How do you invest your savings?

[residualsquare]

Please include your age, or, if you would prefer, an age range.

As for myself, I pretty much just toss most of it into a S&P tracking fund; also have some of it invested in derivative vehicles, individual stocks, and some cash in an HSBC online account. I realize I should be taking advantage of the fact that I'm still relatively young (late 20s) and single, but I simply don't have the time to manage a proper portfolio.

 

[chin311]

i have very little, (5k)

but i just have it in standard 5% savings and my checking account accumulates 2.25% a month if the balance is over 2500$

 

[Gunslinger08]

HSBC. I'm saving to buy a house, so I need my money to be fairly liquid.

 

[Mxylplyx]

27 and married, and just climbed out of all non-house debt this year, including cars. I'm pouring everything into an online savings account (5.25%) right now. Once I hit about 20K savings, I'll start diverting it into investments, which is something I havent done up to this point.

 

[AmpedSilence]

25, single

have everything that i save in ING right now, opening up a sharebuilder account in a week or so since i have hit my savings goal (like above poster).

Then goes as follows... 10% of income into 401k/IRA, 10% into Sharebuilder, 10% into ING.

The rest of my income is for spending.

 

[K1052]

25, single

401K (8% + company matching) - S&P index, REITs, Utilities, and International funds.

Sharebuilder account - Exchange Traded Funds exclusively (pretty diverse across materials, stock indexes, energy, emerging markets). I use this solely to accumulate these funds due to the very low transaction cost.

ING - for cash reserve and annual property tax savings

Physical precious metals - silver and gold (I don't but a lot but its nice to have on hand)

 

[johnjbruin]

Age: Mid 20s

All savings other than liquid emergency cash assets in various Index tracking funds or ETFs

 

[Descartes]

27.

~50% into qualified accounts. That includes a SEP IRA and other things.
~35% into non-qualified accounts. Most of this goes into mutual funds, some individual stocks and real estate holdings.
~15% is cash.

 

[dullard]

I have a diverse set of 5 low fee mutual funds (US large growth, US large value, US small growth/value, international large, international small) and 1 bond fund.

Then I put a lot into my house at a 6% return. Why? I know that I could potentially do better in stocks, but my house loan was from my parents and I really don't want to borrow money from family. Plus, with stocks doing poorly now (and I predict that they'll fall another 10% before they really start to rise) a guaranteed 6% return isn't bad. I'll have my first house paid off after owning it for just 9 years. After that, I'll dump my extra money into a fund of micro-sized stocks and finally, I'll look at small amounts of commodities.

While I might not be mathematically maximizing my return (due to a bond fund and owning my house outright by my lower 30s), I'll be the happiest this way. There is just something to be said about having a nice large house (significantly over the average size/quality), a good reliable car, and no debt at all before the age of 35. I could lose/quit my job for several years and still be sitting comfortably. How many people can say that at such a young age? No stress and no worries trumps making a couple percent more on a small amount of my investments.

 

[residualsquare]

Originally posted by: dullard
and I predict that they'll fall another 10% before they really start to rise

I don't think the Fed would let the market plunge the economy into a full-fledged recession. If the market fell another 10% we would really be in trouble.

 

[Mxylplyx]

Originally posted by: residualsquare

Originally posted by: dullard
and I predict that they'll fall another 10% before they really start to rise

I don't think the Fed would let the market plunge the economy into a full-fledged recession. If the market fell another 10% we would really be in trouble.

It's happened before. It'll happen again.

 

[Mxylplyx]

Originally posted by: dullard
I have a diverse set of 5 low fee mutual funds (US large growth, US large value, US small growth/value, international large, international small) and 1 bond fund.

Then I put a lot into my house at a 6% return. Why? I know that I could potentially do better in stocks, but my house loan was from my parents and I really don't want to borrow money from family. Plus, with stocks doing poorly now (and I predict that they'll fall another 10% before they really start to rise) a guaranteed 6% return isn't bad. I'll have my first house paid off after owning it for just 9 years. After that, I'll dump my extra money into a fund of micro-sized stocks and finally, I'll look at small amounts of commodities.

While I might not be mathematically maximizing my return (due to a bond fund and owning my house outright by my lower 30s), I'll be the happiest this way. There is just something to be said about having a nice large house (significantly over the average size/quality), a good reliable car, and no debt at all before the age of 35. I could lose/quit my job for several years and still be sitting comfortably. How many people can say that at such a young age? No stress and no worries trumps making a couple percent more on a small amount of my investments.

single?

