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Where can I invest my money and not be able to access it for approximately 1 year?
- Thread starter k3n
- Start date
401k is the answer. I don't know why you have an issue with bubbles bursting. Put money in there, ride it out, and you will retire comfortably. If you can't do this, I think your trouble is with the concept of long term investing.
There are a lot of conflicting messages in your post. I suggest you do some reading at bogleheads.org
There are a lot of conflicting messages in your post. I suggest you do some reading at bogleheads.org
Bateluer
Lifer
This. 401Ks, IRAs, Roth IRAs, and mutual funds are excellent long term investments. Even with a 'bubble' bursts, these funds are usually well diversified to handle that. So long as you don't panic and withdraw all your money when it dips during bad years, you will be able to ride out the bad times pretty easily.
postmortemIA
Diamond Member
no risk? bonds, federal, state, local, money market, CDs, etc
something that beats inflation? what Yossarian & Bateluer said.
And read here recommended booklet "If I can"
something that beats inflation? what Yossarian & Bateluer said.
And read here recommended booklet "If I can"
OverVolt
Lifer
Dividend stocks? Bonds?
Bonds are not zero risk, there is the risk of default silly. There are municipal bonds (Hellooo Detroit) and I think even colleges sell bonds (not immune to the college bubble eh?)
There is risk in everything. Everyone piled into stocks for a reason. It won't end well when they pull it back out of course once they are all done putting as much as they can into stocks, but you know, shit happens. Its a market of stocks vs its a stock market mentality. Buy large cap stocks with low proportion of institutional buyers or something.
Bonds are not zero risk, there is the risk of default silly. There are municipal bonds (Hellooo Detroit) and I think even colleges sell bonds (not immune to the college bubble eh?)
There is risk in everything. Everyone piled into stocks for a reason. It won't end well when they pull it back out of course once they are all done putting as much as they can into stocks, but you know, shit happens. Its a market of stocks vs its a stock market mentality. Buy large cap stocks with low proportion of institutional buyers or something.
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Hacp
Lifer
If you want to invest in China, open a roth ira/ira brokerage account. Here are the ETFs that focus on China
http://etfdb.com/type/region/emerging-asia-pacific/china/
http://etfdb.com/type/region/emerging-asia-pacific/china/
The first link is so mindbogglingly stupid I had to turn it off after 2 minutes. First of all it's confusing stock options with 401k's and then it rips on matching contributions because it supposedly all gets siphoned away by fees.
The second link kind of glosses over the fact that those trillions lost were also gained in the previous few years leading to the crash, the two minute mark graph of the lady's 401k kind of shows that. The only people truly hurt were those that bought over the last couple years prior to the crash.
If you are lucky enough to have employer matching 401k plans they are the best non-gambling option. They provide an absolute guaranteed return with the match and then you could just stick your money in a money market if you want to be hyper conservative. If you don't have employer matching contribution and your employer funds are all high fee then pursue IRA/Roth IRA, and/or lobby your employer for low fee ETF's to be added to the 401k pool.
It's fairly straightforward, no corrupt wall street conspiracy required.
brianmanahan
Lifer
Buy I bonds from the us treasury, you won't be allowed to sell them for one year. They can't decrease in price but don't return much over inflation. Good for keeping money safe though. Oh and you can only buy 10$k worth per year.
KB
Diamond Member
You mention China as a good location for investment and you mention a 60 minutes segment on how bad 401ks are, but I think you need to review this 60 minutes segment on China:
http://www.cbsnews.com/videos/chinas-real-estate-bubble/
rsbennett00
Senior member
My 401k from my last job was basically theft. It was written so that I cannot get to the money until I either die or retire in 32 years. It was mandatory and I couldn't even take a loan against it. I highly doubt it will still exist in 32 years so I consider it gone. Dying doesn't do me much good. I'd never invest in another 401anything.
ajskydiver
Golden Member
You can't rollover somewhere else?
