Non-retirement savings newbie help

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youngpleb
Posts: 214
Joined: Mon Oct 16, 2017 7:06 pm
Location: VA, USA

Non-retirement savings newbie help

Post by youngpleb » Thu Dec 07, 2017 9:31 pm

Hi all! So beginning next year I am going to start saving up money for a down payment on the house. I don't have a set amount I'll be putting away, just whatever I can afford out of each paycheck. I'd estimate it'd be between 3,000-5,000 each year for the next few years (not accounting for promotions/raises/bonuses/etc). So I'm trying to learn more about how I should go about this, and here are the questions I have:

Since this is a relatively short-term investment (I'm 26, and am planning for a house in my early 30s), would I be better off investing these funds in the market or just stashing it in some type of decent APR savings account or money market fund? My brain is telling me that since it's a few years at least and there won't be a super quick need for the cash to invest, but am I not thinking of anything?

Additionally, all my 401k/IRA saving to this point has been Roth, so I've never had to bother dealing with taxable investments. Assuming I do invest the money, what company/funds would be the best for this situation? I'm leaning towards Vanguard just because they are who I currently have for retirement investments. As far as risk, I'd be wanting something like a 70/30 stocks/bonds allocation.
27. Always learning.

mhalley
Posts: 6064
Joined: Tue Nov 20, 2007 6:02 am

Re: Non-retirement savings newbie help

Post by mhalley » Thu Dec 07, 2017 10:08 pm

Money needed within 5 years should be saved, not invested. CDs or high yield savings. If you want to risk a portion of the money, check out this post/podcast ny doughroller.
https://www.doughroller.net/investing/t ... vestments/

mega317
Posts: 2554
Joined: Tue Apr 19, 2016 10:55 am

Re: Non-retirement savings newbie help

Post by mega317 » Thu Dec 07, 2017 11:42 pm

I agree, keep it in savings. You probably don't want to be risking loss in stocks. It wouldn't be crazy to use something like a short-term bond fund but you'd be adding some risk for what is, in my opinion, insignificant upside.

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Watty
Posts: 14122
Joined: Wed Oct 10, 2007 3:55 pm

Re: Non-retirement savings newbie help

Post by Watty » Fri Dec 08, 2017 12:17 am

mhalley wrote:
Thu Dec 07, 2017 10:08 pm
Money needed within 5 years should be saved, not invested. CDs or high yield savings.
+1

Even longer term bond funds can go down a lot if interest rates rise.

youngpleb
Posts: 214
Joined: Mon Oct 16, 2017 7:06 pm
Location: VA, USA

Re: Non-retirement savings newbie help

Post by youngpleb » Fri Dec 08, 2017 2:04 pm

Thanks for the feedback everyone! I've found a bank through bankrate.com that will get me 1.5% annually, so I might just go with that or a few waves of CDs. I do hope to earn enough one day where I actually have to plan out taxable investment strategies though :mrgreen:
27. Always learning.

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