We are saving $1000-$1200 per month- how should we invest it?

My husband and I recently began putting away between $1000 -$1200 per month and we plan on continuing to do so for the next five years. What would be our best option at this point? Should we just keep it in a standard savings account or should we invest it some other way? Since it will be short term, we don't want penalties for withdrawing money in 5 years and we don't want to take high risks with the $ either.
Thanks

This isn't retirement $, we have separate accounts for that.
We are actually saving this money b/c we plan on starting a family in about 5 years and want a nest egg and a down payment for a house before we start.

Money Market account to start with.
Then do some research and find few good Mutual Funds. Invest in Mutual funds.

Since you don't want to take much risk with your $ and you're going to need it in 5 years, you may want to consider putting it in a low-cost bond mutual fund, such as the Vanguard Total Bond Market Index Fund. As of 4/30/07, its annual returns are: 7.32% (over the past 1 year) 4.29% (over the past 3 years) 4.65% (over the past 5 years) and 6.08% (over the past 10 years). It requires a minimum initial investment of $3000 and a low expense ratio (0.20%). You can make additional investments in it (on, for example, a weekly or monthly basis) of $100 or more. Vanguard also charges a $20 annual fee on accounts with balances of less than $10,000.

I would also consider putting a portion of your savings (perhaps 10-20%) in a low-cost stock mutual fund. Again, Vanguard has a good offering -- Total Stock Market Index Fund. Its annual returns over the past1, 3, 5, and 10 years are: 14.29%, 13.08%, 9.44%, and 8.60%. Its expense ratio is 0.19%, which is also extremely low for a stock mutual fund. The same minimum initial investment ($3,000) and $20 annual fee apply.

Just FYI: I don't work for Vanguard, although I do have $ invested in its funds. It's a well-run, highly regarded company.

Good job :) That is a lot of money to save/invest.

You definitely don't want to put the money away in a standard savings account -- as others said, you won't keep up with inflation.

To get the best return on your money for the amount of risk you're willing to take, I would recommend meeting with a financial planner. He/she will be able to draw up a personalized plan to get you the best return.

A certificate of deposit,from a Bank, also called a CD,would be pretty good. Usually the longer you keep it,the more interest it pays. But make sure you read the fine print as far as penalties,such as for early withdrawal

a Benz

They're cool

for the short term I would advise a money market account or fund, not a cd since they're both at about the same rate ~5% and the money market account would be totally liquid whereas the cd would penalize you for taking your money out early. if you could stand to take the risk, maybe one or two months out of the year you could throw the money into an index fund or etf. hope this helps.

If you need to keep this money in a highly liquid account then your choices are limited. You probably need a money market account of some type. Most banks offer these services but usually require a high minimum balance to get the best rate and avoid fees.

If you can stand a little less liquidity you may want to invest in no load mutual funds with a broker. Your return over 5 years will be higher than a money market fund but are not guaranteed.

Good Luck

I don't know personally, but I have been told if you want to invest in something, Currency Exchange is the best route. Stocks are too risky, with currency exchange you have more control of your funds.

I'd do some research before you make the decision though.

You should definatly put some in stocks, bonds and a high yeild money market or CD. I would open a brokerage account such as Scottrade and a CD/Money Market where you get a high yield and can contribute to it monthly (Paypal.com has a high interest rate and is highly liquid). I would then contribute a percentage that was comfertable to each account, maybe 70% to CD/Money Market and 30% Stocks (this is a pretty conservative/safe amount i would personally do 60/40 or 50/50). Do some moderate research in a business news paper, such as Investor's Business Daily, and find about 3-5 stocks you like in different sectors/businesees and buy shares every two to three months. You can control your risk in stocks by picking stable companies with low risk, or smaller growth companies with more volitility. I suggest LGF, LVS, LAMR for some moderate risk/growth stocks or BUD, BAC, XOM for stable less risky stocks (all pay great dividends and are stable).

Use resources such as yahoo finance and Investor's Buisness Daily to learm more about the Markets and make sure you Have fun! I own LGF (Lion's Gate Entertainment) and LVS (Las Vegas Sands) and love reading their press releases and quarterly/annual reports because I enjoy reading about Movies coming out (such as Hostel 2 for LGF) and the future of Casino gaming in Malaco (going to have bigger revenue then Vegas in a few years!).

Hope this helps you start off with an idea of what to do.

