Author Topic: Vacation account - invest or save it?  (Read 2158 times)

quietmalu

  • 5 O'Clock Shadow
  • *
  • Posts: 5
Vacation account - invest or save it?
« on: June 04, 2016, 06:39:21 PM »
I'm planning on saving $1000 a month for my vacation a year away.  I'd love to get some advice from fellow mustachians on this.  Would it be better to just put it in a regular savings account (current CAD savings rate is .80%)?  Or should I invest the $1000 every month in stock funds until it is time for my vacation?  If so, which funds should I invest in?
FYI:  I live in Canada.  So, I'm not privy to same mutual funds from Vanguard, just ETFs.

Thank you.

Choices

  • Pencil Stache
  • ****
  • Posts: 516
    • ChooseBetterLife
Re: Vacation account - invest or save it?
« Reply #1 on: June 04, 2016, 07:56:10 PM »
If it's only a year, there's a good chance the market will be down when you need to pull the money out. There's a chance it could be up too, but you never know. We keep short-term savings in a money market or regular savings account and only invest money we don't need for several years.

It sounds like you're gearing up for quite an adventure--have a great time!

maizefolk

  • Magnum Stache
  • ******
  • Posts: 4668
Re: Vacation account - invest or save it?
« Reply #2 on: June 04, 2016, 07:59:21 PM »
Check out the top right figure here:

http://forum.mrmoneymustache.com/investor-alley/cash-vs-stocks-risk-tolerance-and-timeframes/msg1102925/

Essentially after 1 year, you have a 2/3rds chance of ending up with more money if you put funds into the stock market rather than a savings account.

chappy

  • 5 O'Clock Shadow
  • *
  • Posts: 4
Re: Vacation account - invest or save it?
« Reply #3 on: June 05, 2016, 02:30:14 PM »
I'm in Canada too. Look around. There should be some 1 year GICs in the 1.5-2.5% range.
Or a better savings account around 1.3%.

I'm currently with PT's TFSA getting 1.75% (variable rate, it dropped from 3%).

Stocks/bonds are more for long-term. 1 year is not long-term. I personally wont risk it, but it's your money.

Paul der Krake

  • Magnum Stache
  • ******
  • Posts: 4918
  • Age: 12
  • Location: UTC-10:00
Re: Vacation account - invest or save it?
« Reply #4 on: June 05, 2016, 02:53:52 PM »
In my humble opinion, if you need to save for a year for a vacation, you are buying too much vacation.

Jags4186

  • Pencil Stache
  • ****
  • Posts: 595
Re: Vacation account - invest or save it?
« Reply #5 on: June 05, 2016, 04:48:38 PM »
I'm planning on saving $1000 a month for my vacation a year away.  I'd love to get some advice from fellow mustachians on this.  Would it be better to just put it in a regular savings account (current CAD savings rate is .80%)?  Or should I invest the $1000 every month in stock funds until it is time for my vacation?  If so, which funds should I invest in?
FYI:  I live in Canada.  So, I'm not privy to same mutual funds from Vanguard, just ETFs.

Thank you.

$12,000 for a vacation--that's some vacation!  Where you going?