 

[residualsquare]

Originally posted by: Mxylplyx

Originally posted by: residualsquare

Originally posted by: dullard
and I predict that they'll fall another 10% before they really start to rise

I don't think the Fed would let the market plunge the economy into a full-fledged recession. If the market fell another 10% we would really be in trouble.

It's happened before. It'll happen again.

A drop of 20% resulting from such a trivial part of the market as subprime mortgages would not bode well at all for the future of our economy. Why do you say it will happen again?

 

[dullard]

Originally posted by: residualsquare

Originally posted by: dullard
and I predict that they'll fall another 10% before they really start to rise

I don't think the Fed would let the market plunge the economy into a full-fledged recession. If the market fell another 10% we would really be in trouble.

You never know what will happen, that is just my estimation on the probable outcome.

Remember, the fed's #1 goal is to control inflation. Their #1 goal is NOT to prevent recessions (common myth). Preventing recessions is #2 or #3 on thier list of priorities. The Fed would rather see a recession with low inflation than to stabilize the economy if that meant high inflation.

The S&P was at ~1555. Yesterday it was ~1490. 10% lower from 1490 would be 1340. A couple weeks back it was 1370. I don't think going to 1340 is that big of a stretch of the imagination. It wouldn't be that far lower than it was just a couple weeks ago. If the market reaches that low, I'll temporarilly dump a few thousand dollars more into it and not into my house. Note: I am still contributing to my mutual funds monthly, that will just be in addition to what I'm currently doing.

Originally posted by: Mxylplyx
single?

Divorced. I got divorced 2 years ago. That really put a damper on my plans. I was to have the house paid off in 7-8 years of owning it. But a lot of my money is currently going to her (I get to stop paying in November this year, yeah!) But it was cheaper to pay alimony than to fight her in court even though I would have won (she was the one doing the cheating, with proof).

 

[homercles337]

Invest? Savings? Ha! Scientists in academic areas dont get paid enough to worry about such things.

 

[dullard]

Originally posted by: residualsquare
A drop of 20% resulting from such a trivial part of the market as subprime mortgages would not bode well at all for the future of our economy. Why do you say it will happen again?

I think you are underestimating the role of housing on the economy. Housing is about 25% of the total US economy. If housing drops 10%, the whole economy drops 2.5%. This includes home owners having less money to spend, employees earning less (real estate agents, mortgage brokers, etc), and companies earning less (home depot the #2 company in the US is already hurting badly).

And the problem isn't just subprime mortgages. The bigger problem is jumbo mortgages. Those people with houses worth $417k+ are really getting bit harder.

 

[Elbryn]

we're in a similar situation as dullard for the most part. we have multiple retirement accounts that are split into international, bond, large, and small cap funds with low expense rates. we're looking to pay our house off (6.75% but not refinancing unless i can get at least a point differential, otherwise not worth the cost of a refi) we want to pay the house off in the next few years so the risk on that money is lower. The goal being having less monthly costs when we have kids on one income. we've opted for a tier system, 1st tier- combination 3,4,5 year 6.25% cds, 2nd- 1 year emergency fund in fed/state tax exempt money market, 3rd- a 60/40 income fund. we've also choosen not to prepay the house with our money until we get the big lump settlement for the house to keep flexibility, not a min max formula but its what we're comfortable with.

 

[Mxylplyx]

Originally posted by: dullard

Originally posted by: residualsquare

Originally posted by: dullard
and I predict that they'll fall another 10% before they really start to rise

I don't think the Fed would let the market plunge the economy into a full-fledged recession. If the market fell another 10% we would really be in trouble.

You never know what will happen, that is just my estimation on the probable outcome.

Remember, the fed's #1 goal is to control inflation. Their #1 goal is NOT to prevent recessions (common myth). Preventing recessions is #2 or #3 on thier list of priorities. The Fed would rather see a recession with low inflation than to stabilize the economy if that meant high inflation.

The S&P was at ~1555. Yesterday it was ~1490. 10% lower from 1490 would be 1340. A couple weeks back it was 1370. I don't think going to 1340 is that big of a stretch of the imagination. It wouldn't be that far lower than it was just a couple weeks ago. If the market reaches that low, I'll temporarilly dump a few thousand dollars more into it and not into my house. Note: I am still contributing to my mutual funds monthly, that will just be in addition to what I'm currently doing.

Originally posted by: Mxylplyx
single?

Divorced. I got divorced 2 years ago. That really put a damper on my plans. I was to have the house paid off in 7-8 years of owning it. But a lot of my money is currently going to her (I get to stop paying in November this year, yeah!) But it was cheaper to pay alimony than to fight her in court even though I would have won (she was the one doing the cheating, with proof).

that bitch!!