Some in Mutual Funds long term and you can also go to a Credit Union and get a 5 months CD they are the ones they paid very well in today's rates. This are safe to be in

You definitely do not want to put your money in a standard savings account because it does not give you enough of a return to beat inflation (about 3% a year). With-that-said, lets take a look at some investment options out there:
*Certificate of Deposit (CD's): this is when you lend the bank your money for a specific rate (currently about 4.95% to 5.5%). CD are good for your short term money(6 months to a year max); however, any period longer than a year makes the CD a bad investment because taxes and inflation will erode away much of the return.

*Bonds: these are loans that you make out to corporations (corporate bonds) and to our government (municipal and treasury bonds). Bonds usually pays out a higher rate than CD's, currently between 5.5% to 6% (corporate bonds) and around 4% for government bonds (they are less because they are tax free) and they pay out twice a year. Most people that invest in bonds are trying to achieve one of two things: extra income or stability to their portfolio (in a down market, bonds will help cushion your portfolio)

*stocks/equities: this is an ownership of a company. Studies has shown that stock is the best way to keep ahead of inflation. Average returns about 8% & 9%. People that invest in stocks make money in two ways: through dividends and capital appreciation (think of dividends as a paycheck and capital appreciation as a promise to give you a raise). Not all stock has dividends.

*Mutual Funds: a basket of stocks; or a basket of bonds; or both. This gives you instant diversification. All mutual funds have some sort of investment objective: income (focus on investments that pay investor the most dividends 6%-7%); growth and income ( focus on capital appreciation and dividends 8%-9%); growth (focus on capital appreciation 10%-11%); aggressive growth (focus on small companies that may be the next Microsoft, Google, etc...12%)

Mutual funds may be your best option because it will offer diversification that individual bonds or stocks will not. It is better than a CD because it keeps ahead of inflation and it is easily accessible without penalties.

There are three common ways to buy into a mutual funds: A share; B share; and C share.

A share: traditional way of buying a mutual fund. You pay a one time sales charge upfront(front-load:maximum at 5.75% and management fee is about a quarter of 1%) There is no charge to sell. Over time this is the least expensive to own a mutual fund.

B share: you don't pay to get into the fund but you will have to pay when you sell. The management fee is at least 1.00% or higher. After 7 years, this turn into an A share. This known as a back-load fund. Over time this is the most expensive way to buy a mutual fund.

C share: you don't pay to get in and you don't pay to get out; however, if you sell before the 1st year, there's is going to be a 1.00% sales charge. The management fee is at least 1.00%. This is good for short term but bad for long term because of high management fees.

You may want to look at A or C shares. I highly suggest that you go see a financial advisor to help you build a diversify portfolio to spread out your risk. I suggest you stay with Growth & Income investment because they are not as volatile as Growth or Aggressive Growth.

In searching for a reputable financial advisor, start with JD Power and Associate to find out how they rate investment brokerage firms. Stay away from firms that push their own products.

I hope this has helped.

A money market fund will get you better returns than a savings account. It is very liquid and you won't have to pay any penalties for withdrawl.

I inherited some money when I was 18 and I was advised to put it in a low risk money market account. It won't make you rich but it's higher interest than your regular bank savings account and you can also withdrawal whenever you need.

I would definitely think about a 529. If you're looking to start a family, that would be a great investment vehicle for your children's college.

Investing tends to only get exciting when you make money quickly or you see the end result of a good investment over a fairly long period of time 15 - 20 years or longer.

The more risk we are prepared to take, the more we can expect to make. That is why the stock market will generally return more than a savings account.

To be successful you will need patience, discipline, and wisdom. But most importantly you need a plan and you need to define your goals.

It may prove expensive to acquire that much needed wisdom on your own. Learn from other peoples mistakes. Learn for other peoples successes. Read some books. Visit your local book store and find a book that you like and feel comfortable with.

Some of the titles I have on my bookshelf include:
One Up on Wall Street by Peter Lynch
How to make money in Stocks by William J. OвЂ™Neil (Founder of InvestorвЂ™s Business Daily)
The Millionaire Next Door by Thomas J Stanley and William D Danco

Check out web sites like fool.com and yahoo finance.

Investigate trading strategies with a proven track record over 3, 5, 10, and 15 years. Pick something that you understand, find easy to use, will help you realise your goals, and where you can take responsibility for your investments and be in full control of your capital.

Systems like the Stocks Monthly system are definitely worth investigating once you are up to speed with the nuts and bolts of investing.

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