Help me build long-term savings!
March 20, 2012 6:55 PM Subscribe
I have just been given a substantial raise and promotion. Yay! Now, I want to take most of that extra income and stash it away, for the time being, in some kind of savings vehicle. What kind of savings vehicle is right for me?
I am 27-year-old single male. I don't make a lot of money, but I'm debt-free, I live pretty modestly and I basically want to stash my extra income away and forget about it for awhile. The point of this is to build long-term savings for eventual big expenses: starting a family, getting married, a down payment on a home (possibly), etc. This is not a rainy day fund, or a travel fund - I've already got money for that. It's not a retirement fund, either, at least not now - I already have a 401(k).
Stuff I want in this particular savings vehicle (ideally).
1. I want to be able to deposit a certain amount of money into it every paycheck, without thinking about it. I'd really like to just tell my employer or my bank to route x amount of dollars into this account.
2. However, I want to be able to change that amount at will, anytime - let's say my rent goes up, I want to be able to reduce the contribution. Conversely, if my income goes up, I'd like to be able to raise the contribution.
3. In addition to the regular contribution, I'd also like to be able to make one-off contributions, of any amount, freely.
4. I want to have easy access to this money, just in case I need it. Now, I do not anticipate needing it, and I'm disciplined enough that I would not put it towards any unintended use except in the case of a dire emergency. But, should such an emergency occur, I don't want to be shut off from my own money.
5. Highest possible return with lowest possible risk. Err on the side of low-risk, as I'll be counting on this money in the medium-to-long term (say, five to ten years).
Does such a thing exist? I'm open to some kind of mutual fund, provided it is low-risk, though I'm fairly knowledgeable about the stock market and don't see much upside there. I know I could max out my 401(k), but I really want to be able to access this money well before retirement.
So: how could I best put my money to work, while also conserving it? What savings vehicles are available that would fit my parameters, if any? I'm happy to research things myself, but I just want an idea of what to look at and where to start.
P.S.: When I say I'm not interested in hearing about maxing out my 401(k), I mean that. I know that option exists. Do not suggest it, as it is not useful here.