Investment question for those in the know (bonds, IRA, brokerage)
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We are debt free outside of monthly necessities (utilies, gasoline, groceries, cell phones). No mortgage but we do rent. All vehicles are paid in full and have insurance and we have a renters policy as well as 2 life insurance policies.
Now to the question: We have $5000.00 to invest right now and would like to do so in a quick return but easily accessible account in case we have an emergency and need to access the money without a penalty or a low penalty for early withdrawal.
I can't speak on the "quick return" because that is always a gamble, but I keep my emergency money in money market mutual funds. It's easily accessible, earns a higher interest rate than a bank account, can be easily transfered into stock funds at a latter date, and is extremely secure.
We are debt free... All vehicles are paid in full... 2 life insurance policies.
We have $5000.00
That $5000 isn't available for investing... it's the start of an emergency fund.
The most you can do is "park" it to make it a little difficult to access so it remains an EF.
I'd suggest laddered CD's... two each at $2500 with maturity dates 90 days apart.
Keep saving and keep adding CD's (with one maturing @90 day intervals) to the EF
until you have about one years worth of expenses covered.
THEN... think about pushing the future savings into investments.
Start by maxing out any 401K's; then funding IRA's and HSA's.
THEN... look into mutual funds.
If your job/family situation is stable and secure consider buying a house too.
That $5000 isn't available for investing... it's the start of an emergency fund.
The most you can do is "park" it to make it a little difficult to access so it remains an EF.
I'd suggest laddered CD's... two each at $2500 with maturity dates 90 days apart.
Keep saving and keep adding CD's (with one maturing @90 day intervals) to the EF
until you have about one years worth of expenses covered.
THEN... think about pushing the future savings into investments.
Start by maxing out any 401K's; then funding IRA's and HSA's.
THEN... look into mutual funds.
If your job/family situation is stable and secure consider buying a house too.
hth
The home fund is already started and we are currently looking for one, I'm more than ready to go back home and leave where we are at the moment. I'll talk to my husband about your advice and see what he thinks. Thank you so much for your time and guidance.
I can't speak on the "quick return" because that is always a gamble, but I keep my emergency money in money market mutual funds. It's easily accessible, earns a higher interest rate than a bank account, can be easily transfered into stock funds at a latter date, and is extremely secure.
Thank you for taking the time to respond I do appreciate it very much, I'll discuss this with my husband and see which way he wants to proceed. We are debt free for a couple months now so this is a brand new path through our timbers as we journey through our lives together.
If you happen to visit Russia, you may open a savings account that pays up to 8% in USD.
Maybe it's possible to open an account online at some Russian brokerage that offers structural products - even guaranteed return on these is way better than anything in US.
The only possible catch (aside from debit card fee for ATM withdrawals, and up to $50 wire transfer fee) is that you'll have to pay interest income tax in Russia - which is 30% for foreigners. But then you'll pay nothing in US, as we have a double taxation treaty.
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