My interest rate is currently .15%. I started looking into CDs, thanks. Since I'm not sure when I will need this money it seems like a staggered approach would be best?

There are plenty of online banks with about 1% savings account rates. At a minimum, move the funds to the 1% savings.

If you're really not sure about using the money, yeah I'd probably build a ladder. Look online for the best CD rates (online banks or local credit unions probably the best).

Hi all-- thanks for the help.

Country: USA
Income: $73,100 salary + $3,000 bonus
Risk Tolerance: Low
Timeframe for investment: 3-6 years
Debt: None

I have about $10,000 to invest with the goal of eventually having $100,000 in 3-6 years for a down payment on a house. I can probably put away another $1k to $1.5k monthly. I currently am maxing my Roth IRA and have maybe 18k in stock's and ETF's, and 25k in retirement accounts.

The initial $10k cash plus $1k monthly-- any suggestions on where to invest that? Should I potentially re-allocate the stocks/ETF's to a lower risk investment? I'm hoping it's not too unreasonable to still have stock exposure when I expect an $80k-$100k down payment in 3 to 6 years.

Will your income increase significantly in the future? Are you single or expecting to be married to a current GF within that time frame?

I couldn't imagine buying a $400-500k house on a $75k salary unless you expect that salary to significantly increase or it will be shared with a wife who also earns. Also, if you're serious about buying I personally wouldn't be seeking much, if any stock exposure.

My opinion may differ from the consensus of the board, but my advice would be to have some stock component for this money.
This calculator http://www.moneychimp.com/calculator...calculator.htm

tells me that $10,000 with a $12000 annual addition compounds to ~$85,000 @ 6% over 5 years. If we earn 1% over that 5 years, we have just over $72,000.

I would strive for that 6% return by using the Vanguard LifeStrategy Conservative Growth fund, which is 40% stock and 60% bonds.
The obvious downside to this strategy is you may end up with substantially less than $72000 at the end of 5 years if the market goes bad.
I'm sure people will point out that we are in the midst of a 7 year bull market that is bound to drop, but they were pointing that out 4 years ago as well. You will have some DCA protection by purchasing monthly over the next 5 years.

If I were you I'd put most everything into a low cost balanced portfolio. Vanguard is great for this.

When you need to add to your roll you can sell whatever has gone up, which will move you back towards your target allocation. You should be able to sell and transfer in just over a week. Sales take 3-4 business days to clear and then another 3-4 days for a transfer.

A lot of people recommend putting anything you may need soon in super-safe investments. IMO if you have a reasonable cushion then you are better off in the long term just having everything, including your 'emergency fund', in a balanced portfolio allocation. A balanced portfolio is going to have better long-term returns than super-safe assets. It will also have bigger swings of course. As long as you have enough cushion so you still have plenty of assets when things are swinging down then you will come out better on average if you are more often in the higher return allocation.

If your income is correlated with market swings then it would make sense to be more cautious. If you expect to be making less, and more likely to be drawing down your assets, when the market goes down then it might make sense to be more cautious.


You might also consider sharing liquidity with other players that you trust. You likely have a very good reputation and could borrow from others to cover short term bankroll needs. I'm sure you realize this already. 8) This would help you avoid selling, and thus avoid some taxes, if you end up coming out ahead and don't need more poker bankroll after all.

But if you sell the ones that went up, then you'll have income tax to pay on it. I wouldn't suggest purposefully selling the ones that will cause you to recognize gain and, therefore, have income tax to pay. If you have losses available to be used against the gain, then sure sell the ones with gain, but other than that I wouldn't suggest selling exclusively the ones with gain in the event that some liquid funds are needed for poker.



EDIT:

Oh, I guess you were considering a one fund portfolio where the fund is very diversified inside itself and, therefore, there wouldn't be different funds to choose between when needing to sell for liquidity.

That is an excellent point. Sorry, I neglected to mention the $400k-$500k range is contingent on me purchasing a home with my current gf, who is a PhD candidate and will be graduating in that timeframe. I would expect our combined income to be $160k-$200k before tax. She doesn't make much now, so I'm doing all the saving.

Perfect, I love Vanguard funds because of the low fees, so I may consider allocating some money to this. I would prefer not to go 100% bonds-- I'd rather take some risk at needing to purchase a less expensive home. I don't need the $400k-$500k range, but it's a nice goal to save for.

you should buy stocks tesla

It is going to be awfully hard to maintain an asset allocation if you mostly sell your losses. 8)

I would suggest using withdrawals as rebalancing opportunities and also tax loss harvesting as a separate thing.

Hi Guys, Just a quick question, what broker / website would you recommend for a European Investor looking to put small money into an Index fund (roughly 5k) ?

Did I make any mistakes in my OP or is this just not a situation where I could consider investing? Really appreciate any advice. Thanks

I normally would offer some advice, but being as you are in the UK it makes it harder, because there may be special situations I know nothing about.
Is the student loan accruing interest? With a low unstable income you aren't really in a good spot to invest in anything outside of really short term safe investments, which basically pay nothing.

If you were in my spot at age 46 and had $10k - what would you do right now?

a) Pay down some equity on my mortgage to get it closer to 20% so I can drop BMI - also cut years off the life of the loan.

b) Go long oil - something like XOM.

c) Other?

How much do you already have in retirement savings? Excluding equity in home.

$120k in a 401k.

I do have an idea to buy another place maybe in the next 5 years and rent this place out.

Also if I was going to invest what's a good cheap online brokerage? I heard Ameritrade was basically down for a while this morning.

I'm thinking home equity definitely makes the most sense at least until I can over the threshold to get rid of BMI. That's $150/month, guaranteed $1800 return.

Can't go wrong with Vanguard, they have really good fees. Especially on Admiral Shares.

No brainer.

Saving up for home downpaymemt.

Currently holding funds in .99% savings account.

Timeframe is 9 months, any thoughts on a better place to stash funds?

Welp, wishing i spread out my Roth contributions for 2015 rather than lump sum contribution in February!

Are you sure you can get rid of PMI? The last couple of loans I have applied for had to be refinanced to get rid of it if I recall correctly.


LOL at option b)
Markets are reasonably efficient IMO.

I don't know anything better.

Where do you live?

I've heard you can get rid of it if you get comfortably over 20% equity. If not I will refi.

Then why ever invest in anything other than S&P index fund?