What to do with 60K

[starfish]

Hi all.  I have not started investing yet, so I don't know much of the fine details on how to do that.  I have around 60K inherited that has been sitting in a Tax Free Savings Account (Canada) for several years.  I realize that without investing it, its loosing to inflation.  But each year, we've been unsure whether we might use it to buy a condo (turned out to be out of our reach), and then my dad suggested the possibility that he'd move in with his girlfriend and let us live at his house, if we payed off the remainder of his mortgage (about 50K).  So, I didn't want to tie it up, or possibly loose in a short term investment.  So, the house possibility would be 1.5 years away.  Does anyone here from Canada have a suggestion for a bank that has those low-fee or no-fee investment opportunities that MMM writes about, but also has a good interest rate on savings accounts?  That way, I could stop loosing so much in the savings account, and hopefully not have to switch banks to invest it if my father's house falls through.  Its all in CIBC right now.  I noticed signs for tangerine.ca (ING Direct) advertising better interest rates... but I don't know if its good to do investments through them later on.  Advice?

[dividendman]

How did you get 60k into a TFSA? Has it been around that long? I thought you could only contribute 5k/yr... anyway...

If your horizon is only 1.5 years the choices aren't very good. GICs/Bonds... that's about it, and will probably get you the best rates. I think ALLY has the best rates and it's just a savings account so it's very liquid. Good luck.

[starfish]

we divided it between my husband and I... between the two of us and all the years we could go back, we were able to put 25K each in.  We added d the rest over the next few years.

CAn you do GICs or bonds with the money still in TFSAs? 

What is ALLY?

And, do you know which bank is the best place to do investing, 2 years from now?

[dividendman]

Ally is a bank... but apparently my information is outdated. I just googled "best interest rate savings account canada" and got this:

http://www.highinterestsavings.ca/chart/

it lists the banks and the rates available.

You are really new to this. You might want to just read some blogs and places for beginner investors.

TFSAs are just a container for investments. Any security (stocks, bonds, GICs) can be held in them.

Unfortunately nobody is going to be able to tell you what bank is best two years from now. Most of the big banks have reasonable discount brokerage fees and are virtually indistinguishable.

[Mother Fussbudget]

Lump Sum Investing. The Vanguard report (https://pressroom.vanguard.com/content/nonindexed/7.23.2012_Dollar-cost_Averaging.pdf) shows results for Lump-Sum (Lump) vs Dollar Cost Averaging (DCA) investing.

Since you have an indeterminate withdrawal date, you should consider treating it as any other investment, and putting it in a mix of investments that meet your investment risk tolerance.  MMM just did a post on investing $400,000 (US) and broke it down in a mix that might also work for you.

40% Vanguard Total Stock Market Index Fund (VTSAX, VTI, or a TD Waterhouse equivalent fund in CA),
40% Vanguard Total International Stock Index Fund (VGTSX or a TD Waterhouse equivalent fund in CA),
10% REIT fund (be a 'paper landlord' without having to fix toilets), and
10% Bond fund (this is purely insurance in case one of the 40% investments tanks in the next two years - your risk tolerance may make you want to put more $$(CA) in bonds, but for total returns you can't beat the stock market over time).   

[yes, I realize MMM is doing the lending-club thing; for myself , I don't have the risk tolerance for that, so recommend bonds - it helps that I'm older than most mustachian's here, and am on my 2nd shot at FI... that's a story for my blog -> coming soon]