Protecting money for a Home down pymnt...and earning a little?

[TxSteve]

Hey all,

My first post on this forum...was just curious to see if any of you had any opinions.

I'm saving to buy a new home. I will be making this purchase in 9-12 months.

beginning next month, I will have approximately 9000/month to put toward the next home purchase.

what are opinions on what i should do with that money? i need something fairly safe (obviously) as i WILL be needing the money in a finite period of time.

i, of course, would also like to make a couple %...as having all that money sitting in a checking account earning almost no interest seems crazy as well.

if this post doesn't really fit with the forum, please forgive me and ignore it

[adios]

If your looking for low risk stocks forget about it, the time frame is way too short. Fixed income investments should have a duration of no more than 12 months since that's when you'll need the money. Therefore you need the highest return for your 12 month investment with zilcho risk of losing capital. I would think that some financial institutions might offer relatively attractive rates for 12 month CD's and bank deposits. Don't know which ones those are though.

[TxSteve]

yeah...those were my thoughts too..

unfortunately, with 9K per month, i could only put the first 9k into a CD and cash it in time..which would leave 100k or so floating around

I know there is going to be some risk no matter what i do..

[Ray Zee]

only good option is a money market fund from your broker.
or if there is a credit union in your state they sometimes pay more than money funds. mine does.

[Six_of_One]

[ QUOTE ]

unfortunately, with 9K per month, i could only put the first 9k into a CD and cash it in time..which would leave 100k or so floating around

[/ QUOTE ]

You can get CDs with a shorter term than 12 months, too. Of course, the rates suck...I work at a credit union, and with the balances you're talking about, you could get about 1.45% on a 3-month CD, and 1.80% on a 6-month.

[GeorgeF]

1) If you can really sock away $9000/month then you might be able to get a mortgage now.

2) You might consider currency diversification with www.everbank.com rather than going 100% US$. There will be cap gains/loses on money you convert back to US$.

[TxSteve]

thanks everyone for the replies. you are more or less confirming what my thoughts were

george, i'm sure i could go ahead and buy a new house now..but i would probably only have 50K or so for a down payment (from the house i currently live in)

my plan was to have at least 100K to put down to keep my monthly payments somewhat low...

as of now..the plan is to put 100K or so down, get a 300-400K loan, keep my monthly payments in the 3K range or so..

i'm not sure this is the best plan though...i suppose i need to sit down and punch some numbers and see if there are better options.

as a side note...a friend of mine with a lot of experience in the financial world has recommended investing in SPY (basically the s&p 500) as a low risk, low reward solution to at least take a shot at earning some with the money.

all thoughts are still more than welcome...i'm very new to the arena of "having money to invest" and really need to concentrate on learning more

[adios]

[ QUOTE ]
as a side note...a friend of mine with a lot of experience in the financial world has recommended investing in SPY (basically the s&p 500) as a low risk, low reward solution to at least take a shot at earning some with the money.

[/ QUOTE ]

Too short term given your time horizen, thus more or less a crap shoot FWIW.

[astroglide]

i hope you're paying taxes on poker

[TxSteve]

all of that income comes from my job..no poker income

i am not a big winner playing poker...i'm up a few hundred per month..and haven't cashed out at all...i'm just building a bankroll hoping to play higher and higher limits..