Quote:
Originally Posted by Xist
Someone told me that I should have put my savings into Vanguard so that I would beat inflation, not lose to it while I save for a house.
The Vanguard S&P 500 (VOO) has returned 13.94% over the last 2 years. Navy Federal paid me $29.22 in interest in that time.
Simple math indicates I would have made another $1,600, which is a little weird since I have less than $8,000 in that account, but that is after paying off $12,200 in debt.
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Investing money you are saving for a short to mid term goal like buying a house makes sense compared to having that money sit in a bank account. However, personally I wouldn't put the money in a 100% stock fund like VOO (ETF) or VFINX (mutual fund) I would invest the money is something like VTINX which is a targeted retirement fund that is a blend of stocks and bonds. You can look at Vanguard's targeted funds and see which blend of stocks vs bonds you are comfortable with.
https://investor.vanguard.com/mutual...-retirement/#/
Recessions are generally a good time to buy a house - they are also the time when stocks fall. VFINX's best year in the last 20 was 32% in 2013. However it dropped 37% in 2008. VTINX's best year was only 14% but in 2008 it only dropped 11%
Personally I have money that I expect to use in 2-3 years when we retire in VTTVX which is a Vanguard's retirement 2025 fund