Please advise: What to do with 30K

**Hedy** · 06-20-2007, 10:24 AM

What's your 401K and IRA looking like? Do you have any undergrad debt? Consumer debt/car payments? What do your DSpouse's finances look like?

**jIM_Ohio** · 06-20-2007, 11:21 AM

Originally posted by 403203 View Post

Hi everyone and thank you for your great comments. For the past weeks since I joined this forum, I have truely enjoyed reading many great posts. I am hoping to get your advice on what to do with 30K I have saved. I am 29, just married, and will be going to a graduate school for next three years on a full scholarship which will provide me with living expenses, housing payments, and etc. So, what do you suggest that I do with 30K I have on savings if I would like to maximize my return? I do not need to withdraw this saving for at least three years from now. Thank you!

Do a 30-70 stock bond portfolio. 30% S&P 500 type index or large cap fund with low turnover, and 70% US bond market index or similar intermediate term bond fund.

In 12 months if you know you'll be cashing out in 2 years, selll 10% of stock and 20-80. 12 months later sell another 10% and go 10-90. 12 months later sell the remaining 10% equity.

The closer you get to needing the money, the less you want in equities (stocks). this could generate anywhere from a 15% return each year to losing around 15%. I think a 6-7% return is more likely.

**Scanner** · 06-20-2007, 01:20 PM

I second Jim's sentiment, some sort of balanced arrangement - the key statement being you don't need the money for 3 years.

Assuming you will need it for a big purchase then and not retirement.

I think a mutual fund like Vanguard Wellesley fund or some other balanced fund would be okay for a year. . .however, you run the risk of that fund incurrring a loss for one year. Which year? You never know. . .it could be the year you need to withdraw or the first.

If you are cool with that and could deal with a 0-10% loss one year, I'd stick in there.

Another option that's a tad safer, if you are concerned with principal loss, is to stick the money in a zero coupon bond fund. American Century offers these and they target certain dates. Don't expect much return and taxes can be high on your earnings.

Here is a link:

Fund Overview: Target Maturities Trust: 2010 - American Century

It looks like you can expect 4-8% but you could get hammered on taxes so proceed with some accountant advice.

Please advise: What to do with 30K