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I have $10,000 and want to save for a house. ADVICE

P

PawNtheSandman

Senior member
Ok I sold something that I had that was worth decent money. It is something that can always be replaced. Anyway, I won't be making anything decent for a salary for another 2-3 years. But I would like to do something with the 10g now that way I have more in a few years when I want to buy a house.

Other than just putting it in a savings account, what other safe, risk free alternatives are there?
 
If you don't need it for 2-3 years, probably the highest risk-free alternative is to buy a CD. Otherwise, you're better off investing in an index, or ETF. There are tons of ETFs now, and they're likely to give you much higher returns than a CD.
 
Sadly, nothing *largely* significant. CD's or money market accounts would be your only safe bets. CD's are around 3.5%-3.75% for a 36 month vestment.
 
Originally posted by: Legendary
Think investments - mutual funds and the like.
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He said safe. There's nothing safe about a mutal fund. Especially with the time frame he is looking at saving for.
 
Originally posted by: vi_edit
Originally posted by: Legendary
Think investments - mutual funds and the like.
Click to expand...

He said safe. There's nothing safe about a mutal fund. Especially with the time frame he is looking at saving for.
Click to expand...

Not true. Some of the mutual fund has very little risk. If you are willing to do the research.

Municipal bonds fund for example. Tax exempt, literally risk free.
 
It depend on where you live. If the value of the real estate in your area goes up every 20% every year. You are better off getting the house NOW.
 
Not true. Some of the mutual fund has very little risk. If you are willing to do the research.
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And low risk typically means jack squat return. Plus you have possible management fees.

Not saying they don't exist, just that given his wants and situation he's best off just locking it away in a CD.
 
DISCLAIMER: I am not a trained money manager or whatever, just suggesting what I think is good. No liability assumed for the use of my advice.

I think that while it may not be risk-free, the stock market could work to your advantage. Don't go all in. Say half of what you have or what you feel comfortable with, and put the other in something more secure. Companies that have been around for a while (a few years minimum I think) that are just in a slump. If you have a few years, you may be able to watch them grow back to what they were with a substantial profit for you. The only problem may be that they go under, so be sure you choose one that has good potential. Don't just go for one, spread the wealth.

I think that investing in a small startup company might be something fun to do, and something that may pay out well.

Other than that, I can't think of anything that'll make you a lot of money investing. No risk is little reward. Risk is big reward, but potential of failure. I hate to say it, but if you want a house... get a trailer! You get a little house, and you get a nice community and no messy investments. Watching too much Trailer Park Boys...
 
Originally posted by: vi_edit
Not true. Some of the mutual fund has very little risk. If you are willing to do the research.
Click to expand...

And low risk typically means jack squat return. Plus you have possible management fees.

Not saying they don't exist, just that given his wants and situation he's best off just locking it away in a CD.
Click to expand...


Buying CD only match inflation rate. After tax, you earn jack squat compare to municipal bond fund.

CD yield about 3% while municpal bond fund yield about 10%. Some of them are tax exempt. You end up paying 1-2% fee. You still win over CD
 
I live in New York. Everything is overpriced/inflated here.

I do not want to play the stock market. Too time consuming. You don't make money by buying and waiting.

I was thinking more along the line of mutual fund, cd, money market account etc.
 
Originally posted by: LoKe
Bonds?
You can get a really high per centage if you put your money in bonds and don't cash them for at least a year.
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Mind mentioning a bond with a high percentage?
 
Originally posted by: jadinolf
Originally posted by: LoKe
Bonds?
You can get a really high per centage if you put your money in bonds and don't cash them for at least a year.
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Mind mentioning a bond with a high percentage?
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No joke. I'd like to know, too. Especially really high percentage bonds that would be available with only $10,000 to invest.

 
I honestly wanted to get in during the IPO of Google but didn't have the money at the time.

I kick myself in the ass every day for that.
 
I would say stick with something guaranteed. Even if you only get 4-5% or something at least you have the money. Though why don't you buy your house now, that would probably be the best investment.
 
Originally posted by: Kenazo
I would say stick with something guaranteed. Even if you only get 4-5% or something at least you have the money. Though why don't you buy your house now, that would probably be the best investment.
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well... he did say " I won't be making anything decent for a salary for another 2-3 years." and trying to buy a house in ny doesn't exactly help either.

 
Don't put it in mutual funds!

<-- lost $10k, and missed an opportunity to be in a house two years ago when the market was almost sane 🙁
 
Originally posted by: akubi
Originally posted by: Kenazo
I would say stick with something guaranteed. Even if you only get 4-5% or something at least you have the money. Though why don't you buy your house now, that would probably be the best investment.
Click to expand...

well... he did say " I won't be making anything decent for a salary for another 2-3 years." and trying to buy a house in ny doesn't exactly help either.
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Yeah, I guess the houses there are probably a lot higher than here. 🙂

my wife and I just moved into our 1100sq ft house w/ a finished basement for $120k Cdn, with a double lot with mature trees. 😀

He may not be making a decent salary now, but he still might be better off buying now. Interest rates are quite low, and it's probably safe to presume that the house will be appreciating at a rate higher than most other short term investments. If he can swing the payments, I'd still suggest buying now.
 
If you want to be stress-free, just stick it in a money market, CD or even an ING Orange account. If you're looking for a little higher risk but possibly double the return, investigate some of these.. They are mostly short to intermediate term NY muni bond funds. Look for one that suits your needs (i.e. average to below average risk, no-load, etc). While most of these funds will never hit double digit returns, they will mostly not lose you more than 2-3% a year either. Some of the more dependable ones will get you 7-8% tax free a year. Of course, there's the disclaimer that past performance is no indicator of future results. 😉

EDIT: Of course, what you do all depends on what your time horizon is (i.e. what is the "few" years you mentioned in the OP?). BTW, the above tax-free part assumes that you live in NY, which I believe that you mentioned you do.
 
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