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Originally Posted by fishdonkey
I wonder why I haven't been able to find some kind of recent "investing poker money for idiots" thread.
my money is currently sitting in an ING Direct savings account which yields a meager 1.85%. they also have GICs but the rates are down to something like 3.15% for a 5 year GIC, which is a bit of a joke. is there a better, simple way to get a 3%+ rate? the few times i looked, bonds didnt seem too impressive.
Quick answer is: no. A good, high interest online savings account like ING direct is going to be your best bet.
Complex answer is: sort of. You can buy bonds that get nearly 3% with a low level of risk, and these can be sold after buying. The problem is that if interest rates go way up, the value of the bond diminishes (although it will eventually be worth face value). There are also instruments like MUNI bonds that can fit your description.
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i only have about 50k in savings for now (which im adding 5k per month to) so i dont want to bother with some very complicated way to invest it. are those index funds on the stock market something i should consider looking into?
Definitely. There are numerous sites: ETRADE, Scottrade, Charles Schwab, etc. It's quick and easy--setup is about as hard as you ING account was, and they can transfer money from your ING account directly into the brokerage account. I use Schwab--higher fees per trade but a lot less BS (like no maintenance fees, e-statement fees, inactivity fees, etc) that some of the low cost per trade palces hit you with.
Index funds are easy. Most people invest through ETFs (exchange traded funds)--there are tons, you buy them on the NYSE through your brokerage account just like stocks, and the fee structure is way more favorable than mutual funds. You can also invest in exotic things much more easily and cheaply than you would otherwise--buying other currencies, precious metals, emerging market telecom companies, etc, can be done very easily. I myself am invested pretty heavily in emerging market ETFs because the dollar is strong and those markets have been hit hard, making them a pretty good value.
Many young people are more than 80% invested in stocks (although many of us have cash, precious metals, real estate, etc as well). They tend to give superior returns over long time horizons.
You should probably read a bit about investing and stuff before jumping in headfirst. But I would definitely get an account going an put a few grand in it to get started.