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Posted by Elle on October 8, 2006, 4:19 pm
If you haven't yet submitted a post on this to
misc.invest.financial-plan, then definitely do so.
Obtaining a low risk 6-7% return for the next few years and
starting right now will be difficult. But you can buy CDs
yielding 5% (or a little more) right now, maturing in a few
years. www.bankrate.com has current CD rates, for one.
Anything yielding more is going to be higher risk.
I would be remiss without expressing concern about your long
term plan. Inflation will ravage your investment income over
time if it's only put into CDs etc. You're very young. You
have a lot of time. You need to consider this.
I advise computing exactly what you're spending each month.
Use a spreadsheet program. The point is to know how far that
$1400/month (my after tax, conservative approximation) is
going to go. Then ensure you have
-- health insurance
-- if married or with children, life insurance
-- retirement savings (granted you have the retirement pay,
but that's mighty cheap living by itself, even with the
house all paid for)
Depending on the status of your retirement savings, you
really want to shoot for putting this into a fund whose
principal will keep up with inflation and then some. That
means something like a dividend income fund combined maybe
with some CDs (or similar). The MIFP crowd will likely want
to know more about your long term financial goals, so start
thinking about what to say.
Try some of the free online asset allocation tools linked at
http://home.earthlink.net/~elle_navorski/id8.html . They
will give you /some/ ideas about what someone like yourself
who is retired very young (but planning on working longer?)
should do.
> What I'm looking for is to drop a 100k into a fund, and
> maybe get a 6-7% safe return for a few years.
>
> I'm retiring from one job at the age of 40 (military) and
> I have about 350k equity in my home (paid for), and around
> 140k in savings bonds. My retirement check will be about
> 1700/month before taxes, and I'm going to grad school for
> 2 years. So I'd like to have a little extra coming in,
> without a huge risk of losing it's value.
>
> I'm looking at the Vanguard site, but I get lost with all
> the expenses, etc. I'm not really looking for capital
> appreciation, although it's ok if it happens! I'm looking
> to do a point or two better than a traditional CD.
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