Free Ebook.

Enter your email address:

Delivered by FeedBurner

« Now's a Great Time to Invest | Main | Market Up Big »

January 23, 2008


Feed You can follow this conversation by subscribing to the comment feed for this post.

Other than CD's and money markets, what do you suggest investing in if you still need that money to be fairly liquid?

For example, my wife and I are planning to quickly pay off our house. However, we plan on building our next home which means we'll need a pretty large downpayment. Thus, we may have 100k house loan left, but we'll have 100k in cash sitting around. Where should I put that money besides CD's and money markets?

Beastlike --

Personally, I'd put it in moneuy markets and CDs.

FMF - Up to what amount would you then start to consider something else? 200k?

Ideally I would like to own a home that I planned on staying there or could stay there forever (no need to ever upgrade) and have about 50k in CD's/MM's. However, since I am basically saving for a large downpayment on that house, I'm just not sure I am making the right decision keeping a large amound of cash in investments only making inflation plus 1-2%.

Are you willing to risk losing principal in the short term for a hope of gaining a couple percentage points in return? Personally, for something like saving for a house, I would stick with the 5% return in a money market and not have to worry about the risk of the stock/bond market.

Beastlike --

There's nothing I can think of that will give you a better term and complete liquidity in the short term.

FWIW, I have my new house downpayment money in a money market. Yeah, I might not need it for another year. Then again, I might need it tomorrow.

Just a question about this saving say 10%, or 20% etc. Is this for saving for retirement? Or is this for a new car we might need or to make some sort of other investment or a new computer?

Sounds good.. Well, if anything, at least I am little more confident that I am making the right decision. Most likely our move is 3 to 5 years off, but if another baby pops up anytime soon, that can quickly change!

Thanks FMF/Kevin!

Scott --

I'd say 10% for retirement (counting an employer match) plus any additional saving you may need.

Can't you use the 20% in savings as potential emergency fund? Not sure why I would want 2 different accounts for something that should only be used in case of an emergency.

I would say 20% is the absolute minimum you should be saving. We save more like 50% and I think if you want to be financially prepared for the future you can't get away with anything less than 10% short term and 10% long term. But that's just me.

The comments to this entry are closed.

Start a Blog


  • Any information shared on Free Money Finance does not constitute financial advice. The Website is intended to provide general information only and does not attempt to give you advice that relates to your specific circumstances. You are advised to discuss your specific requirements with an independent financial adviser. Per FTC guidelines, this website may be compensated by companies mentioned through advertising, affiliate programs or otherwise. All posts are © 2005-2012, Free Money Finance.