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What is your mom's ultimate goal for the money? Is this money she isn't planning on using for a long time (a decade or longer), or does it need to be available for shorter-term needs?
Without knowing the answers to those questions, no one can suggest appropriate investment options.
What is your mom's ultimate goal for the money? Is this money she isn't planning on using for a long time (a decade or longer), or does it need to be available for shorter-term needs?
Without knowing the answers to those questions, no one can suggest appropriate investment options.
Yeah, she doesn't need the money, just hoping to put it somewhere else other than a savings account.
OP said it's to invest, which means it's obviously not for short term needs like groceries...
I would advise putting the money into either a balanced index fund, like Vanguard VBINX
- or -
Putting 80% of the money into Vanguard Total Index (VTI) and 20% of the money into Vanguard Extended Market ETF (VXF), if mom is able to take a bit more risk.
No-load, index funds are a good bet to take. The trick is to not touch it even when the market drops (and it will drop, but it will also rise as well) and let it grow over several years. And add to the investment when possible.
It depends. If it were my mother probably 50% either Short Term Investment Grade or Limited term Tax exempt depending on her bracket, 35% Total Stock market, 15% Total International Stock Market. However, it depends on her risk. $7k is not exactly a game changer in retirement. Another possibility is a Vanguard dividend fund.
My elderly mother (approaching 89 yrs old) read a recent article by Warren Buffet about index funds and now wants to put a little money into some, so she asked me for assistance. She's busy saving up about $5K because she doesn't want her investment manager to know she's going to invest some on the side without him.
Anyway, since it's a small amount, I plan to open a Vanguard account for her and put $4K of it into VTI and $1K into VXF and let it ride and see what happens. Alternatively, if she's feeling nervous when the time comes, I'll instead put it into either VBINX or Wellington.
I'm happy she is willing to listen to Warren Buffet; just wish she had Warren advise her a decade ago.
Haha thank you for the input! Yeah, $7k is not a game changer but my mom is retired now and lives a simple life, so she would honestly be happy if I can turn that $7k to $7,500 next year (not saying I will take it out), lol. She doesn't know much about investment but has been listening to me about it and agrees that doing something to it is better than just leaving it in a savings account where it actually depreciates lol.
If it was my own money, I can handle a bit more risk like what I did with my roth but since it's my mom (being older and all), and it's her money, I want to find the best possible route since she's trusting me on this
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