Best way to invest these days?

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skeedo

Senior member
Nov 29, 2004
269
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I have a significant balance in my savings account, and it's sitting there collecting more dust than interest. I'd like to put the money to work and generate some cash, potentially low risk or risk free.

I've considered the stock market, however I don't feel like dealing with the associated stress. My brother recently made some money with stock options but said he had to constantly keep an eye on it and was always stressing over whether or not to sell the option contract. I can't say I've had much experience in the stock market either.

I've also considered real estate, but don't think I have enough cash to go that route as yearly property taxes would most likely nullify any profits.

CD's have junk interest rates these days. There are T-bills, bonds and what not but don't really know if those would be a good option either.

Any suggestions on how to put my money to work would be great.
 
Imp

Imp

Lifer
Feb 8, 2000
18,828
184
106
rudeguy said:
Cocaine
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Better to go with meth lab or MJ farm. I'd still go with meth lab because once they start legalizing MJ, your investment might lose a lot of value.

It's like buying a house to rent versus buying stock: you can rent and hold the house (i.e. ongoing income) versus buy and hold for stocks without great dividends.
 
kranky

kranky

Elite Member
Oct 9, 1999
21,019
156
106
Stock market investing does not have to be stressful nor do you have to constantly monitor anything IF you are investing for the long term. Choose a low-cost index fund from Vanguard or Fidelity and let your money grow over the long term.

However, if your goal is to generate cash right now, there is no good option. Interest rates are too low. You can try a high-interest checking account if you can meet the requirements for monthly debit card transactions + direct deposit, then when that bank cuts back their rate shop around for another one. Best savings account or money market account right now is less than 1%. Ally is good for being competitive and easy to work with.
 
E

Exterous

Super Moderator
Jun 20, 2006
20,569
3,762
126
Jumpem said:
Leave it in savings until you have a $50k or so emergency fund.
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I believe the rule of thumb is 6-9 months of expenses in savings, so while situations will vary that is probably going to be too much esp considering its going to be losing value sitting there with where interest rates are in comparison to inflation

kranky said:
Stock market investing does not have to be stressful nor do you have to constantly monitor anything IF you are investing for the long term. Choose a low-cost index fund from Vanguard or Fidelity and let your money grow over the long term.
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:thumbsup: Or Schwab since they lowered their ER recently

If you don't want to pay much attention to what is going on then these would make fairly good options:
http://www.bogleheads.org/wiki/Lazy_Portfolios

You'd still want to keep the occasional eye on it and rebalance when necessary
 
Jeff7

Jeff7

Lifer
Jan 4, 2001
41,596
20
81
kranky said:
Stock market investing does not have to be stressful nor do you have to constantly monitor anything IF you are investing for the long term. Choose a low-cost index fund from Vanguard or Fidelity and let your money grow over the long term.

However, if your goal is to generate cash right now, there is no good option. Interest rates are too low. You can try a high-interest checking account if you can meet the requirements for monthly debit card transactions + direct deposit, then when that bank cuts back their rate shop around for another one. Best savings account or money market account right now is less than 1%. Ally is good for being competitive and easy to work with.
Click to expand...
:thumbsup:
This.
I started an IRA there about 2 weeks ago.
It seems that over the long term, stock market volatility gets filtered out, if you don't panic when the market takes a dive.

Short term: Maybe I-bonds? They've also got lousy interest rates now, but they'll at least stop the bleeding from inflation. If you cash them out in less than 5 years from time of purchase, they penalize you by taking back the interest from the last 3 months.

And TreasuryDirect has some really convoluted security measures.
Add/change bank account = fill out a paper form and mail it in. To get in, enter account number. Then they e-mail you a one-time-use password. Enter that password. Then enter your regular password using an on-screen keyboard. Then slit a chicken's throat, print out yet another form, fill that out with the chicken's blood, and mail it in inside of an envelope whose stamp is affixed by rubbing it down with the chicken's beak. And I really wish that more of that was made up.
Oh, and if you use your browser's Back or Forward buttons, it logs you out.


Edit: Reading the form, it gets even better. I've got to sign it in the presence of a Certifying Officer at a bank, trust company, or credit union. A notary public? Nope.
And some of the "help" or "FAQ" links will log you out without warning, making you go through the Account# + one-time-use password + password login procedure.
Oh, and if you accidentally double-click any link, it also logs you out.

Christ, I don't think the Pentagon's private basement brothel has this much security. Ridiculous. They must have had a sociopath toddler do their programming, without the aid of a keyboard.
 
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Jeff7

Jeff7

Lifer
Jan 4, 2001
41,596
20
81
Jumpem said:
A six-month emergency fund is necessary for everyone that is not a child living at home. $50k may be high, or low, but he point is valid.
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Cost of living definitely appears to have some vast variations, as do personal expenses. :)
 
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phenomkid7

Banned
Nov 17, 2012
38
0
0
Don't try to invest in a volatile market that tracks sideways..you will lose your money.

Just invest in the "junk" T-Bills, or just keep cash under the mattress, anything is better than getting greeedy and losing money you need to feed yourself.
 
C

Corporate Thug

Lifer
Apr 17, 2003
37,622
0
76
Jumpem said:
A six-month emergency fund is necessary for everyone that is not a child living at home. $50k may be high, or low, but he point is valid.
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The point is not valid. The statement was not to have an emergency fund...it was save 50k in an emergency fund. The smarter approach would be to set up a sufficient amount for your 6 months and invest the rest rather than lose money on it when it sits in a 50k emergency fund that you will not be using.
 
brianmanahan

brianmanahan

Lifer
Sep 2, 2006
24,634
6,014
136
Jeff7 said:
And TreasuryDirect has some really convoluted security measures.
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its not as bad now as it was when they would mail you that little plastic card with the codes on it required for login

felt like it was DRM on a freaking 80s computer game
 
U

unokitty

Diamond Member
Jan 5, 2012
3,346
1
0
skeedo said:
I have a significant balance in my savings account, and it's sitting there collecting more dust than interest. I'd like to put the money to work and generate some cash, potentially low risk or risk free.

I've considered the stock market, however I don't feel like dealing with the associated stress. My brother recently made some money with stock options but said he had to constantly keep an eye on it and was always stressing over whether or not to sell the option contract. I can't say I've had much experience in the stock market either.

Any suggestions on how to put my money to work would be great.
Click to expand...

An easy way to approach the stock market would be to go with any of the Dividend Aristocrats. Typically, these are for people that want to park some money for an extended period of time and minimize the cost and expense of managing it.

For example, with a DRIP, your dividend can be automatically reinvested in the stock. Often times, you don't have to pay a broker. So the ongoing cost is very low. (Note, dividends are taxable.)

While there is still some risk, if you want a better yield that a CD, I suspect that you will need to tolerate some risk.

Best of luck,
Uno
 
D

DaWhim

Lifer
Feb 3, 2003
12,985
1
81
i can only tell you the first rule of investing is KISS, keep it simple, stupid.

i never get the people who invest in things they dont know.
 
E

Exterous

Super Moderator
Jun 20, 2006
20,569
3,762
126
phenomkid7 said:
or just keep cash under the mattress, anything is better than getting greeedy and losing money you need to feed yourself.
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You realize that by just keeping cash under the mattress you are losing the purchasing power of that money right? Thats pretty analogous to losing money
 
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