Money Market Investing and New Home Purchasing

[cyfan21]

As of the 27th of this month I will have paid off all of my student loans.

I'm looking for investment options that are inline with my short-term and long-term goals. My net take home is $52K and my Haverkamp apartment rent is $1,050.00/mo.

Long-term wise I have a Vanguard Index fund and my I'm in the process of setting up a SEP-IRA through Principal.

Short-term I'm wanting to save up to buy a starter home. I know I need to put 20% down for a home that ranges between $150-$200K. I'm in the process of setting up a Capital One 360 saving account that has 1.7% APY.

My research suggests the Capital One Savings account offers the best Money Market Account interest rate that I can qualify for (assides from BMO Harris bank at 1.95% APY). I'm choosing a money market account simply for the fact that you can continuously contribute to it and close it at any time without any fee's.

My question is what others are doing or have done when looking to maximize their ROI and what deals are out there that I may be missing out on. Also if you've done business with BMO Harris bank or what have your experiences been?

Thanks in advance.

 

[Bewilderme]

Just YOLO your life savings on Tesla stock no worries


but seriously respect on your plan - sounds good to me.

 

[Sigmapolis]

As of the 27th of this month I will have paid off all of my student loans.

I'm looking for investment options that are inline with my short-term and long-term goals. My net take home is $52K and my Haverkamp apartment rent is $1,050.00/mo.

Long-term wise I have a Vanguard Index fund and my I'm in the process of setting up a SEP-IRA through Principal.

Short-term I'm wanting to save up to buy a starter home. I know I need to put 20% down for a home that ranges between $150-$200K. I'm in the process of setting up a Capital One 360 saving account that has 1.7% APY.

My research suggests the Capital One Savings account offers the best Money Market Account interest rate that I can qualify for (assides from BMO Harris bank at 1.95% APY). I'm choosing a money market account simply for the fact that you can continuously contribute to it and close it at any time without any fee's.

My question is what others are doing or have done when looking to maximize their ROI and what deals are out there that I may be missing out on. Also if you've done business with BMO Harris bank or what have your experiences been?

Thanks in advance.

A few points --

1.) Congratulations on paying off the student loans! Good job!

2.) Your overall plan is sound.

3.) I do not have any particular experience with any of those companies you list above. However, the rate of interest you are quoted seems "market" --



0.1% or 0.2% is not going to make much of a difference considering how long you want to hold money in those accounts before converting to a down payment.

Therefore, just pick whichever is convenient or you like the most.

 

[cyfan92]

Sounds like a great plan to me. The only way to really make more money over a short term is to take a crazy amount of risk

 

[DeereClone]

You have a good plan.

I’ve been putting money aside monthly in a taxable account with Vanguard. 75% goes into their Prime money market account (1.70% right now) and 25% goes into a few balanced mutual funds. I’ve been happy with this mix as it gives me some participation in the market without a ton of risk.

 

[capitalcityguy]

We've riding a record long bull market at the moment...how much longer can that last??? . I would be weary of trying to do much more than what you've already discussed doing to hold cash short term.

Overall, nice work at this point in your life!

 

[goody2012]

We've riding a record long bull market at the moment...how much longer can that last??? . I would be weary of trying to do much more than what you've already discussed doing to hold cash short term.

Overall, nice work at this point in your life!

People have been saying that for years. The only truth is we're one day closer to a recession than yesterday, but when that happens is anybody's guess.

 

[capitalcityguy]

People have been saying that for years. The only truth is we're one day closer to a recession than yesterday, but when that happens is anybody's guess.

Regardless how long people have been saying it (hopefully they weren't saying it "for years" since the record was hit less than a year ago -- last March), it doesn't change the sentiment. It would appear to be a very risky time to get aggressive or too creative with funds that are meant to be invested short-term.

I can't tell if you disagree.

 

[Dr.bannedman]

You have a good plan.

I’ve been putting money aside monthly in a taxable account with Vanguard. 75% goes into their Prime money market account (1.70% right now) and 25% goes into a few balanced mutual funds. I’ve been happy with this mix as it gives me some participation in the market without a ton of risk.

wait so subsidies and enough money to invest in your future? how does this work?

