Graduated from ISU over a year ago and have some money to invest. What is the smartest/wisest way to invest $5,000? All suggestions very welcome. Thanks guys.
Best way to invest $5,000?
- Thread starter FiveStarCulture
- Start date
Depends on how soon you want to spend it. With the way the economy is right now your guess is as good as anyones.
Shop intrest rates if you do this. Easiest money I make each month is off my intrest.
There really is not one "best way" to invest. You should be looking to invest based on your needs and goals, be it either short term or long term.
If you have short term goals, you'll definitely want to keep it in a liquid account and in all honesty with $5,000 and a year removed from school probably be best off keeping it in a savings account.
In the case that you are looking at a long-term plan, I'd recommend doing some research into setting up a Roth IRA and funding the first year with that $5,000 (which as of a year ago was the max you could contribute in a year).
If you have short term goals, you'll definitely want to keep it in a liquid account and in all honesty with $5,000 and a year removed from school probably be best off keeping it in a savings account.
In the case that you are looking at a long-term plan, I'd recommend doing some research into setting up a Roth IRA and funding the first year with that $5,000 (which as of a year ago was the max you could contribute in a year).
Put it in your checking account and use it while you bank another 5K without paying taxes on it by putting that 5K in an IRA.
I've gotten about a 20% return on the money I invested in an IRA during my Co-op. :biggrin: All I have to say is yay for dividends.
I've gotten about a 20% return on the money I invested in an IRA during my Co-op. :biggrin: All I have to say is yay for dividends.
I'd be all over paying down my student loans if some money landed in my lap, but maybe that's just me.
There are so many variables that go into that equation. What else do you have saved? What is your risk tolerance? Do you have any big purchases coming up that you would need that money for?
Bottom line, don't just do what someone tells you is best if they don't ask you any of these questions.
Bottom line, don't just do what someone tells you is best if they don't ask you any of these questions.
you're a young guy, so I would recommend investing it in an index fund like SPY. Before doing that though, ask yourself if you'll need the money w/in the next 3 months or so. if you do, then snag the highest interest money market fund you can find until you need the money.
The reason you should invest in SPY is because it is highly liquid and a very inexpensive way to invest in the stock market w/o taking individual stock risk. In addition, if you don't need the money anytime soon, then any short-term pullback in the market should not be of great concern.
As others have said though, this is a hard question w/o knowing more about your situation. ALWAYS have at least 3 months of living expenses in a savings account (preferably money market) to guard against unforseen expenses.
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The FED recently announced that it will start buying treasuries to keep interest rates low. So I think we're heading for 3.0% rates on the 30-yr mortgage and 1.25% rates on the 10-yr treasury. I think these low rates will persist for many many years just like Japan has been suffering from.
With that in mind, I just opened up a CD account with a 3.5% APY and a 10-year term at discoverbank.com.
With that in mind, I just opened up a CD account with a 3.5% APY and a 10-year term at discoverbank.com.
