. That will give you some nice cash flow, you could even retire off it if you live frugal lifestyle.
5. Above 500k you can invest in more speculative stocks.
You can also do active management investments like rental properties, farm land etc. But only do it if you have the time and commitment. Could be more lucrative than the stock market.
As for starting a programming services business check out odesk.com and do some side jobs. Great way to start. You don't need hundreds of thousands to start a programming business - its all services. Start by working on projects yourself and reinvest the money back into the business. As you get more contracts then you can hire some CS interns to help you or outsource online. I started my business with 1,000 and it nets over 200k+ today but thats after 5 years of blood sweat and tears. It aint easy thats for sure!
If I was going to commit my money for 5 years, I'd buy a broad based bond fund that can invest in the US & Internationally.
I've had Loomis Sayles Bond...love that fund! Despite getting smashed in 2008, it came back nicely. I bought extra shares in 2008 an 2009 when it was down and it came roaring back. One of my few smart financial decisions during the crash! I should've put more in when it was down!
Despite the crash in 2008, it's returns are over 8% for the recent 5 year period...I wouldn't expect it to do that well going forward...but it's still a great fund!
^I would not put any money into any CD with longer than a 1 year term.
Quote:
Originally Posted by golfgal
I agree, committing to a 5 year CD with rates where they are right now is just foolish.
To clarify - the only reason I suggested a 5 year CD was so that the OP could not touch it. No temptation and/or threat of a penalty usually makes the money stay in the bank. An account with access usually gets raided, for whatever reason.
The last time I owned a CD was when I was getting 16% in 1981. Boy, those were the days.
To clarify - the only reason I suggested a 5 year CD was so that the OP could not touch it. No temptation and/or threat of a penalty usually makes the money stay in the bank. An account with access usually gets raided, for whatever reason.
The last time I owned a CD was when I was getting 16% in 1981. Boy, those were the days.
True, but interest rates on home loans were about the same too
Pay off your car loan immediately. Pay off credit card bills each month. Become totally debt free. Look for an interest bearing savings or money market account - some of them are paying close to what short term CD's are paying. You are doing great with your savings, but I'd also invest in a Roth and bank any raises you get. Best wishes!
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