WHAT'S NEXT AFTER A HIGH INTEREST SAVINGS ACCOUNT
01-13-2007, 07:56 PM
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WHAT'S NEXT AFTER A HIGH INTEREST SAVINGS ACCOUNT
So what's next after opening a high interest saving account ( I.N.G direct, Emrigant direct, ect.) I'm a bit new to investing and was wondering what's the next step.
Thanks
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01-13-2007, 09:57 PM
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Depends how much funds you have you can either put it in a high yielding CD or invest it in stocks. But make sure have some knowledge before trading in the stock market because its very volatile.
01-13-2007, 11:01 PM
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Questions to ask yourself:
What are your goals - what sort of return do you expect?
What is your tolerance for risk - how old are you and can you make back any losses?
What sort of investment is this - retirement or disposable income?
How much work are you prepared to put in managing it - do you want someone else to manage the investment or are you willing to do the work yourself?
How much money are we talking about?
These are all essential questions. Until you answer them you can't get clear guidance.
A savings account (high interest or otherwise) is not so much an investment as a place to store cash you need immediately on-hand without it losing any value. Money stored in your mattress loses value at a rate of 2 - 2.5% annually due to inflation (it sinks). A savings account is like treading water (you don't sink but you aren't swimming either). The only valid reason to store money away in a savings account is if it's absolutely essential it not lose value and that it be immediately available, a down payment on a house you are shopping for?
If you absolutely can't lose any but don't need it until sometime in the future you can look at CDs or other guaranteed investment certificates or government bonds. They will get you more interest but have fixed appreciation dates or can take time to liquidate.
Money Market accounts offer a touch more interest than CD or bonds but at the cost of some slight risk, the upside being the cash remains liquid and easy to cash out.
Beyond that there are a wide range of options with varying levels of risk and return but you can't consider those until you answer the questions above in a brutally honest way. Be honest and truthful in answering those questions and then I can offer my thoughts on some investments that might suit you.
What are your goals - what sort of return do you expect?
What is your tolerance for risk - how old are you and can you make back any losses?
What sort of investment is this - retirement or disposable income?
How much work are you prepared to put in managing it - do you want someone else to manage the investment or are you willing to do the work yourself?
How much money are we talking about?
These are all essential questions. Until you answer them you can't get clear guidance.
A savings account (high interest or otherwise) is not so much an investment as a place to store cash you need immediately on-hand without it losing any value. Money stored in your mattress loses value at a rate of 2 - 2.5% annually due to inflation (it sinks). A savings account is like treading water (you don't sink but you aren't swimming either). The only valid reason to store money away in a savings account is if it's absolutely essential it not lose value and that it be immediately available, a down payment on a house you are shopping for?
If you absolutely can't lose any but don't need it until sometime in the future you can look at CDs or other guaranteed investment certificates or government bonds. They will get you more interest but have fixed appreciation dates or can take time to liquidate.
Money Market accounts offer a touch more interest than CD or bonds but at the cost of some slight risk, the upside being the cash remains liquid and easy to cash out.
Beyond that there are a wide range of options with varying levels of risk and return but you can't consider those until you answer the questions above in a brutally honest way. Be honest and truthful in answering those questions and then I can offer my thoughts on some investments that might suit you.
01-14-2007, 08:53 AM
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Originally Posted by cthree,Jan 14 2007, 12:01 AM
Questions to ask yourself:
What are your goals - what sort of return do you expect?
What is your tolerance for risk - how old are you and can you make back any losses?
What sort of investment is this - retirement or disposable income?
How much work are you prepared to put in managing it - do you want someone else to manage the investment or are you willing to do the work yourself?
How much money are we talking about?
Beyond that there are a wide range of options with varying levels of risk and return but you can't consider those until you answer the questions above in a brutally honest way. Be honest and truthful in answering those questions and then I can offer my thoughts on some investments that might suit you.
What are your goals - what sort of return do you expect?
What is your tolerance for risk - how old are you and can you make back any losses?
What sort of investment is this - retirement or disposable income?
How much work are you prepared to put in managing it - do you want someone else to manage the investment or are you willing to do the work yourself?
How much money are we talking about?
Beyond that there are a wide range of options with varying levels of risk and return but you can't consider those until you answer the questions above in a brutally honest way. Be honest and truthful in answering those questions and then I can offer my thoughts on some investments that might suit you.
as for money it's only about $6000. but it's the most i'v ever had at one time. i dont want to look back and be like "what did i do with that money!"
thank you for your help. i have seen you answer questions before. very helpful.
01-15-2007, 10:59 AM
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cthree you know your stuff really well. I enjoy reading all of your input on this board.
I think the answer to your question is either money market mutual funds (around 5%), which is different from money market savings accounts.
If you like, you can opt with simple T-Bills = 4.93 % for 3 month maturity
Someone also mentioned a high yielding CD, but make sure you don't need your money anytime soon if you go with a longer time period. With T-bills, you can sell the bills in the secondary market. Very deep market!
I think the answer to your question is either money market mutual funds (around 5%), which is different from money market savings accounts.
If you like, you can opt with simple T-Bills = 4.93 % for 3 month maturity
Someone also mentioned a high yielding CD, but make sure you don't need your money anytime soon if you go with a longer time period. With T-bills, you can sell the bills in the secondary market. Very deep market!
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01-18-2007, 08:09 AM
#8
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Originally Posted by s2khondaimport,Jan 15 2007, 02:59 PM
cthree you know your stuff really well. I enjoy reading all of your input on this board.
I think the answer to your question is either money market mutual funds (around 5%), which is different from money market savings accounts.
If you like, you can opt with simple T-Bills = 4.93 % for 3 month maturity
Someone also mentioned a high yielding CD, but make sure you don't need your money anytime soon if you go with a longer time period. With T-bills, you can sell the bills in the secondary market. Very deep market!
I think the answer to your question is either money market mutual funds (around 5%), which is different from money market savings accounts.
If you like, you can opt with simple T-Bills = 4.93 % for 3 month maturity
Someone also mentioned a high yielding CD, but make sure you don't need your money anytime soon if you go with a longer time period. With T-bills, you can sell the bills in the secondary market. Very deep market!
If I say something then consider it suspect until you can find corroborating evidence 
Money market savings accounts are backed by a MM fund. When you deposit money into a MMSA you are buying units of the backing fund and when you withdraw you are redeeming them. It all automated so to you it looks like a normal bank account but it's not really.
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