beatbox32

Financial gurus,

I'm looking to accumulate as much as possible in the next 2-4 years to put towards a downpayment on a new home when the market starts to return to reality...Right now, I am putting about 15% of pre-tax earnings in a 401k, but of course, I don't want to pull anything out of that until I've hit retirement. I'm just looking for something I can invest in for the short term and get the most back. Right now, I'm seeing my Emigrant Direct savings account as the best option (with the ~5% APY).

Does anyone else have any other suggestions?

Thanks!

__________________
-beatbox32



"Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to be the tool by which men deal with one another, then men become the tools of men. Blood, whips and guns--or dollars. Take your choice--there is no other--and your time is running out." - Atlas Shrugged

zippyjuan

For higher returns you generally take on higher risk- which is not something you want to do with money you expect to need in a couple of years since you do not have time to catch up if things head down on your investment. I would be more inclined to look at things that offer you a guaranteed rate of return like money market account or CDs. Do places like ING or Emmigrant still have good rates?

__________________
I add new pictures to my photo gallery pretty regularly. You can see them here if you are interested: http://www.pbase.com/jeffryz

VTGreg

ING is around 4.5% right now.

If you want no risk, you are probably best off leaving your money in the Emmigrant savings account. You can also take a loan against your 401k to purchase your first home. It may be something to look into, but I'm not sure if there are any negative tax implications.

__________________
It only ends once... Anything that happens before that is just progress.

Courage is not the absence of fear but rather the judgment that something else is more important than fear.

beatbox32

Thanks for the advice guys. Emigrant right now is at 5.05%, and I figure that is probably the best route at the moment. I definitely want to avoid using the 401k so I can make the compound interest really work for me.

gwilks98

You want to maximize returns? Find a stock you are certain is going to move 1 direction or the other, and buy a bunch of options contracts that favor the move.

It's extremely risky, but the returns are much more lucrative.

If you don't know what you're doing, or can't bear to lose it all on a bet, don't bother.

__________________
"I know the pieces fit, cause I watched them fall away."

"Cold silence has
A tendancy to
Atrophy any
Sense of compassion."

MJK

brainsmile

5.30%

http://www.gmacbank.com/index.do?eng...e&keyword=gmac

__________________
**********************************
DCM #1 (Founder)





"Nobody beats Vitus Gerulaitis 18 times in a row." - Vitus Gerulaitis on beating Jimmy Connors after 17 failed attempts.

brainsmile

Daedalus

5.5% if you have $10k minimum and won't mind the hassle of going through the FDIC to get your money back when Countrywide folds.

zippyjuan

For money he wants to use in a couple of years, he probably does not want to take on that kind of risk. Short term moves can be a crapshoot anyways.

gwilks98

Yeah, I know. Still I thought it was worth mentioning.

One word of advice: Stay away from daytrading. The commissions and fees will eat away at your returns.

rollings

Can you kindly explain what this means..

thanks

__________________
Data Recovery Service

zippyjuan

Probably that he has lost money doing it- as most do. Day trading is pretty steadily buying and trading stocks. But each transaction has its costs on both the buying and selling end plus you have taxes on any gains. A stock has to make a pretty good increase in price to cover those costs and the more often you trade, the greater you costs which reduces your return. Industrial day traders are shifting around large blocks of stocks so their costs per trade are not as bad since they are spread over the large value of each trade.

If you have $1000 worth of a stock and it costs you ten dollars a trade, you need the value of that stock to go up about $25 just to break even- $10 to buy, another $10 to resell it, and then just say $5 for taxes. In this case, about 2.5%.

Daedalus

Correct, except the taxable gain is discounted by any transaction costs, so in the above example you only need the stock to go up $20 to break even. I made over 2,000 trades in just a few months during in the .com bust. My gross sales were well over $10M. When you're trading $25k lots $20 in fees may seem like a nit...but commissions nearly equaled my losses for the period. Monthly exchange fees and software subscriptions can be in the $hundreds for an individual trader.

gwilks98

Bingo, though I haven't lost money at day trading. I've been smart enough to stay away from it.

yippiekiyeh

Daytrading is definitely not where you're going to make the moola. If you're looking to build up some cash savings, put a decent amount aside every month in a decent interest returning bank account...

If you can scrape up $500/month for 4 years... that will be $24,000 not including interesting...

__________________
Distributed.Net
I'm Trying this blogger thang...

beatbox32

Thanks for your advice everyone. Looks like I'll stick with stashing the cash away in my Emigrant Direct account.. Minus $1500 left on my car payment, I'm pretty much debt free. So that will help me be able to put more into my savings. That and loads of Ramen... :-D

Oh, and lets hear it for post 150! woohoo.

cruelpupet

For no risk, get a cd. But dont put it all in one cd, stagger them. For ease of math lets say you have 10k to play with and 3month cds are at a decent rate. Do $3300 a month in the CDs that way if there is an emergency and you need the money at least 1 CD will always be mature.

BTW an ING CD is at 5.25%

__________________
Am I alone here? Is that it?
Am I the only one who sees.

Maybe we can learn to be just like him.
Wear a little uniform.
Yes, sir.
No, sir.
Thank you, sir.

Dave_7

Agreed.... as CD's have a guaranteed rate of return over their lifetime... ING, Emigrant Direct accounts do not.... those savings/checking account rates can go up or down. CD's, you know for sure what you're getting for that period of time.

Dave.

johnnymk

I have been thinking the same thing about Countrywide lately.