Originally Posted by BlacKidLA
Out of college, entry level position so I'm not making much. I am tucking $600 away a month into a savings account but I was wondering if there is a way I could increase my returns by doing something active with my money.
P.S: I've purchased a few books: "Personal Finance for Dummies", "Investing for Dummies", and "Rich Dad, Poor Dad" all of which I have just started to read. Are these good books to follow?
As stated before, "Rich Dad, Poor Dad" was a racket.
"A Random Walk" and "The Intelligent Investor" were my first two books that helped guide my own investing strategy. I've since realized that I do not have the time nor intellect to trade individual stocks, let alone options, so I've opted to spend more time reading about tax efficiency/decreasing my tax liability. In your situation, I would spend less than concentrating on increasing the yield of $600/month in short term savings, and exert more of your energies on advancing your career.
For the ~$7200/annum that you are saving, I would first exam your debt situation. If you carry any credit card debt, I would pay it off ASAP. Secondly, as a recent college grad, student loans should be around 6.8%. You still qualify for the interest rate deduction but that still settles at >4.5%. A GUARANTEED 4.5% return is tough to find in this market. If you prefer to maintain the liquidity, and want to open a business in the near future (<3) years, I would not advise taking on more risk. IBonds, with their 10k annual limit, might be a decent option since you live in a high tax state (California). Ibonds are exempt from the state and local income tax, but must be held for a minimum of 1 year before redeeming.Edited by norcaltransplant - 3/25/12 at 7:52am