I'm pretty sure you can pull your money out if you're willing to pay a huge penalty and taxes on the money; unless it's to buy a home and I think one or two more exceptions.
But I'm sure you actually checked into it and already know that...
DaveSimmons
Elite Member
Nope. Your employer HAS TO let you cash out or roll over a 401k to an IRA when you leave the company. They can't "write something" to stop you from doing this. You can get the money if you really want to pay the taxes and penalty.
To k3n:
A Roth IRA is after-tax contributions so you can take out your original contributions before retirement without paying new taxes or penalties.
A 401k is a good deal if you have employer matching. Even if it has bad funds with 2% expense ratios the 50% - 100% matching up front and the income tax savings put you way ahead of the fees. When you change jobs you roll it over to a Traditional IRA at Schwab, Vanguard, etc. and put it into low-expense stock funds.
Not if you don't panic. All of my funds that I held on to during the housing crash recovered after a couple of years. I lost nothing. And the 401k contributions and stock fund purchases I made during the crash both made huge gains.
Gunslinger08
Lifer
Educate yourself about the difference between investment account types and investment vehicle types.
Account type = Basically the tax status of the account.
- Traditional 401k or IRA = No taxes now, no taxes during growth, taxed as income at withdrawal. 401k is typically offered by your employer and may include a match. Not contributing enough to get this match is a very bad decision. You are essentially throwing away an immediate ("free") return on your investment.
- Roth 401k or IRA = Taxed now, no taxes during growth, no taxes at withdrawal.
- Taxable account = Taxed now, maybe taxed during growth, taxed on profits at withdrawal, gets complicated.
You get some pretty good tax advantages from both a 401k/traditional IRA and a Roth. This means you have more money at retirement than you would in normal taxable accounts.
Vehicle type = The thing you are investing in. There are A LOT. These are the big ones that normal folks invest in.
- Stocks = Partial ownership of a company. Could be a domestic company or international company. Prices will fluctuate for a large number of reasons, but the biggest indicator is the financial health of the company.
- Bonds = Basically lending money to an organization for a period of time, with an agreed upon interest rate. Prices will fluctuate based on changes in the "going" interest rates on new bonds and the credit worthiness (financial health) of the issuing organization.
- Mutual Funds = Basically a holding of any other investment type. Typically diversified to limit risk, but potentially narrowed to a single market segment or risk tolerance.
- REITs = Basically buying and selling mortgages.
- CDs = Give a bank your money for a determined amount of time and you get $x extra back. Affected by interest rates.
- Gold/Silver = You know what this is.
The type of account you choose really doesn't limit which vehicle types you can invest in - though you aren't going to invest in a CD through your 401k/IRA. The generally recommended "best practice" for investing is: http://i.imgur.com/PWfvdvB.png
1. Build your savings so you don't go bankrupt if you lose your job.
2. Contribute to your 401k to get the maximum employer match.
3. Pay off your debts. Start with your highest interest debts.
4. Fund your Roth IRA to the max allowed.
5. Fund your 401k to the max allowed.
6. Invest/save in taxable accounts.
When selecting the investments you want in these accounts, you need to consider your risk tolerance, your time horizon for needing the money, and the expenses related to the investments.
The general rule of thumb is that young people can be more risky with investments. We still have 30-40 years before retirement to make more money, if our investments depreciate. That higher risk is generally rewarded with higher returns, but we could also lose money. You see pretty risk averse, so it sounds like more stable investments would be appropriate. This would be something like bonds issued by highly regarded organizations. You can buy into bond mutual funds in almost any investment house, within any type of account (401k, Roth, taxable). Vanguard is a favorite of mine that offers very low expense ratios, meaning you lose less of your money to expenses each year than some of the other big names.
Account type = Basically the tax status of the account.
- Traditional 401k or IRA = No taxes now, no taxes during growth, taxed as income at withdrawal. 401k is typically offered by your employer and may include a match. Not contributing enough to get this match is a very bad decision. You are essentially throwing away an immediate ("free") return on your investment.
