Parking 30k?

[Networth]

Hey all,

I am on hiatus from school till spring when I enter a program. Till than I will be working full time after figuring some pay and money I have already saved I will have a little more than $30,000 in my local money market credit union(earing .36% intrest rate). I only know very basic stuff about investing but would like to put the money somewhere I can make a decent return. I am continuing to educate myself as much as possible but was also looking for some advice as to what to do with my savings. This is money I don't need, I live rent free with my gilrfriend and cover all my other bills with my part time job, and have alredy paid for my tuition. 

[Startome]

My girlfriend has an account with Wells Fargo for that kind of thing she really likes. I know there is some kind of penalty for taking it out too soon, but the interest rate makes it well worth it (not as CD). Might be worth looking into.

[HoldingOntoHope]

With any investment product you are going to find that as the potential for gain goes up so does the risk factor. That means that the gain may not be achieved and there is a potential for loss also. A savings account or CD has no  risk (assuming the institution is federally insured) at the level of investment you are talking about. But in return for no risk the current return is minimal. A single company stock or bond or a mutual fund invested in them has greater risk. Some funds are somewhat conservative, others are highly speculative. Government securities have a risk of price change unless you hold them to maturity.

Only you can decide for yourself what level of risk you are willing to take in hopes of investment return. A lot of risk can be defrayed by length of time you intend to hold the investment. A long term position in a moderate risk mutual fund is likely to provide gain. But by long term we are talking 20+ years. Over any 1 year period or less you could see large gains or large losses.

There are plenty of newbie investment and financial sites available to educate yourself. Or even books if you want to go old school. If I were in your shoes I would leave the money in a savings account until I felt educated enough to make a decision I was comfortable with as to the longer term options.

[Asailorshort]

Do you have an emergency fund aside from the 30k? If not, I would suggest keeping 6 months of living expenses liquid, with 2-3 months worth in a savings acct & the other 3-4 months worth in mmas or a simple cd ladder that matures every 3 months. The rest of the 30k is for investing. If you don't already have a 401k/ira, i'd start there & then move on to stocks &/or mutual funds.

[Startome]

If you go the IRA route, research and consider going with a ROTH too if it seems to fit your life style.

[Networth]

Thanks guys! Looks I will probably opening a Roth IRA with the money, since I am limited to $5,500 a year I will have access to most of the money for the next 5 years incase of an emergency and I will definatly be out of grad school by than.

[Startome]

Congratulations on planning and using your money wisely =) I wish you the best of luck!

[HoldingOntoHope]

That's a great decision but only half a decision. The ROTH IRA is simply an investment vehicle. You are still going to have to educate yourself on what investments you want to make with your money. Almost the whole investment world is still open to you. If you can figure out what you want you could use a discounted brokerage house to open the Roth through and save fees on management.

[Networth]

Good point, I am reading more and more when I have the down time. I think I may use my credit union for the Roth IRA for now. I am also looking at potential mutual funds or "blue chip" stocks or even dividend paying stocks. Idk so much new information the concept of using my money to make money is a breath of fresh air.