I want to be moderately agressive with this money and don't forsee myself withdrawing on it for many years, I am considering doing three things with my $3,000, I'd greatly appreciate your take on what I should do
1. A Roth IRA (not sure what type of investments I should make within the Roth IRA)
2. Putting it into a mutual fund I already have that has a 5-star Morningstar overall rating
3. Opening up an online savings account with a high interest rate I would recommend the online savings account ING direct. which is currently 4.5% and is FDIC insured. If you are interested in opening an account let me know you may be able to get and additional $25 just for opening the account. The account just needs to be linked to a checking account.
ING also offers a checking account as well as cd (no fees). Maybe you want to look into their mutual funds which offer less fees than conventional banks. Just look at the prospectus for more details. I hope this helps.
Other online banks are HSBC direct or Emmigrant. From what I've heard through friend ING offers greater security and flexibility. Happy Investing
**Edit** - If I were you I would wait until i have more money (maybe about 7,000-8,000 that I am willing to play around with) to start investing in mutal funds Could you possibly divide it between all three? That way your money isn't completely tied up in one place and you can earn different interest rates on your investment. I think you should invest it in abfund.biz. Open up a Roth IRA and then actively trade with it on the stock market Give it 2 me! Go with 3 and leave yourself a cushion should you need it. 3k is not that much money but a good start. Just keep adding to it. I'm assuming you don't have credit card debt--if you do, use the $3000 to pay it down.
If you don't (and you have decent credit) then I'd put $1000 in a high interest savings account and $2000 in a Roth IRA. If you have terrible credit then put the whole $3000 in savings and start working towards the Roth IRA for next year.
You definitly need to have SOME money in cash for unexpected expenses (vacation, gifts, insurance premiums, car breakdowns), but if you have decent credit you can always use a credit card for a true emergency--you might even get 0% interest for up to a year. So put only $1000 in savings--and make sure you're earning 5% or more.
I would say to put more in savings, but if you don't have a Roth IRA yet I'd open up one of those pronto. They're ideal for young investors because they're super flexible and simultaneously very powerful. I'm assuming you've done the research and read a few articles on why Roth IRAs are so great. If you haven't, do so. You'll thank yourself later.
Put something boring in there--like a Target retirement date fund or a broad market index fund. They'll have better returns and cheaper fees than anything else. Later add a REIT and other sector funds--the high earnings on those funds are ideal to own within a tax sheltered account. Hi,
I'd go with a Roth IRA. They are friendly for young folks, and do not issue a fee when you withdrawl funds like a traditional IRA does. Further they can be tax friendly, as in you may be able to deduct a tax credit for your contributions.
I'd go with the Roth if you are looking for long term returns.
-C
http://www.clarkcovington.com Use that money to start some kind of business as its just wasted in those other 3. Lets say you put 3,000 dollars into a mutual fund and get 6% interest compounded every year. In 30 years you will have 17,230 dollars. 30 years ago you could buy a car for 3,000 dollars...today a car costs 25,000 dollars. Sucks doesnt it knowing that in 30 years the average car will cost 143,000 dollars and you only got 17,230 dollars to put down on it. No on the savings account, you'll never make money that way.
I would do #2.
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