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Learning to Invest / Investing Beginners

URL:  https://boards.fool.com/diane-welcome-to-the-fool-in-addition-to-the-34094227.aspx

Subject:  Re: Limited funds Date:  12/28/2018  11:00 AM
Author:  TMFSandman Number:  29215 of 29343

Diane,

Welcome to the Fool. In addition to the advice you got regarding beginning your journey into stock investing, I'd also recommend schooling up on how to get the maximum return on your cash while you're saving up. Where is this $1,000 right now? What kind of return are you currently earning on it?

You can get a 2.2% return on that money if you put it in a high yield savings account like synchrony.com or ally.com. You can get even higher than that (around 2.4% right now) if you invest that money into one month or three month US Treasury Bills, and the interest from the treasury bills will be shielded from state tax as well, boosting its effective yield even higher. You can buy treasury bills with no commission both at Fidelity and at Schwab, as well as buying directly from the source at treasurydirect.gov, though I'd recommend a retail brokerage account in case you want to easily sell before maturity.

Will this make you rich? No, but maximizing the return on your cash is an important building block in your investing knowledge, and earning $22 a year on your $1,000 for little effort is much better than earning $2 a year. In the mean time, read up on the stock market, investing, and investigate index fund investing and why that's probably a good way to go unless you want to devote a lot of time to this. Post questions here as you have them.


Mike
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