Author Topic: Where to stash for the short term?  (Read 2618 times)

KES

  • 5 O'Clock Shadow
  • *
  • Posts: 43
  • Location: Columbus, OH
Where to stash for the short term?
« on: February 05, 2014, 09:09:50 AM »
We're about to get a nice refund from the government (yes, I know it's an interest-free loan to Uncle Sam, but our mustaches are still quite small and it's easier not to spend it if it's not there in the paycheck)

About 7,000 of this refund is earmarked for a new car. Our 2001 Avalon will die in the next 1-4 years.

Because I don't know when the car will die, I was going to just keep it in a savings account. Would it be better to put it into my Vanguard savings account where it will earn more? I just started the vanguard account last year and have never taken anything out (all money is currently in VTSMX). If I have to take the car money out earlier rather than later, will the taxes I have to pay on the capital gains nullify the gains I got by investing it rather than stashing it in a savings account?

matchewed

  • Magnum Stache
  • ******
  • Posts: 4382
  • Location: CT
Re: Where to stash for the short term?
« Reply #1 on: February 05, 2014, 09:12:15 AM »
Keep it in savings. If you need short term cash putting it in investments is a great way to possibly lose money.

soccerluvof4

  • Walrus Stache
  • *******
  • Posts: 6128
  • Location: Artic Midwest
  • Retired at 50
    • My Journal
Re: Where to stash for the short term?
« Reply #2 on: February 05, 2014, 09:16:48 AM »
I agree with ^ +1. If you want you could put a % of it in VMSXX in vanguard which gives you at least 1% on your money and ease of transfer in to your fund at no charge if and when you want to add.

nicknageli

  • Guest
Re: Where to stash for the short term?
« Reply #3 on: February 05, 2014, 10:30:58 AM »
I agree with ^ +1. If you want you could put a % of it in VMSXX in vanguard which gives you at least 1% on your money and ease of transfer in to your fund at no charge if and when you want to add.

I poked around on Vanguard.com for VMSXX and don't see where it gives 1% returns.  This is a tax-free fund?  Can you provide more info about it?  Sounds like a great spot keep some cash for a bit.  Thanks.

matchewed

  • Magnum Stache
  • ******
  • Posts: 4382
  • Location: CT
Re: Where to stash for the short term?
« Reply #4 on: February 05, 2014, 11:26:00 AM »
I agree with ^ +1. If you want you could put a % of it in VMSXX in vanguard which gives you at least 1% on your money and ease of transfer in to your fund at no charge if and when you want to add.

I poked around on Vanguard.com for VMSXX and don't see where it gives 1% returns.  This is a tax-free fund?  Can you provide more info about it?  Sounds like a great spot keep some cash for a bit.  Thanks.

https://personal.vanguard.com/us/funds/snapshot?FundId=0045&FundIntExt=INT

nicknageli

  • Guest
Re: Where to stash for the short term?
« Reply #5 on: February 05, 2014, 11:33:38 AM »
https://personal.vanguard.com/us/funds/snapshot?FundId=0045&FundIntExt=INT


Great.  Thanks.

It looks like in the last 12-months it returned .01% and not 1%.  Am I misreading something?  Thanks again.

matchewed

  • Magnum Stache
  • ******
  • Posts: 4382
  • Location: CT
Re: Where to stash for the short term?
« Reply #6 on: February 05, 2014, 11:50:07 AM »
I don't see where it says that either. No where in the prospectus does it guarantee a 1% return.