where should I put my cash savings?

**Goldy** · 11-25-2012, 02:06 PM

Well, since its money you dont need yet have you thought about a lending club account? The money would be tied up for 3 years but you would get a nice return on it. I'm currently getting 16.5%

**disneysteve** · 11-25-2012, 02:16 PM

What is this money for, and when?

You say you are maxing your 401k. What % of your gross annual income does that represent? Ideally, you should be saving at least 15% for retirement. If you aren't, I'd open a Roth IRA if you are eligible and use $5,000 to fund it for 2012 and hold another 5K for 2013 which you can deposit in January.

Do you have any debt?

Why do you feel the need to have a 12-month EF?

**kaleida** · 11-25-2012, 02:42 PM

What is this money for, and when?
>> I don't know. I don't have an urge to spend it on anything specific yet. Maybe I'll get the urge someday, who knows. Buying a house with cash appeals to me a lot more than buying a house with a mortgage, so that's a possibility that's about 9 years away.

You say you are maxing your 401k. What % of your gross annual income does that represent? Ideally, you should be saving at least 15% for retirement. If you aren't, I'd open a Roth IRA if you are eligible and use $5,000 to fund it for 2012 and hold another 5K for 2013 which you can deposit in January.
>> I'm saving more than 15% for retirement, but I will keep the Roth IRA idea in mind anyway ... thank you!

Do you have any debt?
>> No debt.

Why do you feel the need to have a 12-month EF?
>> I don't feel that ... I couldn't picture needing an emergency fund that's bigger than 12 months. So it's more like the maximum amount I feel comfortable having in an emergency fund. Above 30K I start to feel uncomfortable that it's sitting around pointlessly.

**disneysteve** · 11-25-2012, 02:58 PM

Originally posted by kaleida View Post

I'm saving more than 15% for retirement

No debt.

I couldn't picture needing an emergency fund that's bigger than 12 months.

Sounds like you are in good shape. I'd start feeding that money into some good quality, no-load, low expense mutual funds (or ETFs) based on your overall asset allocation plan.

**xiaogenie** · 11-25-2012, 06:27 PM

I think firstly you need to know what you are saving them for? Emergency fund, vacation or for retirement. With this in mind you will know whether you need it long term or short term. For long term i advice you to put inside an investment account, for short term i normally put inside money market funds in order to earn higher interests as compared to banks.

**kaleida** · 11-25-2012, 06:58 PM

I think I already mentioned I don't have a specific use in mind for it yet. This money exists because I earn more than I spend. That's all there is to it...there wasn't a savings goal prompting me to do this, it's just an unavoidable side effect of earning more than I spend.

I will probably buy a car at some point in the next few years - about 25K. There will also be an emergency fund. Beyond that is just TBD

**Ramose** · 11-26-2012, 03:49 AM

Originally posted by disneysteve View Post

Sounds like you are in good shape. I'd start feeding that money into some good quality, no-load, low expense mutual funds (or ETFs) based on your overall asset allocation plan.

I agree with this advice.

**snarkfinance** · 11-27-2012, 11:12 AM

Wow, are you in a fortunate situation or what? Seriously, I think you may be the walrus.

With substantial savings rising at a substantial rate, and investments towards retirement in excess of the 15% mark it seems you have quite a few options. It does not appear that you are well versed in investing, so I would not gamble that money away in the market through equity (stock) purchases. I would establish a brokerage account at a Fidelity or T-Rowe Price type place, and invest, per the prior advice, the money (including your emergency fund) into no-load, low expense funds. Perhaps you place the emergency portion of this money (12 months is a bit excessive, perhaps 6 months) into a bond-based or money market fund, where it is likely to receive interest in excess of a savings account but still be very safe. The rest you can invest in accordance with your own comfort level for risk.

**nimisht** · 11-27-2012, 01:54 PM

16.5% is not bad.

**snafu** · 11-27-2012, 08:12 PM

I too suggest you open a low fee brokerage account with the expectation of moving a pre determined sum monthly into a low cost ETF [Exchange Traded Fund] or Mutual Fund [MF] Bond and Equity/Dividend investments. Before making specific choices it's important to know what is held in your retirement account. 2nd is to assess your RISK tolerance as you need to be able to sleep at night without worrying about how your investments are doing. There are many knowledgeable posters here who offer suggestions wanting nothing more than for you to be a successful investor. Ultimately, the choices are yours with some level of risk. There is no 'one size fits all' program as each of us have different personal values and expectations.

Keeping major sums in savings accounts, Certificates of Deposits [CDs], Money Market in this low interest environment reduces your buying power as the rates do not keep up with inflation. Investing in Bond ETFs or Mutual Funds have aspects of risk specific to the type of Bonds they hold or International issues plus anytime interest rate increases are suggested...Bonds lose values. Equities, called stock come in dozens and dozens of categories. Those that pay dividends are mostly those that make profits.

**Blessed** · 11-28-2012, 05:10 AM

Originally posted by Goldy View Post

Well, since its money you dont need yet have you thought about a lending club account? The money would be tied up for 3 years but you would get a nice return on it. I'm currently getting 16.5%

I've never heard of this. Could you share some details please.

**Goldy** · 11-28-2012, 03:53 PM

Originally posted by Blessed View Post

I've never heard of this. Could you share some details please.

Without totally hijacking this thread, Lendingclub.com is a place where you go to lend money to borrowers that you pick in small $25 dollar incriments and you basically take the role of the bank. So, you get all the benefits and all the risk, good rates but if they default you eat it. There are a few posts on the forums that you can search for.

In my opinion its great if you dont need the money at your fingertips. There is a secondary market where you can sell your loans if you need the money fast and dont want to wait for the loan to mature but I'm sure you will take a hit on that end.

**Goldy** · 11-28-2012, 03:54 PM

Originally posted by Blessed View Post

I've never heard of this. Could you share some details please.

Oh, one more thing, you need to see if your state allows you to participate. Its all on the website.

**marco_salinas** · 11-28-2012, 09:48 PM

You can open savings account through a bank to save your extra money in the future. I think that is the best thing to do.. or you can invest through a business if you like.

where should I put my cash savings?