- Roth 401k or IRA = Taxed now, no taxes during growth, no taxes at withdrawal.
- Taxable account = Taxed now, maybe taxed during growth, taxed on profits at withdrawal, gets complicated.
You get some pretty good tax advantages from both a 401k/traditional IRA and a Roth. This means you have more money at retirement than you would in normal taxable accounts.
Vehicle type = The thing you are investing in. There are A LOT. These are the big ones that normal folks invest in.
- Stocks = Partial ownership of a company. Could be a domestic company or international company. Prices will fluctuate for a large number of reasons, but the biggest indicator is the financial health of the company.
- Bonds = Basically lending money to an organization for a period of time, with an agreed upon interest rate. Prices will fluctuate based on changes in the "going" interest rates on new bonds and the credit worthiness (financial health) of the issuing organization.
- Mutual Funds = Basically a holding of any other investment type. Typically diversified to limit risk, but potentially narrowed to a single market segment or risk tolerance.
- REITs = Basically buying and selling mortgages.
- CDs = Give a bank your money for a determined amount of time and you get $x extra back. Affected by interest rates.
- Gold/Silver = You know what this is.
The type of account you choose really doesn't limit which vehicle types you can invest in - though you aren't going to invest in a CD through your 401k/IRA. The generally recommended "best practice" for investing is: http://i.imgur.com/PWfvdvB.png
1. Build your savings so you don't go bankrupt if you lose your job.
2. Contribute to your 401k to get the maximum employer match.
3. Pay off your debts. Start with your highest interest debts.
4. Fund your Roth IRA to the max allowed.
5. Fund your 401k to the max allowed.
6. Invest/save in taxable accounts.
When selecting the investments you want in these accounts, you need to consider your risk tolerance, your time horizon for needing the money, and the expenses related to the investments.
The general rule of thumb is that young people can be more risky with investments. We still have 30-40 years before retirement to make more money, if our investments depreciate. That higher risk is generally rewarded with higher returns, but we could also lose money. You see pretty risk averse, so it sounds like more stable investments would be appropriate. This would be something like bonds issued by highly regarded organizations. You can buy into bond mutual funds in almost any investment house, within any type of account (401k, Roth, taxable). Vanguard is a favorite of mine that offers very low expense ratios, meaning you lose less of your money to expenses each year than some of the other big names.
Bitcoin, no seriously Dogecoin
But seriously there is risk in everything. With cash there is risk of inflation, government default, etc. The risk is low but there is risk.
If you really need the money in 1 year and it's less than say $250K or so, just put it in a CD.
If you can ride out the swings and your timeframe is long term just throw it in an index fund and don't look at it. Something like SPY or VTI is good.
But seriously there is risk in everything. With cash there is risk of inflation, government default, etc. The risk is low but there is risk.
If you really need the money in 1 year and it's less than say $250K or so, just put it in a CD.
If you can ride out the swings and your timeframe is long term just throw it in an index fund and don't look at it. Something like SPY or VTI is good.
Rakehellion
Lifer
Universal Life Insurance policy.
Schfifty Five
Lifer
I'm fairly certain you can take a distribution at any time (though you will get hit with fees). I don't think it's legal for them to hold your money w/o having an option for a distribution.
Now not having loan options is permitted, depending on how the Plan is setup.
brianmanahan
Lifer
it used to be you could do that, but now i think they are only sold on treasurydirect.com (or as an option for your tax refund up to 5$k).
setting up an account on treasurydirect is pretty easy, certainly much easier than it used to be.
just be aware that i-bonds will keep up with inflation, but not really any more than that (except for the current premium of %0.1). so returns would probably be around %2-3. still, the guarantee to not lose money and do a little better than inflation is decent enough for me to put as much as i can in there. it's quite a bit better than a savings account.
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