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Originally posted by redrover
Hi, I'm 19. I am a live-at-home college student. I work part time in the winter and fulltime in the summer. Alltogether my savings and money market accounts total about $7,000. I was hoping someone could put out a few suggestions as to what options I may have to invest. I do not want to risk a loss, but I want to make something better than a 1.5% return, and it also be somewhat liquid....
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Well, there are a couple of things you can do. If you can put it away for a year, you should look into treasury bills and bonds. If you don't like the idea of the government holding your money (and some of my clients don't, God bless 'em), you could put it into a CD at the bank, you won't be able to get it out until the term is up but at the very least you'll get more interest. Another option if you don't want to incur any risk, since you've got a bit more money to play with, is to put the cash in a brokerage account and invest in preferred stock. The price of preferreds is essentially stable, since they only move with interest rates. You're guaranteed a regular dividend, though make sure to see exactly how much before buying. You can also look at corporate and municipal debt, though again these will require broker fees and may be out of your price range, depending on how big the ante is. Short-term debt can be had and it is also possible (though sometimes costly in small denominations) to unload longer-term debt instruments. Realistically speaking, for somebody who will need the money sooner rather than later, you're probably best off keeping half in cash and putting half into a government-backed security, such as the EE bond.
Bob