New to investment

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New to investment

Post by Frida » Tue May 14, 2019 11:37 am

Hi everyone,

I am very new to this topic and investment in general. I recently have saved around 50,000 dollars and was wondering what safe options I have to invest this amount. I thought about savings were you do not touch your money for example for one year and they give you 2%, but that doesn't sound very much at all :). Can anyone guide me in the right direction with this amount? It is not yet enough amount for us to buy our forever home with yet.


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Re: New to investment

Post by mhalley » Tue May 14, 2019 11:47 am

What to do with money depends on when you need it. By definition, investments are not “safe”. Money needed within 5 years should be in cash equivalents, ie, money market, high yield savings or CDs.

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Re: New to investment

Post by RickBoglehead » Tue May 14, 2019 11:51 am

Frida, you should read the Wiki (see link at the top), and then some books that are listed in there, particularly The Boglehead's Guide to Investing. In the meantime, put your money into Vanguard's Prime Money Market fund. It pays close to 2.5% now and you can add or withdraw funds whenever you want.

2% for a 1 year CD is awful.
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Re: New to investment

Post by Hockey10 » Tue May 14, 2019 11:51 am

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Re: New to investment

Post by Misenplace » Tue May 14, 2019 11:54 am


Welcome to the forum!

mhalley is correct- if you will need this money for a down payment in the next few years, you are better off putting it in a CD or a savings account. Some of the on-line banks like Ally and CapitalOne have better rates right now than 2%. It is still not much, but at least it won't go down in value, and is FDIC insured.

I suggest that you also take a look at some of the resources on our Wiki to continue your exploration of investmenting and financial topics. Here is a good place to start:

Kind regards,

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Re: New to investment

Post by alex_686 » Tue May 14, 2019 12:07 pm

Welcome to the forum!
Frida wrote:
Tue May 14, 2019 11:37 am
... and was wondering what safe options I have to invest this amount.
Let me start out with a few points. Risk and return are linked. If you want higher returns you need to take higher risks. As some have suggested, if this is for a down payment in the near future - less than 5 years - CDs or some other low risk option might be best.

However I would suggest that you take a wider view. Inflation may eat away at the value of your holdings. The stock market may be riskier but over the long haul it tends to do better. For long term goals - like retirement - the odds may be better if you invest in stock market.

First, I would write up a Investment Policy Statement (IPS). ... _statement

Investing may seem complex, but it helps if you break it down into smaller parts. Figure out your goals and risk tolerance. These are the crucial building blocks that everything else rests upon but that most people ignore. From that it should be easier to figure out where to put your money.

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Re: New to investment

Post by 272 Sheep » Wed May 15, 2019 9:48 am

While safe-guarding your $50k and if having a 401k savings plan where you work, you could start contributing with a small percentage deducted from your paycheck. I would recommend starting small. Hopefully, the plan would have matching money. :happy
Carl W.

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