Then I’ll repeat what I said upthread…have 3-6 months worth of expenses in liquid savings, invest at least 15% of your income, and save for any large expenses (house, car.)
With your financial smarts and your savings level, you should have no problem paying for a car with cash and putting a huge down payment on a house and financing the rest with a 15 year loan.
You’re doing good…keep it up.
Is it true that going to your bank is a bad idea for investments? My friend told me that because they know how much is in your savings they might be a little more willing to put your cash in investments they otherwise would avoid…I am not sure…
My roth and little 401k are with fidelity so maybe I should call them
double check to see if the savings is FIDC insured for a start.
Second, as a former investment bank professional, you can not get a higher yield than US treasuries without higher risk.
Learn a lesson from the sub-prime mortgage. Chances are a high yield fund (or just higher than treasuries yield), then the fund owns sub-prime mortgage debt.
You need to read the prospectus of the fund and what they are allowed to invest in rather than listen to a brainless bank employee risking your money to earn their commission.
It is true in that going to a car dealership is bad for buying a new car. When you go to your financial institution without safeguarding yourself with at least the basics of what you’re after, they’re going to try to oversell you something that you don’t need, or will cost you down the line. You’re going to have to play hardball with the suggestions they offer (loads, commissions, fees, expense ratios, etc…). It’s their business, how else did you think they made money? There’s always a fee for some type of investment though, you cannot avoid it. The point is to pay the lowest expense possible for your investment vehicle and avoid the salesmanship of the financial porn industry by getting pwned with fees.
1st step of investing - educate yourself.
As usual, I’m going to link to the diehard forums:
http://www.diehards.org/forum/viewtopic.php?t=6211
Read the post in the link, and then browse the user posts. Great stuff in there.
Screw saving. Take a leave of absence from your job and go traveling!
depending on your state, consider a double-tax free bond fund? you can do math to convert a double tax free rate of return to what a hypothetical taxable rate is (or vice versa for after-tax yield on a taxable rate)