 

[SoapyCy]

Regardless how long people have been saying it (hopefully they weren't saying it before it was actually true), it doesn't change the sentiment. It would appear to be a very risky time to get aggressive or too creative with funds that are meant to be invested short-term.

I can't tell if you disagree.

Then sell short and make money in the way down. I tried that last time there was a hiccup and lost a few $k.

 

[madguy30]

Do you really need to put down 20%, as in a requirement? Thought that was something that was ideal, but negotiable.

 

[NodawayRiverClone]

Discover Bank and and other access through Edward Jones also pay 1.7% on Money Mkt. As long as Fed holds interest rates steady, that should be the the approximate return on MM. As the balance grows, you could also consider a 12-month or so certificate of deposit.

 

[goody2012]

Regardless how long people have been saying it (hopefully they weren't saying it "for years" since the record was hit less than a year ago -- last March), it doesn't change the sentiment. It would appear to be a very risky time to get aggressive or too creative with funds that are meant to be invested short-term.

I can't tell if you disagree.

I don't disagree that if you're holding short-term you shouldn't be in the stock market, but it shouldn't have anything to do with being "close" to a recession.

 

[SpokaneCY]

As of the 27th of this month I will have paid off all of my student loans.

I'm looking for investment options that are inline with my short-term and long-term goals. My net take home is $52K and my Haverkamp apartment rent is $1,050.00/mo.

Long-term wise I have a Vanguard Index fund and my I'm in the process of setting up a SEP-IRA through Principal.

Short-term I'm wanting to save up to buy a starter home. I know I need to put 20% down for a home that ranges between $150-$200K. I'm in the process of setting up a Capital One 360 saving account that has 1.7% APY.

My research suggests the Capital One Savings account offers the best Money Market Account interest rate that I can qualify for (assides from BMO Harris bank at 1.95% APY). I'm choosing a money market account simply for the fact that you can continuously contribute to it and close it at any time without any fee's.

My question is what others are doing or have done when looking to maximize their ROI and what deals are out there that I may be missing out on. Also if you've done business with BMO Harris bank or what have your experiences been?

Thanks in advance.

Did exact same thing for new house down payment. I chose Discover Bank which was offering 2% and plunked the 20% down payment there. Its safe, secure and readily available and while 2% isn't MUCH, it's way more than anywhere else pays for the safety. Discover is probably closer to 1.7% now but still better than a stick in the eye.

 

[ianoconnor]

Do you really need to put down 20%, as in a requirement? Thought that was something that was ideal, but negotiable.

Definitely not a must. If you put less than 20%, you'll pay PMI on a conventional mortgage.

 

[capitalcityguy]

I don't disagree that if you're holding short-term you shouldn't be in the stock market, but it shouldn't have anything to do with being "close" to a recession.

I wasn't talking about economic cycles. I was referring to stock market cycles.

 

[goody2012]

I wasn't talking about economic cycles. I was referring to stock market cycles.

The same rationale still applies

 

[BoxsterCy]

Did exact same thing for new house down payment. I chose Discover Bank which was offering 2% and plunked the 20% down payment there. Its safe, secure and readily available and while 2% isn't MUCH, it's way more than anywhere else pays for the safety. Discover is probably closer to 1.7% now but still better than a stick in the eye.

Yah, pretty much all of the accounts that were offering the 2%, like my American Express Savings, are down to 1.7% but still beats the heck out of the interests banks pay if their low rates even count as "pay".

 

[BCClone]

Check with FHA. You won’t believe the amount of loans they are making. Seen them on 200k houses in a town like Mason City. Need about 3-5% down it appears and with the terrible way loans and realtors are screwing with things. You don’t even need that due to the 6% and larger closing kickbacks.

 

[dualthreat]

I'm in a similar situation to the OP and looking to buy first home. My bank actually encouraged me to put $0 down. I am buying a fixer upper and said it would make better sense financially to put my savings toward the renovations. My interest rate wasn't effected and my monthly payment barely would be.