spaceboy

I have an extra $5000~$8000 on the side which I personally dont think I will get a chance to spend them, i dont wanna put them in checking/saving account cuz either no interest or low interest, i am not a stock person either....
I am looking at some decent return while giving you the lowest risk....what would you guys recommend?

Professor

Well since you have a $3000 range you are not sure of, I'd suggest invest in Professor's Pyramid... if qualified, I'll turn your $8K cash into $6K, and since you think you invested $5K, you'll have $1K in profits.

Please Paypal.

Anachostic

FTYIX is giving me $30-$50/month on $8k.

JaredGMS

Do you have an IRA/401(k)? If not, start one, and then start giving a little every month.

If you already have a decent retirement account setup, and make decent money, go see a financial planner to figure out your best "overall" strategy to make your money last.

fuzzy02CLS

iTrader: (2)

I'd buy gold. Not low risk, but gold is tangible. A friend of mine is swimming in $ because his father bought him $25K worth of gold when it was $300!

spaceboy

i dont have retirement account yet and i am 29, how much is a little every month? wat do u think about money marketing account or stuff like Meryl Lynch??

JaredGMS

Not a bad idea - but I ALWAYS prefer my clients to start an IRS qualified account first - main reason - IF it so happens that you ever need a BK attorney, IRS qualified accounts are generally fully protected as an asset, while other types of investment funds are not.

AZuser

Start a Roth IRA and get in the habit of putting in at least $300 per month to save for your retirement.

It's not too late to start one and make your 2011 contribution. You have until April 17, 2012. Max IRA contribution is $5,000.

lilsid112

iTrader: (7)

A Roth IRA is something you should look into. Its great to contribute money every paycheck. The guy at the bank was surprised when I opened one up a couple of yrs ago due to my age. Also you could look into CD's at smaller banks since they give a bit more interest.

swoosh

iTrader: (5)

......in my account hahah

well if you gonna use it:
Couple savings account are giving you 0.75% to 1% APR....so you will make 80 bucks a year.....

if you not gonna use it:
CD's...will give you 1.25-1.5% APR

now these are sure profits and no risk...

you can put some money in an IRA account or invest in some stocks....check out google and apple stocks !!! they have gone up 3-4 times in the past 4-5 years....

aznboi2424

iTrader: (10)

IRA Roth FTW, the younger you start, the better. I think I maxed out my contributions the last 3 years. My accounting teacher convinced me to start. Then you can take the IRA contributions and put them into CDs or treasury bonds for no-risk investment. I also like no risk and I do CDs. Interest income earned from IRA contributions that go back into your IRA fund are not taxed at the end of the year and I don't think they are taxed when you take them out because the money you put in is already pre-taxed.
But interest rates are real low right now so I wouldn't lock yourself into anything super long like a 30 year bond.
I always hear from older people how they wished they would have started investing in their retirement when they were young because now they don't have enough to maintain their lifestyle after retirement.

GIBSON6594

If you are 29 without any retirement savings you better get that money into an IRA and start contributing stat.

subinf

Roth IRA would be my suggestion. CDs at this point have shit for return.

FiftyFive

Def IRA if you have no money saved for retirement yet.

justnspace

iTrader: (1)

Started a Roth IRA account on Saturday.
Thanks fellas.

JaredGMS

It will do you well for your future - good looking out, man.

swoosh

iTrader: (5)

^^^ yup if you dont have any deductibles its a good idea to open a Roth IRA

Justn, whatever $$$ you put in it, you can claim that in your 2011 taxes as its not April 17th yet....

justnspace

iTrader: (1)

Good looking out to Jared and Swoosh
Doing my taxes tonight and will claim the money i put in the ROTH

aznboi2424

iTrader: (10)

I thought you can't claim IRA contributions right? At least they did nothing for my tax return. I mean my bank issues a Form 5498 for my contributions and current markey value but it comes out in May and I was told that it's for informational purposes only.

justnspace

iTrader: (1)

^correct.
well, the way i understand it as well.

aznboi2424

iTrader: (10)

The money is pre-taxed already for the Roth

justnspace

iTrader: (1)

^right, but its used as informational purposes.

swoosh

iTrader: (5)

^^^ you can claim Roth contributions as a deductible....

so if you made (say) 74,000 for the year and you contributed 5,000 to IRA and if (say) the bracket is 70,000....you will come in a lower bracket !!!

aznboi2424

iTrader: (10)

Useful if your owe but won't bump your refund higher.

aznboi2424

iTrader: (10)

EDIT: Tax deductions for IRA contributions are only for a traditional IRA. For a Roth IRA, you cannot take deductions at this time but you can withdraw contributions tax free.
Basically if you don't need the tax deductions right now, place it into a Roth. If you make too much and owe uncle sam, you may look into a traditional IRA.

swoosh

iTrader: (5)

^^^ hahaha either way you are paying taxes....

either you pay before TDS or you will pay after....the only use of an IRA account is if you do not have any deductions....

