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24HourForums.com > Supported Forums > 24's Money Business > If you could guarantee 5% annualy, would you sock some money away there and how much of your pertfol |
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MrPaseo Original500© Member  Peace Protector
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Incase that all didn't fit: If you could guarantee 5% annualy, would you sock some money away, and how much of your portfolio? Thanks, Ray
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fluffydogconnoisseur Pioneer100© Member 
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Depends on many things... How long is your money tied up with this investment? Any tax advantages? What is this money saved for (retirement, college fund, etc.)?
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CarlWohlforth Original500© Member 
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10 year US Treasury bonds are at close to %4.6. If you hold them 10 years you will get all your money back. Since they are backed by the US Treasury they are as guaranteed as you can get. I don't own any. There are stocks that pay dividends around that amount. I'm invested in many that pay a lower amount. That is because I hope they will increase the dividend each year and I also hope the stock price will increase. I like Chevron/Texaco which currently pays over %3. Everybody should own some oil stocks. How much is %5? Considering that inflation is currently around %3.5 an investment that pays %5 is gaining you %1.5/year in purchasing power. So you might consider something like a Vanguard Inflation protected securities fund. There you get something like %2 above inflation. So your funds are adjusted for inflation each year. I am invested in that one. I hope inflation doesn't increase but if it goes over %5 someone stuck in a %5 CD would actually be losing money.
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MrPaseo Original500© Member Peace Protector
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BTW. ING Direct offers a CD ladder program that pays a minimum of 5% right now. They have CD's (Any dollar amount) for 12 months, 18 months, 24 months, 36 months...etc up to 60 months. The thought process is like this. You start with 500 dollars. You invest 100 dollars into five CDs, so it looks like this. CD1: $100 1 yr CD2: $100 2yr CD3: $100 3yr CD4: $100 4yr CD5: $100 5yr The thought behind it is, the five year CD offers a higher rate of return, however, if you do not want to tie your money up for a five year stint, then you would build a ladder. This is how it works, your initial purchase will be 500 dollars pread over 5 years earning anywhere from 5 to 6%. Keep in mind, any dollar amount for any amount of years, the system at ING is totally flexable. After 12 months the first CD matures, you then have the option to use the cash or re-invest it. At this point you would invest in a 5 year CD, that would place your new CD to mature 12 months after your oldest CD. The bottom line is, you would have a revolving 5 year CD plan that 1/5th of it would mature every year (Indefinantly). With the suggestion to add money to the CD (say add 100 dollars) every time it matures over a life time you could have a pretty nice collection... granted your profits are not eaten up by inflation. This might be a good idea for your emergency fund money, or at least part of it, maybe a supplamental college fund or something that you might need in a few years but are not sure of when you will need your money. Somehow this has to be usefull. One great thing about ING Direct CD's is you can make them for any amount. For example, you could have a 4 year bond for $36.47 if you want. Most banks etc require incraments of 500 or 1000 up to a million dollars to purchase their CD's. What do you all think? Ray Last edited on 07:17 pm by MrPaseo |
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CarlWohlforth Original500© Member
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I like ING and I like laddering of bonds. Sounds like a great way to start building up significant savings, especially if you can add the $100 each year.
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Pyrite Original500© Member 
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Look at FAX. Much better than 5% Also O, NNN, NFI (special situation developing), ETP, MMP, IGR, SNH Growth PLUS return on investment. I sold my bonds. Kept em for a while but no longer with dollar problems and debt looming, they are gone. Last edited on 12:13 am by Pyrite |
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