 

[residualsquare]

Originally posted by: dullard

Originally posted by: residualsquare

Originally posted by: dullard
and I predict that they'll fall another 10% before they really start to rise

I don't think the Fed would let the market plunge the economy into a full-fledged recession. If the market fell another 10% we would really be in trouble.

You never know what will happen, that is just my estimation on the probable outcome.

Remember, the fed's #1 goal is to control inflation. Their #1 goal is NOT to prevent recessions (common myth). Preventing recessions is #2 or #3 on thier list of priorities. The Fed would rather see a recession with low inflation than to stabilize the economy if that meant high inflation.

The Fed's primary goal is not just to limit inflation; if this were so, the oft-criticized bailing out, of sorts, of fund managers a few weeks ago would never have been an issue. The Fed is responsible for overseeing the economy as a whole, and often this involves potentially raising inflation for the sake of stabilizing markets.

Originally posted by: dullard

Originally posted by: residualsquare
A drop of 20% resulting from such a trivial part of the market as subprime mortgages would not bode well at all for the future of our economy. Why do you say it will happen again?

I think you are underestimating the role of housing on the economy. Housing is about 25% of the total US economy. If housing drops 10%, the whole economy drops 2.5%. This includes home owners having less money to spend, employees earning less (real estate agents, mortgage brokers, etc), and companies earning less (home depot the #2 company in the US is already hurting badly).

And the problem isn't just subprime mortgages. The bigger problem is jumbo mortgages. Those people with houses worth $417k+ are really getting bit harder.

Yes, the subprime situation has spurred reaction from other sectors (not least of which is the current credit crunch), but underlying all these subsequent reactions is the original mortgage crisis. The subprime market is a relatively small part of the MBS market as a whole, and an even smaller part of the overall economy. The problem is that seeing how new derivative trading vehicles are constantly being introduced, an impact of 20% from such a relatively young and insignificant trading product could spell disaster with increasing securitization and derivative trading. Many analysts have predicted that the current situation will subside by late September; we will see.

 

[maddogchen]

Age: 27

Goals: car 35k (1 year)
house downpayment 100k (3 years),
retirement ?

6% FNBO savings
5% WAMU savings + checking
2 Mutual Funds (International,US stock)

 

[LordSnailz]

Similar to some folks on the board -

Age: 28

max out the company's 401K and SPP
max out roth IRA contribution/year
50% goes to mortgage
the remaining goes to the sharebuilder account (REITS, international funds, emerging markets, stock indexes), ING and bofa checking. shameless plug for sharebuilder ... if you're planning on joining PM me, so we both get free shares

 

[erub]

Originally posted by: LordSnailz
Similar to some folks on the board -

Age: 28

max out the company's 401K and SPP
max out roth IRA contribution/year
50% goes to mortgage
the remaining goes to the sharebuilder account (REITS, international funds, emerging markets, stock indexes), ING and bofa checking. shameless plug for sharebuilder ... if you're planning on joining PM me, so we both get free shares

wow, that's quite impressive. You match out the 401K all the way to the fed max of 15.5K, or just up to the employer match? Youmust have a fairly large income (although not too large if you are still qualifying for the Roth IRA) and low expenses, props to you. What percentages of your income are into the 401k and SPP?

As for me, I'm still in graduate school at 23, but I've done a pretty good job getting my Roth IRA started (3 yrs contributions), and recently rolled over my 401k from my summer internships into the Roth while I'm at a low income. The rest of my ramen noodle fund is in ING/various checking accounts.

 

[Nerva]

Originally posted by: residualsquare
Please include your age, or, if you would prefer, an age range.

As for myself, I pretty much just toss most of it into a S&P tracking fund; also have some of it invested in derivative vehicles, individual stocks, and some cash in an HSBC online account. I realize I should be taking advantage of the fact that I'm still relatively young (late 20s) and single, but I simply don't have the time to manage a proper portfolio.

can you plow the money back into your own fund?

 

[bignateyk]

Hookers, Booze, and Lottery Tickets.

 

[residualsquare]

Originally posted by: 3cho

Originally posted by: residualsquare
Please include your age, or, if you would prefer, an age range.

As for myself, I pretty much just toss most of it into a S&P tracking fund; also have some of it invested in derivative vehicles, individual stocks, and some cash in an HSBC online account. I realize I should be taking advantage of the fact that I'm still relatively young (late 20s) and single, but I simply don't have the time to manage a proper portfolio.

can you plow the money back into your own fund?

Yes, and I do actually have a sizable sum invested in it that I neglected to mention. However, for the same reason that it is ill-advised to invest heavily in your own company's stock (performance incentives aside), I try to limit my exposure. That way, in case the firm tanks, I don't lose both my bonus and my savings.