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Old 06-07-2007, 03:53 PM #1
Highlow
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What to do with $400?

I have $400 soon to be about $550, my question is what to do with it. I really want a sound system for my car, and I also really want a nice digital camera, the thing is that I could live without them. My other option is to stick it in a bank and wait for interest to build up.

What should I do?
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Old 06-07-2007, 05:07 PM #2
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give it to me
we cant tell you how to spend your money, thats a descision you have to make yourself
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Old 06-07-2007, 05:44 PM #3
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Old 06-08-2007, 09:20 AM #4
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If you wanted to put it in a bank and wait for interest, you might have a couple thousand by the time you died.
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Old 06-08-2007, 04:10 PM #5
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You could buy an $1100 bond, but it wouldnt mature for around seven years.
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Old 06-08-2007, 07:09 PM #6
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I'm in the same situation, but I've set aside $2,000. I was going to go with a CD, but the interest rate hardly seems worth it. If I drop it into a 24 month CD with 4.85% APR compounded quarterly (what my CU offers), I will come out with $2,202.44. An alternative, is going with a 36 month CD @ 4.95% which would yield $2,318.07.

On a side note, can someone tell me if you can constantly add money to a CD or if the balance is locked when you start it?

Also, is it possible for my interest rate to change, positively or negatively, while I'm holding the CD?

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Old 06-08-2007, 07:21 PM #7
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Quote:
Originally Posted by phatphil View Post
On a side note, can someone tell me if you can constantly add money to a CD or if the balance is locked when you start it?
Yes you can add money to it. Those funds are going to be used in two different ways:

- It will only earn interest for the time period it is in there (most common).

or

- It will create it's own "mini-cd" where you have to keep those funds in for the same time line you chose to begin with. This usually has a different interest rate (whatever rates are at that time) and the only advantage to not doing 2 CD's is that you can add less than what your bank has for a minimum opening amount.

Quote:
Also, is it possible for my interest rate to change, positively or negatively, while I'm holding the CD?
Nope, CD's are fixed.
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Old 06-08-2007, 08:21 PM #8
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you have 2 options.
Send it to me. thats what i would personally do if i were in your shoes.

or you could find a good 2 year plan that you could get about 7% interest tax free etc
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Old 06-08-2007, 09:27 PM #9
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Quote:
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or you could find a good 2 year plan that you could get about 7% interest tax free etc
What type of 'plan' would this be?
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Old 06-10-2007, 02:09 AM #10
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Quote:
Originally Posted by Masterdog99 View Post
2 year plan that you could get about 7% interest tax free etc
Which would be?
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Old 06-15-2007, 09:44 AM #11
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hes probably talking about munis...

$500--->into a roth IRA...start your liquid retirement account early...put 20-50 bucks in every month. it will add up.
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Old 06-15-2007, 09:18 PM #12
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Quote:
Originally Posted by vvhoisjohngalt View Post
hes probably talking about munis...

$500--->into a roth IRA...start your liquid retirement account early...put 20-50 bucks in every month. it will add up.
Find me a decent muni paying 7% and I'll buy every last one they have. They just aren't out there at those kind of rates right now.
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Old 06-15-2007, 11:29 PM #13
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Ira Ftw.
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Old 06-16-2007, 05:46 PM #14
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Quote:
Originally Posted by lovetocheat69 View Post
Ira Ftw.
Why the IRA over some other type of investment?
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Old 06-16-2007, 06:59 PM #15
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Quote:
Originally Posted by SoMich_Tom View Post
Find me a decent muni paying 7% and I'll buy every last one they have. They just aren't out there at those kind of rates right now.
that 7% he is talking about is probably "realized" return after tax benefits...i was purely speculating as to what his "two year plan" was.
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Old 06-16-2007, 07:05 PM #16
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Quote:
Originally Posted by vvhoisjohngalt View Post
that 7% he is talking about is probably "realized" return after tax benefits...i was purely speculating as to what his "two year plan" was.
Realized return would be whatever the muni bond is paying. Federal income taxes are not paid on them, and usually state and/or local isn't paid either.

Your actual yield is whatever the bond says.
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Old 06-16-2007, 08:15 PM #17
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Don't move the money until you can save up to atleast a grand. Your options will double what you can do with the money and returns maximized.
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Old 06-16-2007, 11:08 PM #18
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Taken from Morningstar forum in mutual funds with someone asking how to do it with $400...

"6. Using Kevin's very helpful screen, Dearer,
snowflake| 06-13-07 | 10:50 PM
I would choose UMBWX, ARGFX and UMBHX with $100 in each UMB fund and the remaining $300 in ARGFX. Then I would appropriately add to the UMB funds till a mix of 35% in UMBWX, 29% in ARGFX and 36% in UMBHX is achieved in about six months or less with a total account balance of approximately $1035.

The resulting portfolio will give you about 33% foreign stock coverage and a fairly even 33,34,33% split between giant and large cap companies, mid cap and small cap companies with the overall portfolio tilting toward the growth side of M*Star's style box diagram. Nonetheless this would still be a low risk, low cost, low turnover portfolio which should be easy to maintain and which would outperform the market over time.

I assumed that this will be a retirement account and that you're a younger investor with a below average tolerance for risk. Because of your age I would avoid bonds till your in your mid forties at which time you might consider DCA'ing from UMBWX into PAXWX which is a very fine global hybrid balanced fund and would maintain at least some foreign stock exposure as well as increasing your exposure to high quality fixed income investments. PAXWX also has long tenured management with a low risk, low portfolio turnover and below average expenses within its peer group.

I hope this gets you started on the right path toward low risk accumulation of retirement wealth and security.

Peace and love,

Flakey"
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Old 06-17-2007, 01:54 AM #19
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why not open a high yield savings account, I have one with emigrantdirect at 5.05% apr, got 7 grand in there right now and make about 30-35 in interest every month and I add 50-100 when I can, most of these accounts are liquid so if you get in a bind you can pull the money out.
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Old 06-17-2007, 11:40 AM #20
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save it until you think of something good to get dont rush it
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Old 06-17-2007, 11:46 AM #21
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Quote:
Originally Posted by thrillhouse600 View Post
why not open a high yield savings account, I have one with emigrantdirect at 5.05% apr, got 7 grand in there right now and make about 30-35 in interest every month and I add 50-100 when I can, most of these accounts are liquid so if you get in a bind you can pull the money out.
A savings account and a mutual fund portfolio fulfill two completely different needs.

While a liquid savings account should be a part of everyone's total financial portfolio, a good mutual fund portfolio will historically beat any savings account out there over longer time frames. After taxes and inflation you are actually netting under 2% on your savings account.
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