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Hi Taylor
- I'm looking to buy a house within the next two years and want to
make sure I'm growing my money as fast as I can. I've currently got
my funds in a savings account with a 1.4% APY, but is there another
type of account that will get me better returns? I'm putting around
$1,000 a month into the account. - Bradley
Hi Bradley - Glad you're building up your cash reserve instead
of taking on a big mortgage. Unfortunately, the only way to speed
up your yield is by taking on more risk. 1.4% is probably as good
as you'll find, and any other investments will subject you to too
much volatility.
With a truncated timeframe like the one you're working on, there's
not much to do beyond what you're already doing. Keep putting money
in savings, make sure it's liquid and ready to move, and then find
ways to increase the amount you put away each month. If there are
corners you can cut or ways to earn a little extra, that's the best
way to reach your goal more quickly.
Until you have a significant amount in your savings account, you shouldn't
even be thinking about the yield. Yes, you want an account that provides
a good return, but you should be focusing your efforts on the actual
earning and saving. The harder you work to put money into your account,
the more the amount will grow and the more your yield will come into
play. Ideally, you'll start putting in $1,500 and then $2,000 each
month. Then, before you know it, that 1.4% will start looking a lot
better.
Remember that, typically, higher returns come from somewhat risky
investments, and those investments often hurt your bottom line before
they help. This makes long-term stock investing work well, but short-term
saving doesn't fit the same mold. It's important to adopt this mindset
as you continue earning, saving and investing.
I wish I had a more exciting answer, but it seems like you're aiming
for a practical approach and I'd hate to mislead you. Stay the course,
look for ways to spend less and save more, and you'll have the money
you need sooner than later. Good luck finding your new home! |
| Disclaimer:
Information presented is for educational purposes only and is not
an offer or solicitation for the sale or purchase of any specific
securities, investments, or investment strategies. Investments involve
risk and, unless otherwise stated, are not guaranteed. Be sure to
first consult with a qualified financial adviser and/or tax professional
before implementing any strategy discussed herein. To submit a question
to be answered in this column, please send it via email to Question@GoFarWithKovar.com,
or via USPS to Taylor Kovar, 415 S 1st St, Suite 300, Lufkin, TX 75901.
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