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Question: How would you invest $10k if you already have healthy savings (stocks/bonds), own a house and have no debt?

(Posted by: PFinance on 2009-05-19 13:40:19)

Update: over income limits for a Roth IRA, already fully max out a traditional IRA

Posted by: Lauren F on 2009-05-19, 13:51:08

Depends on what interest rate you are paying on your house, and what your overall emergency fund is. If your interest rate is above 7%, I would probably put it down as an additional payment on the house. There isn't anything in the market right now that will give you a risk free return of 7%. Also, look around your house and see if there is going to be anything that will need substantial repair/ replacement -- such as will you need a new car/ heating system/ roof/ major appliance within 2 years? If so, put the money in a money market account. But, assuming all those things aren't a problem. I would probably go with an exchange traded fund 60% and a bond fund 40% at a low cost mutual fund company such as Vangard.

Posted by: Watch IT! on 2009-05-19, 13:56:19

Vanguard has a bond fund, it's called a unit trust. Essentially you buy a piece of 25 different bonds, speading your risk. It's making about 6 points.

Posted by: oneputtsteven on 2009-05-19, 14:19:37

Consider a Roth IRA if your income is low enough to qualify. See the link below. That doesn't answer the question about how to invest the money. Since you say that you already have enough stocks and bonds I would highly recommend something that adds to your diversification AND gives you some protection against future inflation. For better or worse the US is going to borrow gobs and gobs of money over the next several years. That is going to lead lots of inflation done the road. So look for things that add diversification and hedge you against inflation. That would lead you to things like precious metals, commodities, real estate, and TIPS (Treasury Inflation Protected Securities There are some mutual funds out there that provide all 4. However, I can't point to any specific iindividual investment as that would require the delivery of a prospectus and could be consider an unauthorized solicitation of securities business. Good luck!

Posted by: Wee_Willie_Winkie on 2009-05-23, 17:51:16

In a ROTH IRA, where the gains are NOT taxable....