Author Topic: Investing on $11k  (Read 3340 times)

kavsquires

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Investing on $11k
« on: August 21, 2014, 12:04:49 PM »
I am a single mom finally making a decent living. (Went from $35k to $55k in a rural area this year) I have managed to save $11k over the past year with the goal of purchasing my first home. I have paid all debts with the exception of $8k remaining in student loans. I would R E A L L Y like to make that money do a bit of work for me in the short term - after all - the bigger the downpayment, the more negotiating power I will have on my interest rate. I'm flummoxed. Any suggestions?

bo_knows

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Re: Investing on $11k
« Reply #1 on: August 21, 2014, 12:08:36 PM »
In general, you don't want to invest any money that you absolutely need short-term into stocks.  You should keep that money in a safe accessible place (savings account, money market, maybe short-term CD's).  While it is enticing to get gains from the stock market, you have to ask yourself  "If I want to buy a house in 1 year, and I put $11k into the market, but when I want to buy the market has dropped... do I still want to take out that money?"

What's the time frame on your house purchase, and how much do you think you'll need?

kavsquires

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Re: Investing on $11k
« Reply #2 on: August 21, 2014, 12:14:41 PM »
Yes, I assumed the stock market was a wash for short term - it's just difficult to see it sitting there, doing nothing!  The cost of living is very cheap where I am. I can purchase a nice home with a yard in a good neighborhood for $100k-$125K. I'd really like to have $20k to put down so that I can do a 15 to 20 year loan with a lower interest rate.

I'm looking to make a purchase spring of '15.

shotgunwilly

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Re: Investing on $11k
« Reply #3 on: August 21, 2014, 12:17:37 PM »
It would be best to hang on to that cash until next spring if you plan to buy a house with it then.

kavsquires

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Re: Investing on $11k
« Reply #4 on: August 21, 2014, 12:21:55 PM »
Yes - I suppose if anyone had a magic formula for turning $11k into $22k in a few months wouldn't be posting here for free, LOL! Slow and steady wins the race. Thanks!

bo_knows

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Re: Investing on $11k
« Reply #5 on: August 21, 2014, 12:32:44 PM »
Yes - I suppose if anyone had a magic formula for turning $11k into $22k in a few months wouldn't be posting here for free, LOL! Slow and steady wins the race. Thanks!

Well, according to your post, you already have a magic formula for making $0 into $11k in 12 months :)

nordlead

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Re: Investing on $11k
« Reply #6 on: August 21, 2014, 12:37:03 PM »
Lenders like to see money in the bank account. If you are buying a house in the spring, then you'll need the money in your bank account in the winter. 3 months worth of any kind of investment will be almost nothing (without taking significant risk).

I'd just go with a high interest (1%) savings account and call it a day.

neo von retorch

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Re: Investing on $11k
« Reply #7 on: August 21, 2014, 12:39:12 PM »
I use www.smartypig.com for my short-term cash. 1.0% APY

kavsquires

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Re: Investing on $11k
« Reply #8 on: August 21, 2014, 12:46:56 PM »
Quote
Well, according to your post, you already have a magic formula for making $0 into $11k in 12 months :)

I did that the old-fashioned way... by moving every spare dime into the savings account! I'll count my blessings. : )

kavsquires

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Re: Investing on $11k
« Reply #9 on: August 21, 2014, 12:47:45 PM »
SmartyPig is a pretty cool gig. Thanks!