45, on disability because I have progressive Multiple Sclerosis, don’t own anything except a 2004 toyota corolla that I’ve basically given to my dad, have no kids, been divorced 6 yrs, debts are 6+ years old, no retirement savings, can afford to park funds for a bit. I get about $1500 per month, food / bills total about $1400, live with a family member. CDs are safe but looking for a higher return of more than 3% – 4%. Looking to invest what i have from my social security disability settlement. What are my options, if any?
It’s a very subjective question. What is your risk tolerance? That’s what it boils down to really. You could invest in a “safe” mutual fund and the market could tank. Are you OK with that?
I’m sitting on some cash for exactly 2 years before needing it to buy a home. After lots of though, I chose a high yoeld savings account (5% Virtual Bank) and am waiting for a major market dip. If the dip never happens, so be it. If stocks get cheaper, I’ve pre-selected 5 biotech stocks that I’ll throw in on. That’s my silly plan.
You could put it in an S&P 500 ETF but you’ll be at the risk of a market downturn when you need the money.
This is still probably the best option but you might need to delay withdrawal until the market recovers if such a dip occurs.
You may find these links helpful:
– [“How to handle $”](/r/personalfinance/wiki/commontopics)
– [Investing](/r/personalfinance/wiki/investing)
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So I want to share some personal experiences that started out with a somewhat similar tagline. I am extremely frugal and was annoyed at the interest rate of my savings account being limited to 0.01% interest, gaining mere cents over multiple years. After what was probably a full year of analysis paralysis, planning my best strategy for some investments, I ended up deciding that lumpsum seemed to numerically work out to better gains than “dollar cost averaging” (at least as people commonly refer to it). So I ended up investing about 40% of my first year’s industry salary out of grad school/many years of continuous schooling without any income, after having saved up even more than that 40% within my bank. Needless to say, the market patterns that were extremely prevalent at the time did NOT continue as I had largely expected, and my investment date when I bought into 4 index funds with this lumpsum of my savings, ended up being on almost perfectly the last day of the bull market that had been running for many years. Today, those 4 index funds are down 10% (but went all the down to 30% below the initial invested sum at one point).
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