The Best Place To Put Savings

A Twitter listener asks Dave where the best place to put savings is. Dave points out his favorite ideas.

QUESTION: A Twitter listener asks Dave where the best place to put savings is. Dave points out his favorite ideas.

ANSWER: Two things we talk about around here are saving and investing.

Investing is when you leave it alone five years or longer, such as retirement, college planning or buying a house. For those things, I go to growth-stock mutual funds with at least a 5 – 10 year track record, and spread the money across four types of funds: growth, growth and income, aggressive growth and international. Once you’re out of debt, you’ve maxed out retirement, and you’re going to do some mutual fund investing outside of all that, I’d start buying real estate for which you pay cash.

As far as saving goes, when you are saving money for Christmas or vacation or an emergency fund, you’re not really going to earn anything on that kind of money. You’re just keeping it in a separate and safe place so it doesn’t accidentally get spent.