money matters

I wanted to put away about $100 a month into something that is secure and will grow.  I'm getting close to my 40's and I'd like to save this money into my 60's if I ever get there.  

Does anyone have any suggestions?  Maybe from their personal experience.

Your ideas please.
ee4itpro2Asked:
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PlantwizConnect With a Mentor Commented:
Excellant question about investing/saving for the future and something I minister many people on during our FPU (Financial Peace University) classes (See. Dave Ramsey.com)

The fact that you have isolated $100 per month is a great way to begin.  I would ask if you have an emergency fund in place first (for obviously emergencies) because once you begin to build wealth, you won't want to unplug those investments to fix the car.

Because of the forum format, it would become a very lengthy post to advise on every detail of your situation or even a summary of your specific situation.  I can recommend from experience including personally following this plan that Dave's seven steps work.

As I mentioned, I do not get paid for this, it is a ministry we offer and my time is in the classroom 1 time a week for 13 weeks (almost run concurrent session though) and before, after and during the week I will help folks answer their questions.

The easiest thing for an online quesiton is to find someone you trust in your area who you can sit down with.  Preferrably and ELP (Endorsed local provider) as they will TEACH you about your options and not bully you into the item that they make the most money from you on.

Dave's site lists ELP's who you can pick from to get you started, or if you want to try it on your own, schedule a meeting and see how it goes with someone of your choosing.  Remember, NEVER invest in something you do not 100% understand.  Take your time and reflect on what the person told you and decide from that point if this is the best thing for you.

I lived like 'no one else' long before stumbling on Dave Ramsey, but he's been successful in marketing and assembling information in the same format that I learned when I was young.  Plus, I picked up a few things too.

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HooKooDooKuCommented:
Typically, the best bet for some relatively safe long-term growth is getting the money put into a mutual fund of some sort.

But I am not familiar enough with the industry to know where you could start a mutual fund with only an initial $100.  You more likely need about $5,000 to $10,000 to avoid paying extra fees.

I've used Vanguard for some mutual funds because when I had a 401k with Vanguard and some place else, the Vanguard funds did better (that is to say "lost less money" as the comparison was during a down economy).
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aburrCommented:
The easiest good way is to get a good no-load mutual fund
Vanguard is one such. Consider investing in an index fund. Their cost of ownership is low.
Insured CD’s are safe but the current interest is almost non-existent
Bonds will give you the best current interest rate but have an inflation risk
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aleghartCommented:
"safe" is tough.  A single FDIC-insured savings account is insured up to $250,000.  But the current rates are below 1%.  So, you may be outpaced...your dollars having less value to buy when you want to use them.

Something with higher interest will not have the same level of principal protection, but might offer the possibility of higher return.

Buying treasurys, you rely on the full faith and credit of the issuing government...and no insurance.  Bonds backed by the USA have been "safe" enough for most people.  But, you'd need at least a 7-year note to break 1% yield (currently 1.29).  A savings account at 0.9% APR would have better utility...since you can "cash out" at any time in minutes.

Small I-bonds (savings bonds) can be purchased in paper starting at $50, or electronically at any value.  Minimum 1-year holding, 5-years for no penalty, up to 30-years of earning interest.  They're quoting 3.06% through April 30, 2012.  But the rate fluctuates, and is two-part: fixed + indexed.

The fixed rate (good for the whole life of the bond) is currently 0.00%, and can never go lower.  But, the "value" of your dollar can certainly go down, since you are accruing no interest.  The indexed inflation rate is 1.53% as of Nov.1, 2011.  New rates are published every Nov. & May.



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tliottaCommented:
If you want to get started NOW, then just get moving and make regular transfers or deposits into a basic savings account. Ideally, it will be an auto-transfer from whatever account you already have.

There's no doubt that it's not going to gain big returns on interest, but that's not the point right NOW. The point is to get started doing it NOW. You have time to transfer funds later when you either know what you want to do or have a big enough reserve to make a difference. Getting the $100 out of your normal spending habits NOW is more important than any interest it'll return.

Tom
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CallandorCommented:
If you have a long time horizon, which is true in your case, a steady purchase plan into a stock index mutual fund will probably give you a better return than Treasurys or bonds.  You will be subject to more volatility, but regular purchases will dollar cost average the price, buying more shares when the price is low and buying fewer when the price is high.  In 20 years, you should have a nice return, but the key is not to panic when others are selling, because you can't time the markets.
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PlantwizCommented:
Hi ee4itpro2,

How are you doing with this question and the answers provided?  Do you need more assistance?
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