Need suggestions to earn at least 2% with low risk and high liquidity

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darthvader747
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Joined: Thu Feb 19, 2009 9:11 pm

Need suggestions to earn at least 2% with low risk and high liquidity

Post by darthvader747 » Fri Apr 22, 2016 7:38 pm

Could you suggest ways to earn 2-3% on an investment with low risk (principal protected). Currently the money is sitting in a savings account earning 1%

Amount : $10k - $20k
Scenario:
This is money that I may need to access to purchase real estate investments when I find the right investment. In the interim I want to find a way to make some return (more than the typical savings account). I can wait at least 2 weeks to liquidate the investment. I am okay with losing 2% on the investment.

Criteria:

Earn at least 2% on my money
Should be able to liquidate the investment in approx 2 weeks
Risk: Okay with 2-3% loss

Current thoughts:


Invest in Vanguard retirement fund ( 0 Years to retirement / 5 years)
Invest in REIT index fund / REIT

Morik
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Re: Need suggestions to earn at least 2% with low risk and high liquidity

Post by Morik » Fri Apr 22, 2016 7:43 pm

Aren't there credit unions where, after jumping through a few hoops, you can get 5% interest on your account, but only up to $5k or so. But if you do 2-4 of those, you could safely earn 5%.

knowsnothing
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Joined: Sat Feb 14, 2015 10:12 am

Re: Need suggestions to earn at least 2% with low risk and high liquidity

Post by knowsnothing » Fri Apr 22, 2016 7:46 pm

You should spend all this energy finding a side gig that will earn you a few hundred bucks instead of chasing yield for a small amount of cash you need in the short term.

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LAlearning
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Location: Los Angeles

Re: Need suggestions to earn at least 2% with low risk and high liquidity

Post by LAlearning » Fri Apr 22, 2016 7:51 pm

5yr CD.
I know nothing!

darthvader747
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Re: Need suggestions to earn at least 2% with low risk and high liquidity

Post by darthvader747 » Fri Apr 22, 2016 8:03 pm

The challenge with my situation is that I may or may not need the money. So I want it to earn some return that will at least keep the money inflation protected. 5 yr CD doesn't work since I may need the money before 5 years. I am willing to take some risk (as in I dont get any return) so long as the probability of the scenario of loss is significantly lower than that of the gain.

Longdog
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Re: Need suggestions to earn at least 2% with low risk and high liquidity

Post by Longdog » Fri Apr 22, 2016 8:05 pm

LAlearning wrote:5yr CD.


Yes, I think this fits the bill. Buy a 5 year CD directly from a bank. Best case scenario is you hold it to maturity and make the guaranteed rate of return. Worst case scenario is that you cash it out early, and pay a penalty. Learn what the penalty would be, but most likely it will be something like 3-6 months of interest, and won't be even close to 2% of the investment.
Steve

simmias
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Re: Need suggestions to earn at least 2% with low risk and high liquidity

Post by simmias » Fri Apr 22, 2016 8:10 pm

$20k? Search Fatwallet Finance for the Netspend/Mango 5% thread.

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JonnyDVM
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Location: Atlanta, GA

Re: Need suggestions to earn at least 2% with low risk and high liquidity

Post by JonnyDVM » Fri Apr 22, 2016 8:34 pm

The only risk free high liquidity way I'm aware of are these netspend accounts that are all the rage lately. There's some hoops to jump through though.
Sometimes the questions are complicated and the answers are simple. -Dr. Seuss

darthvader747
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Joined: Thu Feb 19, 2009 9:11 pm

Re: Need suggestions to earn at least 2% with low risk and high liquidity

Post by darthvader747 » Fri Apr 22, 2016 8:50 pm

What is a 'netspend' account? Also, woundnt buying a Vanguard target retirement fund accomplish this (my goal)? Say retirement age = already retired. Looks like they invest over 50 percent in bonds.

Elbowman
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Re: Need suggestions to earn at least 2% with low risk and high liquidity

Post by Elbowman » Fri Apr 22, 2016 9:46 pm

Target Retirement is 30% stocks, so a 15% loss could easily happen.

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David Jay
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Re: Need suggestions to earn at least 2% with low risk and high liquidity

Post by David Jay » Fri Apr 22, 2016 10:06 pm

Total Bond is paying about 2%. But principle is at (minor) risk. Investment Grade Corporate is at 3.08 (SEC yield).

Any high quality bond fund will have way lower volatility (capital risk) than a stock fund.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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Watty
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Re: Need suggestions to earn at least 2% with low risk and high liquidity

Post by Watty » Fri Apr 22, 2016 11:35 pm

darthvader747 wrote:Could you suggest ways to earn 2-3% on an investment with low risk (principal protected). Currently the money is sitting in a savings account earning 1%

Amount : $10k - $20k


You would be getting an extra 1 to 2% a year. At the high end 2% of $20K is $400, but after paying state and federal taxes that might be reduced to $300.

There is such a limited upside that you need to be very careful of buying anything that has any risk.

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