Where to Put My Money

The 5+% days are no more for high yield saving. All the banks had dropped their interest rates according to the federal rate cut, and more cut could be on the way. As such, it is becoming less apparent as to where to put my money.

On one hand, I want to keep adequate liquidity(cash) in order to save up a down payment in foreseeable future. On the other hand, it’s quite depressing that these money is growing at only sub-3% interest rate. Shall I say screw down payment so I can invest the money? Shall I invest everything and keep renting? Or shall I wait and expect the Fed to raise the rate soon enough, or perhaps with the cash, I may have a chance to purchase a place to call my own?

Now if I say screw down payment, I ponder if I should put some of the saving, if not all, into investment to grow at a faster pace. I have been eye’ing the Vanguard Wellesley Income Fund (VWINX) and Vanguard Wellington Fund (VWELX). Wellesley appears to be a conservative version of Wellington with 60/40 bond vs. stock ratio while Wellington is 40/60 — different fund manager aside. The tough part is that Wellington has a hefty $10,000 minimum, and I don’t want so much money locked up, due to long-term horizon. Also if not it’s a $3,000 minimum instead of $10,000, I may be able to keep enough to still save adequately for a down payment in time. Together with the volatility in the market, that’s why I am leaning toward having Wellesley added to my portfolio, but Wellington’s rate of return does beat Wellesley in the long run. Any one with experience with these two funds?

*SIGH* I feel kind of stuck. I’m still a good distance from a full 20% down for a Bay Area property, and I hate to see money uninvested and losing value to inflation.

Shall I give up buying for a year or two?
Shall I suck up the sub-3% interest rate?
What’s your thought?
What’s everyone doing out there with their money?

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