I am able to save $1000 a month. I would like to invest that money. What would be the best choice for me?

I am not interested in long terem investments. I do not wish to be a money tight young person and a rich old one.

I allocate my monthly budget this way:
70% regular expenses (housing, food, utilities, gas)
10% long term savings (retirement, etc)
10% short term savings (for vacations, shopping sprees, unexpected expenses)
10% fun money (going out, shopping, spa, etc).

That way I don't feel deprived--I'm providing for my future but I'm also enjoying life now.

1. You should contribute enough to your 401k to get any company match. If you don't it's like turning down a bonus check. Then you should max out a Roth IRA ($4000 in 2007). The tax advantages of these accounts compound your investment immediately. It's silly not to take advantage of these government gifts if you can afford to.

2. Put your short term savings or emergency savings in a money market fund or high yield savings account. Make sure you're getting over 5% interest (Vanguard, emigrantdirect, ingdirect are all good options for these accounts).

I was just browsing and came across this. This person has the best idea ever! If all you ever do is save money you will feel deprived and may splurge when you shouldn't. I am going to follow this plan - THANK YOU to both asker and answerer! Report It

There are ways to invest without being 'money tight' but you do have to put your money into something that will make you money. If you choose to spend your money on something frivolous or something that takes money from you then you will be stressed and broke later in life. You can contact me to talk further but right now my basic message would be that you reap what you sow, and very little/temporary effort will yield temporary results. Find something that fits your budget and that makes you money with increased effort.
-Ken Seavert

Investing for the future isn't about being poor when you're young and rich when you're old. It's about releasing yourself from dependence upon your job and your finances, so you can do whatever you want to do with your life.

If you don't invest for your future, you'll find that you have to depend on your government to take care of you or work until you die. Not a good plan, either way.

It's *great* that you have $1000 a month to invest. After you've socked away a couple month's savings in some place that's easy to access -- a money market fund earning 5% is a pretty good idea -- then I'd start investing in stock funds, preferably ones with low expense ratios (that means you get to keep more of the profits and your fund manager keeps less). "Index" funds, like those at Vanguard, Fidelity, and Schwab, are great.

I also strongly recommend a 401k plan, if your employer has one. They often match what you contribute (which is free money) and the gains aren't taxes until you take them out at retirement. Also consider a Roth IRA, which has terrific tax benefits, too.

Finally, owning your home is a great way to accumulate wealth. My sister makes about $35k per year and wasn't saving any money, but managed to buy a townhouse in 1999. Her equity in that home now is almost a quarter of a million dollars.

Doug

if you are able to save 1000/month you will not be money tight. The thing about long term investments is- you know- you will be an old person one day and you will need money to survive once you can't work- for a small amount of what you're ABLE to save right now you could make sure your future is secure WHILE making sure you have spending money now. If I were you, I'd talk to a financial consultant who can steer you toward short term stocks and mutual funds etc and also suggest an IRA- you are only allowed to put 4000/year in an IRA anyway and you can withdraw it in case of emergency before retirement (with penalties but still) I mean, what if, 10 years from now (assuming you won't be "old" by then), something happens and you need money?