How Do I Invest Wedding Money?
A wedding can provide newlyweds with a sizable nest egg, when guests give cash as gifts. Before blowing it all on a luxury honeymoon, consider setting aside a portion of the money for your future. The younger you are, the more powerful a small investment will be. Even at a modest 2.5 percent yearly return, every dollar you set aside today will have doubled in 30 years.
Mutual Funds: Safety in Numbers
Investing in the stock market can be risky, but you can enjoy the high gains (increased value) that are possible with mutual funds that spread the risk across hundreds of different stocks and bonds.
Most companies offer a variety of mutual funds, balancing risk and the potential of fast growth in different proportions. You can invest in mutual funds through an IRA or a 401(k) retirement plan with your employer to ensure that your gains don't subject you to taxes each year.
Savings Bonds: Like Money in the Bank
Backed by the U.S. government, savings bonds are generally considered to be one of the safest investments. These should be viewed as long-term investments (as they mature after 30 years), but if something comes up, you can cash in a savings bond after just one year while still making a profit on your investment. The paper savings bonds your parents may still have were phased out some time ago. Today, the U.S. Treasury issues savings bonds digitally.
Real Estate: Building Your Future
Even if you don't have the down payment you need for your dream home, you may be able to get there in a few years by investing in a smaller home today. While 20 percent is usually the preferred down payment, you may be able to get a home with just 5 percent down, depending on income, credit rating and the house you intend to buy.
This means $5,000 can open the door to a small home. The equity in that home can lead you to a larger home in a few years, particularly if you have a knack for home repairs.
myRA: A Portable Retirement Fund
Retirement may seem far away now, but your future self will appreciate the funds you invest today. With a myRA, you and your spouse can each contribute up to $5,500 per year, including lump sum payments.
Available directly from the federal government, a myRA can be used regardless of where you work, giving you the same interest rates as the U.S. Government Securities Fund, which was 2.31% in 2014. You can continue to add to a myRA directly from your paycheck or from your savings account. If you need the money later, you can withdraw what you invested without paying taxes or penalties.