[dads]

I searched, but a lot of the threads were old/related to investing. I’m 20, and just want to know the best way to put away about $1200 a month. I don’t know if I particularly care about interest or anything, as I’ll only be saving at this rate for the next three years. I don’t plan on buying a new car or something frivolous, but money = freedom, so I want to know where I can put my money. I won’t be withdrawing from it either. Thanks for the help, and sorry if this questions been asked.

[Ensam]

What's your timeline for wanting access to the cash? One year? Two years? Five years? Ten?

[dads]

Preferably in three years, when I'm out of the military. Possibly five years of the options at that time are better, because I'll be in college for a couple of years wrapping up my BA.

[General Mayhem]

Have you ever looked into the TSP you can get through the military?

[dads]

(12-16-2014 08:29 AM)General Mayhem Wrote:  

Have you ever looked into the TSP you can get through the military?

I've been half-awake through the 100 briefings I've gotten on it, and the impression I get is for lifers and/or people who are going the traditional savings route to save to retire. Also, as far as I know, it's a long term savings plan, and theres penalties on early withdrawals.

[Harvey Specter]

(12-16-2014 05:35 AM)dads Wrote:  

I’m 20, and just want to know the best way to put away about $1200 a month. I don’t know if I particularly care about interest or anything, as I’ll only be saving at this rate for the next three years.

Not caring about return is a mistake, IMO. Using what you provided and assuming you earn less then 40k/year (dividends would be tax free), what I would do is invest in high dividend yielding stocks. 1200/month over 3 years with 8% annual return (which is easily doable) you will end up with just under 50k.

[Ensam]

Three years is a relatively short time horizon when it comes to investing. Buying stocks or corporate bonds would be risky if you definitely want to have access to the money.

You can get 3 year CDs for about 1.5% APY at the moment. That's not bad, inflation for 2014 was 1.7%. If you definitely want to have access to your money in 3 years I'd do that.

If you're ok waiting a few years longer then stocks would be fine. You might be up in 3 years, you might be down. Long term you'll likely be up so you just have to make sure you can weather the storm. If you'd bought the S&P 500 in October of 2007 you wouldn't have broken even until Feb. of 2013. So you have to be comfortable waiting 5 or more years to recoup your losses if you invest in an indexed fund. Personally I wont put any money I need in less than 10 years in stocks.

On the other hand if you don't mind losing your money but want to have a higher return something like microfinance might make sense. People who do well make 20-30% but people who do poorly lose a lot of money. Not for the faint of heart.

[redbeard]

username: dads

age: 20

??????

[LINUX]

(12-16-2014 07:25 AM)dads Wrote:  

Preferably in three years, when I'm out of the military. Possibly five years of the options at that time are better, because I'll be in college for a couple of years wrapping up my BA.

Open up a bank account, car insurance, renters insurance with USAA. You won;t regret it.

[Cyclone]

I'd agree with a CD, if you go with Ally Bank (they are online-only) they give you at least 1.5% for a 3-year maturity CD. But overall, the +/- of .3% in which bank you choose won't matter that much if yr only saving ~15,000 per year. Certain CDs allow you to withdraw 1-2 times per month, your bank will probably have a dozen options.
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