maschinenbau
maschinenbau Dork
11/8/18 10:31 a.m.

I recently moved and will be in a rental house for at least another 9 months. I am about to close on my old house. What is an easy way to invest that money, with medium to low risk, until I'm ready to buy again in about a year? Needs to be flexible enough so that I can jump on the right house at any time, but just outside of my direct access so I don't end up with like 10 Miatas.

bmw88rider
bmw88rider SuperDork
11/8/18 10:39 a.m.

So, I'm in the exact same situation and I put mine in a savings account with limited access to it. I used the American Express Savings account because I do a lot of business with them but there are many of those out there. It earns at least a little bit of interest and I can get it out when the timing is right. 

chaparral
chaparral Dork
11/8/18 10:39 a.m.

Bonds with maturities at about the date you plan to be back in the market? They can always be sold; make sure you buy widely-traded ones.

Dr. Hess
Dr. Hess MegaDork
11/8/18 10:43 a.m.

T-Bills.

bearmtnmartin
bearmtnmartin SuperDork
11/8/18 11:00 a.m.

Hookers and blow

MadScientistMatt
MadScientistMatt PowerDork
11/8/18 11:07 a.m.

This sounds like a job for a savings account or a money market account. The latter is kind of an in-between step between a savings account and bond fund.

JmfnB
JmfnB MegaDork
11/8/18 11:07 a.m.
STM317
STM317 SuperDork
11/8/18 11:15 a.m.

Some online savings accounts are earning over 2% these days.

CDs are doing better all the time, but you're locked in for a predetermined amount of time with those.

Keith Tanner
Keith Tanner MegaDork
11/8/18 11:35 a.m.

An aircooled 911.

Actually, that's semi-serious. A friend had a chunk of change set aside for university but he knew he wouldn't need it for a couple of years. So he bought a Sprite. Drove the Sprite, had adventures and when it was time to sell, he called up the phone number on one of the "if you ever decide to sell" cards that had been left on the car over the years and he got his money back. Of course, at the time the car was probably only 25 years old instead of 50, but you get the idea.

maschinenbau
maschinenbau Dork
11/8/18 11:36 a.m.

In reply to Keith Tanner :

That's exactly the answer I didn't want to hear and now cannot un-hear.

Woody
Woody MegaDork
11/8/18 12:11 p.m.

Maserati BiTurbos. Values can only go up. 

dculberson
dculberson UltimaDork
11/8/18 12:21 p.m.

That's a tough one. Given the requirement to be able to pull it out at any time, I wouldn't say T-Bills are a good fit. CDs also have terms to their deposits. Something like a money market savings account would work - some of those are yielding around 1.5% - but there are also high yield savings accounts around 2% online right now. A quick google search turned up Goldman Sachs yielding 2.05%, Synchrony Bank yielding 2.05%, and Barclays yielding 2.05%. Any of those would work, and are going to be a safer bet than a Sprite or 911. But I hate to see good money yielding 1.5 - 2%.

Are we talking a paid off house worth of money or a down payment's worth? Because if it's a down payment's worth then a savings account is going to be your best bet. If it's much more than that, what would you think of splitting it between two accounts - one equal to a 20% down payment on a target price range house, deposited in a very safe account like the savings account, and the other holding the balance of the money put into something longer term like a stock market index fund? If you want to get fancy with it, put $5500 of it in a Roth IRA and you can withdraw the $5500 tax and penalty free at any time in your life, you only pay the tax and penalties on any gains. (And no penalties if withdrawn after 59 1/2.)

That all sounds daunting but it could be set up with Vanguard with no fees and done in under an hour.

failboat
failboat UberDork
11/8/18 12:48 p.m.

Not sure if this would even work for you, but we do deferments into an acorns investing account. Primarily just roundups from any bank transactions to the nearest dollar get pushed to the account, and a small weekly deposit pushed over as well. We just let it grow to cover our vacation cost every year.  I don't see how that wouldn't be a decent place to just drop a chunk of money you want to leave alone for a while. 

A few clicks on the app on my phone and I can initiate at transfer back to my bank account at any time, usually just takes a couple days to go through. 

But seriously the money market suggestion above may be an easier option to just set one up at your bank. 

Robbie
Robbie UltimaDork
11/8/18 1:30 p.m.

REIT (real estate investment trust) fund. May not appreciate hugely but also less likely to tank than the stock market, and it pays pretty good dividends.

Other options would be things like utility stocks. low risk and reward but good dividends generally.

Also, I would implore you not to worry about the risk of whatever you buy going down. Mostly this stuff all moves together so if your investment goes down home prices likely did too and vice versa. Plus, you can always decide NOT to sell your investment and just buy the now lower-priced home with less down payment if the markets do crash between now and next year.

that aircooled 911 however...

wearymicrobe
wearymicrobe UberDork
11/8/18 1:30 p.m.

You are all insane split FDIC insured accounts and don't touch it for 6 months so that it is seasoned for the purchase of the next home. 

BoxheadTim
BoxheadTim MegaDork
11/8/18 1:51 p.m.

What wearymicrobe said - stick it in FDIC insured online savings accounts and slowly back away from the computer.

Unless this is gambling money and it's OK to lose part of it, any form of investment in the current climate fails the "soundly sleep at night" test.

Duke
Duke MegaDork
11/8/18 1:56 p.m.
Woody said:

Maserati BiTurbos. Values can only go up. 

And I assume BiTurbos come in 90-day, 6-month, and 12-month denominations, too.

dculberson
dculberson UltimaDork
11/8/18 2:03 p.m.
Duke said:
Woody said:

Maserati BiTurbos. Values can only go up. 

And I assume BiTurbos come in 90-day, 6-month, and 12-month denominations, too.

More like 30 feet or 30 second denominations. I almost typed "demoninations" which kind of makes more sense.

AngryCorvair
AngryCorvair MegaDork
11/8/18 2:47 p.m.

wheelsmithy
wheelsmithy SuperDork
11/8/18 3:01 p.m.

I was in a similar situation 2 years ago. I talked to my finance guy, who has done extremely right by me, and he said bank account. 

In hindsight, I'd say go credit union. I bounced around to that eventually, and they(mine anyway) have marginally better interest rates, free checking lower fees if you bounce a check, etc, etc. I recommend looking into one. Nothing you do will set the world on fire, but safe is good right about now.

maschinenbau
maschinenbau Dork
11/8/18 3:26 p.m.

Thanks for the input everyone. Sounds like my "high-interest" checking account through my CU might be the way to go. 

Guess I'll just need to exercise some self-control to not end up with a GRM-themed traffic jam in the driveway.

Alternatively, what's GRM's best guess for the next "air-cooled 911" hot investment car?

BoxheadTim
BoxheadTim MegaDork
11/8/18 3:33 p.m.

Actually, unless you need/want to be able to walk into your bank and get a check or a suitcase full of cash for the next purchase, I'd just go to bankrate.com and pick the best FDIC insured onine savings account(s). Most brick & mortar places can't or won't compete.

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