Saving money, what are my investment options?

[apac]

I've gotten the first few paychecks from my first job out of college and, having lived on a college budget for several years, am making far more than I'll use on a day to day basis.
I'm 21 years old, and will be saving ~$1000-1500 every month. What are the best options for me right now, aside from my low interest savings account? While this would be for cash I wouldn't expect to use within a 6 month period, I am looking for the best short term (nice return in <1 year) option I can find.

 

[Canun]

Somebody on here had some links from fat wallet where they had money market accounts making up to 6% with no minimum deposit.

 

[thomsbrain]

high interest savings account until you have at least six months expenses saved. then start looking at funding an IRA or Roth IRA. that ought to eat most of your savings for nearly a year. you may also want to ear-mark a certain amount each month to go towards your next car and/or car maintenance.

 

[Phokus]

"Waffles... tasty tasty waffles!"

 

[JasonE4]

Save up at least 6 months of living expenses in a money market account before doing any other investing. Then contribute to retirement accounts (Roth/Traditional IRAs, 401k). Then you can get into mutual funds, stocks, real estate, and other investments.

 

[thegimp03]

Search for high interest savings accounts on this forum. I think the popular ones are Etrade, ING, etc. You can earn around 5%, and they're probably your best bet right now.

You can also put your money in CD accounts, but that will lock up the money for a certain amount of time (i.e. 6-12 months usually) and have penalties if you need your money in an emergency.

 

[yuppiejr]

First thing, If your employer offers a match on a 401k make sure you are taking advantage of the free money. Since it's before April 15th, fund up to $4000 into your 2006 Roth IRA and then start putting enough into this year's to hit the $5000 max. Put the rest into savings (HSBC has the 6% savings account) until you have a 3-6 month nest egg to cover expenses in case something unforeseen happens. I'd also make sure you've paid off any debt with an interest rate larger than 6-8% before investing.

As for the rest it depends on your risk tolerance. I don't pretend to have the time or experience to pick individual stocks so I'd go to Vanguard and look over their mutual fund offerings.

 

[tfinch2]

Black or Red

 

[mrzed]

"In America, first you get the sugar, then you get the power, then you get the women"

 

[BigJelly]

Originally posted by: yuppiejr
First thing, If your employer offers a match on a 401k make sure you are taking advantage of the free money. Since it's before April 15th, fund up to $4000 into your 2006 Roth IRA and then start putting enough into this year's to hit the $5000 max. Put the rest into savings (HSBC has the 6% savings account) until you have a 3-6 month nest egg to cover expenses in case something unforeseen happens. I'd also make sure you've paid off any debt with an interest rate larger than 6-8% before investing.

As for the rest it depends on your risk tolerance. I don't pretend to have the time or experience to pick individual stocks so I'd go to Vanguard and look over their mutual fund offerings.

Given what speaker Peloise (spl.) said about wanting to increase income tax rates get a Roth over traditional IRA. *not meant start a political flame war just tring to save his nest egg from the government*

Good point about getting the money in for 2006 IRA.

FYI 4k is the max this year and then it goes to 5k in 2008 unless I'm mistaken

 

[Elbryn]

Originally posted by: apac
I've gotten the first few paychecks from my first job out of college and, having lived on a college budget for several years, am making far more than I'll use on a day to day basis.
I'm 21 years old, and will be saving ~$1000-1500 every month. What are the best options for me right now, aside from my low interest savings account? While this would be for cash I wouldn't expect to use within a 6 month period, I am looking for the best short term (nice return in <1 year) option I can find.

with less than a year, you're best option is really the hsbc savings account. you might be able to find a promo cd rate of 6% but those are really you're two types of options for best returns under a year with no risk.
i wouldnt advise playing the stock/mutual fund game with a 1 year horizon.

 

[JS80]

AMD

 

[LegendKiller]

Originally posted by: JS80
AMD

You know better than that...

 

[ElFenix]

Originally posted by: JasonE4
Save up at least 6 months of living expenses in a money market account before doing any other investing. Then contribute to retirement accounts (Roth/Traditional IRAs, 401k). Then you can get into mutual funds, stocks, real estate, and other investments.

my strategy is 6 month CDs (or whatever interval's worth of expenses you save for). no, you can't get to the money immediately, but you can't waste it on something spur of the moment.

 

[MasonLuke]

Originally posted by: JasonE4
Save up at least 6 months of living expenses in a money market account before doing any other investing. Then contribute to retirement accounts (Roth/Traditional IRAs, 401k). Then you can get into mutual funds, stocks, real estate, and other investments.

:thumbsup: