Many recent college graduates have asked what is the best investments for their savings, ranging from a few to tens of thousands of dollars.
The best suggestion is to park your money in a liquid, high interest-bearing bank account while you read up on different types of investments and determine your financial plans and risk tolerance. There are several banks with very high paying interest rates like Emigrant Direct (3.25% APY) and ING DIRECT (2.80% APY).
The biggest mistake you can make is to look at the stock market and without doing any research, sink your money in the market thinking you can double your money in a short period of time. This type of irrational behavior is just blind gambling. If you don’t know what you’re doing, don’t do it. It is very important to prevent disastrous mistakes that can hinder your way to financial success. I know, because I have made mistakes in the past.
With that said, I hope you take the time to plan your goals. Park the money in a high interest savings account to earn interest while you do some research. First, find out your risk tolerance. If you can tolerate investment vehicles with high volatility, you could read up on the stock market or real estate investments. If you cannot tolerate much volatility or have the time to do research, go with mutual funds, high-rate CDs, or safe bonds.
Ultimately, you’re going to be the best financial planner for yourself. It does not have to take up much of your time. Spend a few hours planning for your future and it will make a big difference in the long run. Take an hour or two every month to make sure you stay on the right path. You can still manage your finances while looking for a job or working full-time. Before you know it, you will be well on your way to reaching your financial goals.