Babnik

What do you put in a Roth IRA, stocks?

Babnik

I'd be careful with that type of logic, you're assuming that just because something has done well in the past, it will continue to do well in the future. Someone who bought gold or apple stock a few years ago made out very well. But there is no reason to believe you'll be as lucky if you buy it today. As an example, look at the real estate crash. In 2006 people were saying "I know a guy who bought a house a few years ago and now his house is worth 50% more so I'm gonna buy a house too and make a huge profit!" and then houses tanked and his house is worth half of what he paid.

There's a great quote from Warren Buffet: What the smart man does in the beginning, the fool does in the end.

aznboi2424

iTrader: (10)

Well in a regular IRA account, you pay taxes on the money you take out of the account when you retire. It's tax free withdraws on a Roth. Both are taxed from your pay check or uncle sam when you file taxes but I'm talking about when you actually need to withdraw from your IRA accounts.
So why go with a regular IRA instead of a Roth? Because you can use contributions in to the regular IRA as tax deductions. I'm receiving a tax refund so deductions are worthless for me so I went with a Roth.

Why else do you think there are 2 types of IRA accounts?

swoosh

iTrader: (5)

^^^ farrk em both....am going 401K

justnspace

iTrader: (1)

401k and Roth.

aznboi2424

iTrader: (10)

If I had the option of 401k, I would. Free money from your employer? Sign me up.

swoosh

iTrader: (5)

^^^ ahhhaha but you dont see it bro....

my wife's employer matches 15% (i think) and max contri per year is like 6K....so that is free 1000 bucks a year....

she has been contributing since 3 years....so technically she should have 21K in the 401K....barely 18K in there

i make more interest on that amount in my savings account which gives me 1% APR

Dr. Colorado

Yep, basically it comes down to what your tax situation is like this moment vs. what it will be when you start withdrawing from your retirement account. Keep in mind you can take a non-penalized withdrawal for purchase of your first home and IIRC in other catastrophic health situations. You can also borrow from your retirement plan and pay the interest to yourself in certain situations.

I started my Roth when I was still in med school. Last year, the federal government eliminated the ceiling on Roth conversion so I converted my entire IRA to Roth. Obviously, I had a large tax burden on the conversion but I had a couple investments with federal high technology tax credits that I used to offset the tax on the Roth conversion.

To me, it's a no brainer. I will likely practice another 30 years and to allow the principal, dividends, and appreciation of the Roth to accumulate tax free until I cash it out made more fiscal sense than investing pre-tax income into a traditional IRA at the moment despite being in the highest tax bracket. Obviously, everyone's financial situation varies.

For 2012, my financial team implemented a Defined Benefits plan which allows me to invest a much larger amount than a 401K. Sure, no one can predict what the value of your portfolio will be 30 years from now but you would like to think if you were diversified in a variety of holdings that you would make out okay. I am partial to mutual funds over individual stocks and have my DB with Fidelity funds and my personal investment portfolio with Vanguard. I also plan on getting some dividend returning investments this year in my DB, like P&G or Caterpillar or maybe even Pfizer although I'm sketchy about pharmaceutical companies.

It really is an excellent idea for you youngsters to be starting Roths.

AZuser

Probably getting charged a lot of commissions, administrative and management fees. It's something you should look into...

http://www.nytimes.com/2011/06/04/yo...s/04money.html

swoosh

iTrader: (5)

^^^ yeah i need to look into it....i dont know how she signed a deal....it was company offered so she did....well anyway, another thing on my to do list !!!

thanks for the link bro....

Will Y.

You know that the 401K is likely invested in securities or mutual funds, whose values fluctuate and can result in loss of principal, unlike a savings account?

swoosh

iTrader: (5)

^^^ yes....and hence i was telling her....

if i took that 18K and put it in my savings account which pays me 0.75-1% APR i would have made more in the past 2-3 years than she did in 401K....

icy2

It all depends on what your 401k is invested in. I chose the mix of investments for mine and was at 13.5% return on the ytd. My employer contributes a base amount every check then matches dollar for dollar up to 5%. Also I'm lucky to have an employer who has a pension plan that they fully fund(which i was surprised to find out not many places still have pensions). For me tho 401k and Roth is what I have and recommend to others.

Rockstar21

iTrader: (1)

my credit union gives 4% on savings accounts.. i'll split the interest with you after 5 years