What would be the best financial decision?

Use an IRA to invest in a mutual fund.

Here’s the nutshell version:

IRA (funds/stocks) has the highest potential return. But it’s also the highest risk – your money may go down.

CD has the next highest potential return, and a guaranteed rate – but your money is locked up. If something happens, you can’t withdraw it early without financial penalties.

Money Market / Savings has the lowest potential return, but is the safest. Your money is insured, and you can withdraw it at any time.

What investment is “right” for you depends entirely on your level of comfort with the associated risk.

As a basic, you should have enough money saved in a readily accessible source (not a CD or IRA) to support yourself for six months to a year in case you lost your job or had a major accident and could not work.

Start there.

You’re young go with the IRA and if you plan to keep investing to where you’re going to have a lot of money at retirement go with the Roth IRA. BTW – do you have a 3–6 month of expenses emergency fund if not do that first. Owe anything on credit pay that off too.

You said you wanted to make an investment other than a retirement plan – an IRA is for retirement, and not a good idea unless you feel reasonably confident that you won’t need to use the money for something else before your 60s.

Other than that, you have to consider what your risk tolerance is and how much liquidity you need. Long term CDs offer higher interest but that doesn’t help if you need the money for an emergency and your CD doesn’t mature for another year.

The first thing you should have is 3–5 mos of current expenses in a current asset account, a saving account or 3 mo CD. Only then do you worry about long term savings. From there you budget how much you are going to save for retirement and purchase savings.

IRAs allow you to invest in the market which over the long term will probably give the best return and give you a current tax benefit, If you put $3000 in an IRA this year and if you are in th 20% tax bracket, you will pay $600 les in taxes this year. The risk at your age is minimal because you are not going to feel any gain or loss for almost 40 years. You’ll withdraw your IRA between 2048 and 2079. If there is a 1987 or 2008 type market drop in 2046, you will ave plenty of time for the rebound. And the $3000 you put in this year will probably be worth $30,000 then.

You should also be accumulating money monthly that will be converted into CD’s. You should shop around for interest rates when you purchase or renew them. The longer the term, usually the better the rate. I have 1 CD that was carrying a rate of 3.1% but upon renewal in August, they only offered 1.5%. Normally I might have taken that money and switched it to another bank but since I will be using it soon I switched it to my savings account so it would be immediately available, The CD savings is life money, down payment on a house, wedding or education expenses, etc.

As you go along you will increase all kinds of savings. You can set goals with the aid of online calculators. Right now it is just important you start with the 3 categories. emergency fund, purpose savings and IRA/retirement.

I suggest and IRA through an insurance company, like State Farm. Safe and the company should be around for a while. The wife has one through State Farm (Not a paid endorsement) and through all of the ups and downs with the stock market and the economy she made money. My 401k through my employer took a hit (loss)...

The following advice should be taken VERY seriously. Mark my word, if you follow through, you will not regret it.

The two keys to any good investment are timing and knowing when up-and-coming demand will generate increased value in a good or service.

Let’s think this through:
Read the text of the national health care bill. Seriously. Don’t read it for any other reason than to discern which sponsors have slipped “candy” into the bill for their pharmaceutical producing and distributing constituents. Candy? Yep—meds. Find out the names of the sponsors of key provisions that have anything to do with the manufacture of antibiotics. Identify the antibiotic manufacturers who are set up to produce generics.

Why antibiotics?

Easy. Statistically speaking, 8 out of 10 times a person visits a doctor, an antibiotic is prescribed. Of course, they are OVER-prescribed…but I digress. With upwards of 40 million new people who will be encouraged by the “Government Option” to go regularly, the chances for the sale of generic antibiotics will increase astronomically.

@davidk sources please for your statistic re: antibiotic prescriptions? I average prescribing antibiotics about once or twice a day, for a rate more like 10–20%.

I suppose that different practitioners serve different clientele. General practitioners and those working at walk-in clinics see more sniffles and sore throats, infected cuts and scrapes, than perhaps you do. How can I prove this? I can’t because no such tracking is done—across the nation. In any event, the totals speak for themselves.
If you work 180 days a year as a nurse practitioner, and see 10 patients per day, and prescribe 1 course of antibiotics/day, that means that you prescribe 180 courses of antibiotics/year. If you represent the average, and there are 812,000 physicians across the US, the total number of antibiotics being prescribed in a year would be 146,160,000.
An increase of 15% in the numbers of courses prescribed, based on the number of newly insured under national health care, is reason enough to invest.

@davidk you could say that about almost any kind of medication, or medical procedure. I’m wondering why you’re so focused on generic antibiotics as the next big thing for investment?

On a quick search, it looks like the most commonly prescribed drugs here in the US are not antibiotics. Here is a list of the top 10 most prescribed drugs in the US in 2005. Most were antidepressants, pain medications, antihypertensives along with lipitor and thyroid replacement. Two antibiotics, ampicillin and amoxicillin were #8 and 10. I could see the use of those other meds increasing more substantially than antibiotics, because those chronic health problems have been untreated for people who don’t have access to health care.

Not that this has much to do with @oneseconregrets and her $500 investment beginning.

You are correct. The increased demand for pain meds, especially in relation to Women, generated by nationalized health care, has already been adequately anticipated by George Soros.

Thanks so much to everyone. I need advice put in front of me in simple ways and you all did that. Emergency funds, then investment. I had a savings account at a smaller bank but I withdrew my money from that once I opened up my checking account with Chase. Should I stick with Chase for a savings account to put away my emergency spending money or does anyone know of a better bank to open up a savings account with? Maybe I’ll make that a Fluther question if I get no responses here, haha.

Interest rates are pretty low right now, both for savings accounts and CDs. Your local banks probably have websites that will tell you about interest rates and other features of their various accounts. It probably makes sense to stick with one bank for both savings and checking for now. Here is information from Chase’s website on savings account options – as you can see, with $500, your best bet for now is a straight savings account to avoid the monthy service fee.

Once you have enough saved to consider a CD where you get a little better interest in exchange for promising to leave your money alone for a specified time, you can use a website like this to see if an online bank will give you a better rate than your local bank. As long as the bank/credit union is FDIC insured, your money is safe.

Easy,save more,spend less.